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Two weeks ago the European Commission awarded bandwidth to two companies to deliver S-band mobile data satellite services (MSS) across the EU. But does the EU actually have the legal authority to make trans-national spectrum awards? And what will happen to the company that is already operating a satellite service in the S-band spectrum?

The winners, UK-based Inmarsat and Ireland-based Solaris Mobile, gain 30MHz of S-band spectrum for 18 years. They must launch services, such as phone and mobile TV offerings, within two years.

In a release announcing the awards, EU Telecoms Commissioner Viviane Reding proclaimed:

"Mobile satellite services have huge potential: they can enable Europeans to access new communication services, particularly in rural and less populated regions. I therefore welcome that we have now cleared the way for the swift launch of these pan-European services.

"This was possible thanks to the first pan-European selection procedure... A Europe-wide market for mobile satellite services is now becoming a reality. I call on the Member States to take without any delay all the required follow up steps in order to allow a timely and proper launch of mobile satellite services."

But there is a spanner in the works, namely the two losers in the Commission's MSS beauty parade, which are separately fighting the EU decision in the courts. ICO Global Communications, the US satellite operator, argues that only the International Telecommunications Union (ITU) has the authority to allocate and manage spectrum and orbit resources on an international basis.

And yesterday TerreStar Europe, the other loser, said it was applying to the Court of First Instance in Luxembourg to seek the annulment of the decision on procedural grounds.

According to Terrestar, the Commission's decision "excluded TerreStar Europe on a technicality at a preliminary stage of the selection procedure. The action argues that the Commission misread TerreStar Europe's submission, finding an inconsistency where none existed. In addition, the Commission failed to investigate the supposed inconsistency - and notably failed to review the clarifications voluntarily submitted by TerreStar Europe, which fully explained the issue".

It thinks a court can rule on the issue promptly, without interfering with the Commission's goals for services launches within two years.

ICO's argument is more interesting, and it has even more at stake than Terrestar.

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