FCC circulating Globalstar change; stock surges

A petition from Globalstar to the Federal Communications Commission that would allow the Covington-based satellite phone company to offer wireless Internet service is being circulated for consideration among FCC commissioners.

The news sent Globalstar shares up 19 cents, or 28 percent, to close at 85 cents Monday in heavier-than-normal trading.

No timetable is set for an FCC ruling on opening up Globalstar’s spectrum in American cities. But news of the FCC action caused the Covington company’s stock to shoot up Monday because it represents a potential $2 billion windfall.

Technology and communications companies are looking to improve Wi-Fi service.

“We hope the commissioners review our item and vote to release it expeditiously,” said L. Barbee Ponder, Globalstar’s general counsel and vice president of regulatory affairs.

Mignon Clyburn, the acting chairwoman of the FCC, is circulating a draft of the new rules among commissioners Ajit Pai and Jessica Rosenworcel.

If commissioners vote in favor of a rule change, then formal proceedings would start to open up the additional spectrum, including allowing public comments.

Tim Farrar, a principal with Telecom, Media and Finance Associates, a consulting and research firm, in Menlo Park, Calif., said under the most optimistic timetable, the FCC would issue a final rule on Globalstar’s Wi-Fi service by spring or summer.

Monday’s FCC announcement “is definitely a big step forward for their prospects of being able to take advantage of their spectrum on terrestrial networks,” Farrar said. “But it’s still an early stage.”

The FCC may hold off making a decision on the rule change until Tom Wheeler, who has been nominated by President Barack Obama to serve as chairman, is sworn in. Wheeler has been approved by the Commerce Committee, but the nomination hasn’t been approved by the full Senate.

“He may have some input to give about this,” Farrar said.

By tapping the spectrum set aside for Globalstar in areas where satellite phone service isn’t needed — such as major U.S. cities and airports — the company has said it could increase Wi-Fi capacity in the U.S. by one-third immediately.

Globalstar has had discussions with “numerous” technology, wireless and cable companies about the spectrum, Ponder said.

He would not discuss any specific companies Globalstar has spoken to, although last month Bloomberg reported that Amazon tested a new wireless service on a spectrum owned by Globalstar.

Ponder said once the FCC issues a ruling, that would cause conversations between Globalstar and outside firms to speed up.

“Everyone understands how dependent consumers now are on Wi-Fi,” Ponder said. “If you can provide a better Wi-Fi experience, a segment of the marketplace will respond favorably.”

Despite the potential rule change, Globalstar is committed to being a mobile satellite service company, Ponder said.

The company has more than 550,000 subscribers and the numbers continue to grow.