LOOKING TO THE SKIES\Businessman fights for right to use satellite.

Byline: Dawn Yoshitake Daily News Staff Writer

Gary Noreen wants his place in space.

Noreen, chairman and chief executive of La Canada-based Radio Satellite Corp., is developing a souped-up car radio to provide precision navigation, digital audio broadcasting and two-way communication services via satellite.

"This will be the ultimate car radio," Noreen said.

Imagine driving down the freeway with the RadioSat system, about twice the size of a car stereo, embedded in the dashboard. Below the display screen are six buttons - each tied to a category of services customers can buy individually or as a package.

Hit the information button and the display screen shows icons such as travel, stocks, shopping centers, weather and road advisories. Touch the stocks icon and receive a list of stocks, the closing price and market movement, while the travel icon's hotel category will list several nearby inns, their room rates and a map indicating the proximity to the car's location.

The audio button offers up broadcast formats such as music, news, sports and talk. But rather than the radio tuning into a station that predominantly carries such a format, RadioSat will draw the audio from several stations.

Another button features a map and navigational assistance. Although a number

of new cars already offer that feature, Noreen said his radio system will also include real-time traffic conditions. A button to notify emergency services will also be available.

Noreen's RadioSat also lets drivers talk to the outside world via satellite telephone, exchange voice mail, receive faxes or allow a person with the right equipment to track the location of the car.

The RadioSat system and its special antenna are expected to cost $500 or less, Noreen said. A monthly base fee of $5 will cover broadcast services, and the cost will rise depending on added services.

Radio Satellite launched a Web page to "test drive" the system (http://www.radiosat.come/radiosat/) and received approval on its second patent in October. A third patent is pending.

"Consumers will likely buy the radio for its audio channels, but once it's in the car they'll see the other buttons and want to sign up for additional services such as two-way communications," Noreen said.

But Noreen's privately held company is missing one crucial element: a satellite.

For the past seven years, he has been fighting for space on the only one available that could handle his service. But American Mobile Satellite Corp., a consortium which operates the lone commercial geostationary satellite over the United States, has dragged its feet, Noreen said.

In his most recent effort to resolve his dilemma, Noreen last month contacted the Department of Justice, alleging AMSC is violating antitrust laws. He's hoping that recent sweeping reform to the Telecommunications Act that opened up competition among telephone and cable companies will give momentum to his efforts.

AMSC - owned by a consortium of companies like heavy-hitters AT&T Wireless Services Inc., General Motors Corp.'s Hughes Communications Inc. and Mtel Corp. - holds the sole license to operate a geostationary satellite system in the U.S.

"My company . . . has been trying to introduce an innovative consumer service into this industry for many years. We have been blocked by a monopoly established by the FCC in 1988," Noreen wrote to the Justice Department. "We would like the Justice Department to encourage the FCC to revoke the license of AMSC to launch two additional satellites and auction off the orbital slots these satellites would use to a competing satellite operator."

But AMSC officials contend no antitrust issues exist.

"There is absolutely no merit to any antitrust claims," said Brian Pemberton, AMSC president. "We have many competitors, and it's not a monopolistic situation. There are many companies that are licensed to offer (low-orbit satellite systems and land-based systems)."

AMSC's satellite provides a constant beam to cover North America as it follows the Earth's rotation at the same pace.

Although several companies last month received licenses to operate low-orbiting satellites and offer service to customers in the United States and around the world, the technology will not be compatible with RadioSat, Noreen said.

Low-orbiting satellites move across the Earth at a faster rate than its rotations, creating moving bandwidth beams that can make it difficult to broadcast information under RadioSat, he said. Noreen also noted low-orbiting satellites do not carry a frequency band compatible with the global positioning system. The GPS-frequency band, which is need to perform precise navigation such as tracking the location of a car, is found between AMSC's frequency bands. This allows RadioSat to use one car receiver and antenna, rather than two under a low-orbiting system.

Regulators had few comments concerning alleged antitrust violations by AMSC.

"We received a complaint recently, and we'll evaluate any additional information given to us," said Gina Talamona, a Justice Department spokeswoman.

James Olson, chief of the FCC's competition division, said the Justice Department can file a notice with the FCC, just like any other third party.

Noreen, who formerly was an AMSC director and whose former company was a member of the consortium, had sought to use one-seventh of AMSC's satellite capacity.

"I wrote a proposal to AMSC, but they never responded with a formal agreement for satellite capacity," Noreen said. "I made continual requests for several years."

He noted he heard several reasons for the delay, ranging from some of AMSC's major shareholders and consortium participants wanting to offer services that would compete with RadioSat, to the belief that Noreen's car radio system would demand too much satellite capacity.

"When the FCC made them a consortium, they said AMSC had to act like a common carrier," Noreen said. "They're suppose to be like the telephone company and provide service to all who make a reasonable request."

The FCC did not have enough spectrum to satisfy the requirements of the 12 companies that initially filed an application, so the FCC decided to license one entity and basically forced the formation of the consortium, an FCC official said.

Noreen, frustrated with AMSC, resigned from the board in late 1991. Several months later in 1992, Noreen filed a lawsuit in the U.S. District Court for the District of Columbia, alleging violation of the 1934 Communications Act and antitrust Sherman Act. The case is awaiting a decision on AMSC's summary judgment request to dismiss the lawsuit, said John Haven Chapman, an attorney representing Radio Satellite.

"This case is in active litigation, so it's inappropriate for me to comment on Mr. Noreen's claims," Pemberton said. "I will say we are in the business to make money and want to provide access to anyone we can, as called for in the FCC's guidelines. It's our goal to service all customers with high quality and in an equal way."

AMSC's satellite has 2,000 channels, but company officials declined comment on the percentage of capacity that is in use or reserved. The company expects to launch the second of three satellites within the next three years.

Under AMSC's FCC tariff requirements, the company will make reasonable efforts to provide customers with sufficient bandwidth to support their needs.

"What this says in a vague way is (AMSC) will do the best they can to support customers' requests, but they can't make any promises," said an FCC official. "It seems to me that this brings to mind a first-come, first-served system."

Satellite industry sources said it may take years before Noreen knows if he will prevail in his fight or see any ripple effects.

"Challenging a license is not a speedy process, and providing satellite service and products is not a speedy process. Other ventures are under way that will compete for parts of the business that Noreen wants to do," said James Gifford, editor of Satellite Communications, a Kansas-based magazine.

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PHOTO

Photo (1--color) Gary Noreen of Radio Satellite Corp. is fighting the government and a consortium for space on a satellite band. (2--color) RadioSat would feature broadcast, navigation, travel and emergency services at the touch of a button. Andy Holzman/Special to the Daily News