A legal battle that could play a key role in the future of wireless phone pioneer Craig McCaw's dream to provide video and other services...
LOS ANGELES — A legal battle that could play a key role in the future of wireless phone pioneer Craig McCaw’s dream to provide video and other services to mobile users around the globe is in the hands of a Los Angeles jury.
The dispute pits McCaw and ICO Global Telecommunications against Boeing and stems from a decade-old plan to launch a network of satellites that would transmit services such as TV programming, navigation and roadside assistance to earthbound users.
The venture stalled, and ICO seeks more than $2 billion in damages from its ex-contractor.
After 2 ½ months of testimony before Los Angeles County Superior Court Judge Emilie H. Elias, attorneys for ICO and Boeing wrapped up their final arguments Friday. The jury was expected to begin deliberations Monday.
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A courtroom victory would provide a significant boost for Virginia-based ICO, which was revived from bankruptcy eight years ago by an investor group led by McCaw.
The battle dates to the company’s origins in the 1990s, when ICO contracted with Hughes Electronics to build and launch a dozen satellites that would form the basis of its globe-girdling network.
Only two of the satellites were finished. One of those was lost when the rocket carrying it into space exploded. The second made it into orbit but is of little use without the other 10, which sit almost completed in a Los Angeles-area warehouse.
Boeing inherited the problem when it bought Hughes’ satellite business in 2000 and, say ICO attorneys, made matters worse by demanding ICO pay an additional $400 million to finish the job it had hired Hughes to perform.
Moreover, ICO contends, Boeing itself had gotten into the satellite-based communications business and now viewed its customer as a rival.
The outcome could be crucial for ICO. Although this year the company got a working satellite in orbit over North America — using Loral Space & Communications — it has no revenue and reported a net loss of $60 million for the first six months of 2008.
With a satellite in orbit, ICO said it expects to begin beaming TV programming to cars and other mobile locations sometime next year.
It faces a growing pack of rivals, although analysts have noted ICO’s satellite may enable it to cover more territory and reach more customers than its ground-bound rivals.
In an interview last week, McCaw said the company’s survival wasn’t at stake in the Boeing case. However, he said he considered a ruling in ICO’s favor important to international expansion plans, which depend on getting the 10 warehoused satellites completed and aloft.