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French Firm Disputes DBS, Northpoint

The French parent of an American wireless company is telling federal
regulators that both the direct-broadcast satellite industry and Northpoint
Technology Ltd. are making false claims about the potential sharing of DBS

Northpoint is seeking from the Federal Communications Commission free
licenses to utilize DBS spectrum to launch a nationwide terrestrial service
offering TV stations, cable networks and high-speed Internet access. The company
claimed that its DBS spectrum-sharing technology is unique and has been shown to
work without harming DBS signals.

The DBS industry, led by DirecTV Inc. and EchoStar Communications Corp.,
claimed that Northpoint's entry would cause harmful interference ruinous to DBS'
competitive threat to cable.

Other companies are demanding that if the FCC decides to grant licenses, it
should conduct an auction, rather than giving the valuable resource to
Northpoint for nothing.

MDS America, the American arm of Tallyers, France-based MDS International
S.A.RI, told the FCC in an April 5 pleading that both sides are wrong.

The company said it has been operating the same service proposed by
Northpoint in Oman, Kazakhstan and New Zealand, sharing DBS frequencies without
causing any harm to satellite providers.

'None of these installations has had interference problems with satellite
services,' MDS America said. '[We] have demonstrated this through real-world
operations systems, not through an abstract paper war.'

MDS America said Northpoint should not be given free spectrum based on claims
that its technology has no substitute.

'Northpoint does not have uniquely a technology that allows noninterfering
terrestrial use of the [DBS] band,' MDS America said. 'When this is understood,
Northpoint's entire case for special treatment evaporates without a trace.'

Late last year, the FCC said it was technically possible for Northpoint to
share DBS spectrum, but the agency added that it needed to adopt various service
rules and decide whether to conduct an auction. Meanwhile, Congress ordered the
FCC to hire an independent firm to test Northpoint's technology for

MDS America said it sold its first terrestrial system to the U.S. government
in 1996 to provide video services to U.S. armed forces stationed in Oman on the
Arabian Peninsula. The three-transmitter service was expanded to include radio
and high-speed Internet access.

'When established, there was existing C-band satellite service in the area
with which MDS International's satellite system coexisted without any problem,'
MDS America said. In Auckland, New Zealand, MDS International operators a system
within the DBS band, again without interfering with three overlapping DBS
satellites, the company added.