Bill And Craig's Big Idea

IN THE WORLD OF THE START-UPS, THERE are ideas, big ideas and Big Ideas. On that scale, Bill Gates and Craig McCaw have a BIG IDEA. Last week they announced plans to launch 840 small communications satellites, nearly triple the amount circling the Earth today, so that virtually everyone will be able to send and receive video and sophisticated data. Their opening: the year 2001, not as far away as it sounds, especially considering the magnitude of the Gates/McCaw venture. And they want other people-customers, manufacturers, even government agencies-to finance the scheme. If anyone else had come up with such a plan, it would probably be laughed off the drawing board. But as James Moore of GeoPartners Research Inc., a Cambridge, Mass., telecommunications consulting firm, points out: "People become billionaires by taking unreasonable ideas and making them work. These are two people with a track record."

Gates, 38 (net worth: $6 billion), created Microsoft, the world's largest software maker. McCaw, 44 (net worth $1 billion), founded McCaw Cellular Communications, the cellular phone giant. Each owns about 30 percent of the new company, Teledesic Corp., based in Kirkland, Wash. (Their partners include McCaw Cellular and a Los Angeles venture capitalist.) They say that Teledesic's satellites will be the access road to the Information Highway in rural and undeveloped areas of the world not served by fiber-optic delivery systems. They envision a day when, for example, highly trained specialists at Massachusetts General Hospital in Boston could advise doctors at a field hospital in the middle of Africa after receiving images transmitted by satellite.

Gates and McCaw have each invested $5 million mere pocket change to these guys. Their first hurdle will be to raise the rest of the money they need, an estimated $9 billion. It could be a hard sell if anyone asks tough questions. "It's not technologically feasible," says Burt Edelson, a satellite-communications expert at George Washington University. No one has ever tried to build so many satellites in such a short time, Edelson says, and launching them on schedule is an awesome undertaking. Satellite-industry sources say that 20 percent of all satellites launched never make it into orbit. And by the time Teledesic successfully launches number 840, it'll probably have to start all over again because the type of satellite it is using typically lasts only about six years. "They will be replacing a lot of satellites very often," says Moore.

Maintaining such a vast orbiting system is equally daunting. The satellites will be circling the Earth along 21 different paths designed to give coverage to 95 percent of the planet-at an altitude of 435 miles. "You need the fingers of a safecracker to keep these things in place," says Howard Anderson, managing director of the Yankee Group, technology analysts in Boston.

Russell Daggatt, Teledesic's president, says he's not intimidated by these obstacles. Building 840 satellites on time? No problem. Daggatt says the company plans to use assembly-line techniques similar to car manufacturers'. Launching? Again, no problem. He claims the schedule is realistic and based on existing launch systems. There may be even better systems by the time the satellites are ready to go, Daggatt says. And he's not worried about synchronizing the movements of all those birds in space; Teledesic will rely on the millions of dollars' worth of government-funded research for the Star Wars satellite defense plan (which has never been tested in real skies either).

Beyond the technical difficulties, the project faces political roadblocks, such as getting regulatory approval in this country and around the world. Last week Teledesic submitted its plans to the Federal Communications Commission; that leaves only about 100 other countries to go. Gates and McCaw may have influence and clout, but they also have at least a half dozen commercial competitors, some of whom have reached deals with international communications agencies. The most advanced is Motorola, which has already raised $800 million for a 66-satellite communications system called Iridium. Iridium's target date is 1998 and, so far, executives say, it's ahead of schedule. The two plans differ in their goals. Daggatt says Teledesic's customers will be institutions such as hospitals, government agencies and universities. Iridium's goal is to provide cellular phone service around the world, most likely to traveling executives in industrialized countries.

Teledesic officials may be starting from behind, but they're way ahead in confidence. They compare the naysayers to the myopics who predicted a decade ago that personal computers could never replace huge mainframes. In that technological revolution, one of the few who foresaw the future was a nerdy-looking guy from Seattle. His name: Bill Gates.

Teledesic's system would send 840 satellites 435 miles in the sky. They would orbit along 21 different paths, covering 95 percent of the earth, and potentially linking computer users everywhere in the world.

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