Northrop Grumman drops commercial satellite plans

Northrop Grumman Corp., the third- largest U.S. defense company, told the Federal Communications Commission it's dropping plans for a commercial-satellite system because of "the current economic climate."

The company has returned licenses received from the FCC on Feb. 24 for a satellite system that would have offered "true fiber-class broadband service at speeds in excess of 100 megabits per second to every country on Earth," Los Angeles- based Northrop said in a letter filed with the FCC yesterday. The company has a facility in Rolling Meadows.

Northrop for almost 12 years pursued FCC approval of the seven-satellite system, which would have been the first commercial use of new V-band technology that offers faster speeds than current Ka-band systems. Northrop said in the filing it would be "imprudent" to implement an advanced satellite system "while financial and investment markets remain closed."

"The biggest enemy of broadband satellite-based Internet access has been cable," said Marco Caceres, a satellite market analyst for Teal Group in Fairfax, Virginia. "That provides as much speed as most people probably need. To compete against cable, which is probably cheaper, this is just not the right time."

Northrop spokesman Dan McClain confirmed the letter to the FCC and said he could provide no additional information.

"The industry as a whole will soon cross the threshold of opportunity that V-band spectrum represents for satellite-system capacity," Northrop said in the letter. "There is no doubt that commercial V-band systems and technology are now practicable."

Northrop, which had $33.9 billion in sales last year, fell 71 cents to $45.02 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have lost 42 percent in the past year.