Glitch = Bad

Posted: December 5, 2010 in Uncategorized
Tags: , ,

Glitches are bad.  Very bad.

LightSquared’s SkyTerra 1 has been unable to fully deploy its 22-meter reflecting antenna. The satellite launched 14 November, but

Boeing began deployment of the antenna Nov. 30. A glitch-free unfurling would have taken no more than several hours.

So who loses?  Everyone, especially the insurer.

SkyTerra 1 is insured for about $268 million, a policy for which LightSquared paid a $37.5 million premium. A second, identical satellite, SkyTerra 2, is nearly completed at Boeing and presumably could be launched within a year if needed. It remains to be seen whether insurance underwriters would agree to maintain the company’s 14 percent premium rate or would insist on a sharply higher rate in the event that SkyTerra 1’s antenna fails to fully deploy.

Alternatively, insurers could insist on rewriting the existing policy to exclude the SkyTerra 2 antenna from coverage. The second satellite is also insured for $268 million.

Reflector size has increased steadily in the last 10 years: 5, 9, 12, 18 and with SkyTerra, 22 meters.

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