AT&T; Working to Regain Link With Satellite

With a multimillion-dollar deal hanging in the balance, AT&T; Corp. is struggling to regain its link with a satellite that is part of a communications business AT&T; has earmarked to be sold to Loral Space & Communications Ltd. this month for $712.5 million.

Telstar 401, which relays signals for a number of TV networks, including ABC, Fox and PBS, went down Saturday morning. No network was forced off the air by the outage that continued through Tuesday.

But AT&T; said that if it can’t reestablish contact with the satellite soon, customers who use the satellites for data transfer and video conferencing may soon be without a link until another Telstar satellite is launched in four months.

“We have to make sure that our customers are getting what they pay for, but it’s been hard to [make alternative arrangements] on the KU-band of the satellite which is used for data communications and video conferencing,� said Mike Granieri, an AT&T; spokesman.

Technical snafus are common in the booming satellite business. But this setback could prove significant for Loral, which in late September agreed to buy AT&T;’s Skynet Satellite Services. The service includes Telstar 401 and 401R, as well as a third Telstar satellite that has not yet been launched.

Loral spokeswoman Jeanette Clonan called it “premature for us to speculate yet on what impact it will have on the transaction.� Granieri echoed her sentiment.

Robert Kaimowitz, a satellite industry analyst at Unterberg Harris, an investment banking firm, said that if Telstar 401 is not restored to operation, the loss would be a rare but not necessarily catastrophic event. That’s because satellites are typically insured for in-flight loss.

Loral Space, the company left over when Lockheed Martin Corp. bought Loral Corp.’s defense businesses, is involved in a host of satellite ventures.