The concept started back in 1988 when a group of eight companies, which included Hughes Aircraft Co., McCaw Communications Inc., and Mobile Telecommunications Technologies Inc., went to the FCC for a license for satellite broadcastings of data for telephones, fax, and other similar types of information. However, the FCC ruled that they would only allow one license of such broadcasting to be permitted, forcing the eight companies to form a single venture, to be named American Mobile Satellite Corporation (AMSC). Two years later, Hughes Aircraft Co. built a satellite costing over $100 million, to be launched by the mid-1990s, while in the meantime renting out information space on other satellites for data transmission services. However it was in June of 1992 when a sect called American Mobile Radio Corporation was formed to create a satellite radio service and went public on the NASDAQ stock exchange in December of 1993.
Their first satellite was launched in 1995, from which the company offered a satellite phone at $2,000 per year satellite phone, which serviced anywhere in the United States. This was also coincidentally the era when the cellular phone service industry was beginning to explode, thus decreasing the value of the ever expensive service offered by AMSC. In only a year, it was announced that bankruptcy was near, and they received a $225 million credit line from Hughes Aircraft Co, along with a few others in order to bail themselves out. At this point the overall management team and business plan went under reconstruction, including the hiring of a new CEO, Gary Parson. After one year of getting on a new track, AMSC spent $98.9 million to buy an FCC license allowing them to broadcast digital radio signals by means of satellite. At this time, this wa ...