Risks Soar, The Rockets Don’t

Today’s rocket failures and capital flight may subside in time for other projects now being planned. Teledesic, a 288-satellite “Internet in the sky” backed by cell-phone pioneer Craig O. McCaw and Microsoft Corp.’s William H. Gates III, has already raised $1 billion from Motorola Inc., Boeing Co., and other sources to help with its 2003 launch. “Our investors have a long-term perspective,” says a spokesman. But higher launch and insurance costs are throwing Teledesic’s $9 billion budget into doubt. “A more reasonable figure is $15 billion, but they’re not willing to say that yet for fear of scaring off Wall Street,” says Marco Caceres of researcher Teal Group. Teledesic plans eventually to go public.