On the launch pad at Cape Canaveral, Fla., prepped and ready for countdown, is an Atlas V rocket, atop which sits a complex piece of communications hardware. At 4:00 PM ET today, that booster will launch the ICO G-1—and telecom entrepreneur Craig McCaw’s first extraterrestrial venture—into geosynchronous orbit.

After years of regulatory wrangling, planning and re-planning, ICO Global is finally executing its plans to launch a hybrid wireless network using satellite and terrestrial networks. Instead of the voice and broadband network originally planned, though, ICO is pursuing mobile TV, creating a broadcast network that blankets the US with a common digital video signal and using tower-top transmitters to fill in the gaps in dense urban areas. The result will be a mobile TV that ICO can pit directly against Qualcomm’s MediaFLO as well as possible resurgence of Digital Video Broadcast-Handheld (DVB-H) technology in the US that has long been written off for dead.

ICO is actually using a variant of DVB-H called DVB-Satellite services to Handhelds, or DVB-SH. It uses the same S-band 2-GHz spectrum to transmit both from space and on the ground. ICO G-1 will provide the bulk of the coverage, using ground-based beam-forming techniques to bounce a high-powered TV signal off of the satellite. Meanwhile, spot networks in major urban areas will reinforce the signal in urban canyons and hilly terrain where there is no direct line of site to the heavens.

Such a project isn’t cheap. In all, the cost of the satellite (constructed by Space Systems/Loral), the booster rocket (built by Lockheed Martin) and the launch mission itself (handled by United Launch Alliance) is running half a billion dollars, and ICO hasn’t even started building the terrestrial system yet. If all goes according to plan today—“Winds are at 20 knots,” vice president of public relations Christopher Doherty said from Cape Canaveral this morning. “If they stay under 29 knots, we’re pretty good.”—the satellite will be operational this quarter, allowing ICO to start alpha trials in Raleigh-Durham, NC, and Las Vegas this summer. That’s when the terrestrial network planning begins.

Here, ICO gets a bit of an advantage over entirely terrestrial-based networks like MediaFLO’s. To fill in its footprint, ICO estimates it will have to build 1500 to 2000 transmission sites using Alcatel-Lucent gear. The costs of each site will be comparable to that of building a cellular site, but in order to achieve nationwide coverage, ICO must build far fewer of them, Doherty said. “If we were to build a nationwide cellular network, it would take 20,000 to 30,000 sites,” Doherty said. “To give you an example, we think it will only take 14 sites to cover Raleigh-Durham.”

The ICO, like the entire mobile satellite services (MSS) sector, has had a rocky past. Once the darling of Wall Street, operators like Iridium, Motient, Globalstar and ICO all went bankrupt at the turn of the millennium as their plans to offer global satellite voice and data coverage fizzled. McGaw bailed ICO out of bankruptcy in 2000 and became the company’s chairman. The company faced other problems; its first Hughes-built satellite wound up at the bottom of the South Pacific. It successfully launched a medium Earth orbit satellite from Cape Canaveral in 2001, but plans to launch the remaining 9 satellites to complete the global voice and data network went on hold indefinitely.

In 2003, ICO and the satellite providers successfully lobbied the FCC to allow them to use their spectrum for both terrestrial and satellite service, which created a storm of protest from traditional cellular providers, all of whom won their right to offer ground-based voice and data through auctions. Since then the satellite business has enjoyed a revival. While companies like Motient—renamed Terrestar—pursued their original broadband and voice plans, ICO used the opportunity to pursue an entirely new business model: mobile TV.

DVB-SH’s parent standard, DVB-H, at first held promise in the US. The multicast technology had two big backers: Aloha Partners and Crown Castle, both of which planned nationwide networks. After a trial in Las Vegas, Aloha’s planned service Hiwire fizzled, and the company sold itself to AT&T, which plans on using its 700 MHz spectrum for advanced 3G and 4G networks. Crown Castle launched a trial of its Modeo service in New York City but shut down the trial just six months later.

Those failures left Qualcomm as the clear dominant player in mobile TV in the US. The vendor launched a separate venture called MediaFLO USA that used 700 MHz spectrum and Qualcomm’s internally developed Forward Link Only technology to build a terrestrial broadcast network across the US. Even that project has gone slowly, however. Qualcomm has signed on two major cellular operators to carry its TV service, Verizon Wireless and AT&T, but because the 700 MHz band hasn’t been fully cleared by its current broadcaster occupants, MediaFLO has launched only in limited markets, making it difficult for its carrier customers to market it as a nationwide service. The band will be fully cleared in 2009, though, and Qualcomm has picked up more licenses at auction, allowing it to ramp up its rollout plans this year. When ICO’s mobile TV service goes live in 2009, it could be facing a fairly entrenched competitor.

Doherty, however, said ICO plans to go after a different market than Qualcomm. Instead of focusing on wireless handsets, ICO will be pursuing larger stand-alone media players, taking advantage of DVB-SH’s larger screen resolution and 500 kb/s channel capacity. “We don’t want to focus on the small cellular screen, which is really only good for watching a 4-minute clip,” Doherty said.

Specifically ICO will focus on in-vehicle displays offering at first a “set-top box in the trunk” that links into the on-dash or rear-seat displays in cars, SUVs and vans. Not only will it provide 10 to 15 channels of TV, the two-way capabilities of the network will allow it deliver vehicle navigation services as well as emergency two-way calling and messaging. Hughes has already agreed to manufacture devices for the initial deployment, and DiBcom has agreed to supply DVB-SH chipsets. ICO is also partnering with fellow McGaw venture Clearwire to trial a potential hybrid Mobile WiMAX and TV service.

Qualcomm, though, won’t be leaving the in-vehicle market to ICO. Today at the National Association of Broadcasters conference, Qualcomm announced its first live demonstration of MediaFLO piped directly to a car entertainment system.

ICO will stream video from its satellite launch today at 4 PM on its website.