EchoStar has been seeking to team up with a partner with a lot of clout since it first launched the DISH Network back in March of 1996. On Feb. 24, 1997 a $1-billion merger deal was announced between News Corp and EchoStar Communications Corp. to form a DBS alliance operating under the "Sky" brand.
According to reports, News Corp. will contribute $1 billion in cash and other assets from its American Sky Broadcasting (ASkyB) unit in return for 50 percent stake in EchoStar. MCI Communications Corp., News Corp's partner in ASkyB will own a 20 percent share of News Corps' interest in EchoStar, which amounts to about a 10 percent stake in the new "Sky" venture.
Reportedly, when all is said and done, the new alliance hopes to offer more than 500 channels, including local TV stations, and will operate under the "Sky" name. This new service is expected to use 7 satellites and have 2 uplink facilities. In addition, it will have access to full-CONUS orbital slots at 119 degrees where EchoStar presently operates 2 satellites, and at 110 degrees, spectrum which MCI purchased for $682.5 million last year.
EchoStar already controls the rights to frequencies at 6 of the 8 high-power orbital slots, 90 of the nation's 256 high-power DBS transponders. By merging with ASkyB, which owns 28 more transponders, the joint venture would have 118 transponders in all, and would control 2 of the 3 orbital slots that cover the entire US (conus), including 50 of the 96 full-conus transponders.
According to Preston Padden, newly appointed president of the worldwide satellite operations at News Corp., that with an approximate average of digital compression rate of 10:1 they could turn those 50 transponders into 500 channels. The new service will be able to utilize all seven of its birds for national, local and high-speed data service, including ASkyB's "spot-beam" satellite. Padden said the company plans to beam local broadcast stations to 50% of the U.S. homes by year's end and 75% by the end of 1998.
News Corp. head Rupert Murdoch wasted no time in trying to obtain federal approval for this new satellite venture when he visited policy-makers recently to sell the proposed Sky service. Murdoch met with Sen. John McCain, R-Ariz., chair of the Senate Commerce Committee to talk about the venture. According to reports, McCain said he was briefed on the deal by Murdoch who laid out details of the proposal and asked McCain for nothing.
ne regulatory obstacle could be giving the venture control over two full-CONUS direct-broadcast licenses. The Federal Communications Commission has previously limited other direct-broadcast providers to one national license.
Cable TV interests also are expected to ask the FCC to block the venture, arguing foreign ownership rules would be violated through Australia-based News Corp.'s investment or through its relationship with MCI, holder of one of the DBS licenses. They also are expected to fight Sky's proposed delivery of local TV stations.
Consolidation in the DTH satellite business may become a wave of the future. Similar to the deal between EchoStar and News Corp.'s American Sky Broadcasting, Star Choice and HomeStar, the proposed DTH service from Calgary-based Shaw Communications, will merge satellite television operations, an alliance both say will become a strong Canadian competitor.
The combined operations have an approximate value of $110 million. HomeStar will contribute up to $55 million in cash, satellite space and uplink facilities to Star Choice so that, upon completion of the transaction, Shaw will own approximately 50 percent of the common shares of Star Choice Communications.
As a result of this arrangement, Star Choice has changed their stragety of using EchoStar's system and support. Reportedly Star Choice has decided to go with DigiCipher II digital compression technology and the 4DTV unit from General Instruments. Star Choice will have access to 14 transponders on Canada's Anik E-2 satellite, enabling the company to offer a DTH satellite television service with over 100 video and audio channels to subscribers' 24-inch satellite receiver dishes.
Star Choice will retain its existing arrangements with dealers and distributors and intends to maintain an aggressive roll-out schedule providing DTH satellite television service to consumers by April 30, 1997.
Finally, after three delays, the Tempo high-power satellite, was successfully launched in orbit on 3/8/97 and will occupy the 118.8 West orbital slot. Tempo was built under the direction of TCI Satellite Entertainment, and will provide direct-to-home television service throughout the continental US, Alaska, Hawaii and Puerto Rico. The satellite was built by Space Systems/Loral, and launched aboard a Lockheed Martin Atlas IIA rocket from Cape Canaveral Air Station.
Tempo will have an expected life of over 12 years, carrying 32 high-powered Ku-band transponders at 115 watts each, which in combined mode provide 16 transponders at 230 watts each. TEMPO is the first commercial satellite to have power capacity in excess of 10 kilowatts.
Once in-orbit testing is complete the satellite will be turned over to TSAT for signal delivery and will be controlled by GE American Communications for long-term operation.
TSAT's satellite will support the company's satellite TV/Cable Plus model. Cable Plus will combine selected digital programming offered by some DBS services like pay-per-view, premium channels and sports with analog cable. The equipment will consist of a 13.8-inch dish, a set-top box with dual capabilities and one remote control. TSAT's "Cable Plus" service is expected to be available by fall of this year.
Mexico's preparation to auction off its DBS slots is drawing interest from U.S. satellite companies looking to expand transponder capacity. EchoStar, Hughes Electronics, Lockheed Martin, Loral and GE Americom, are expected to partner with Mexican companies to buy orbital locations that can provide coverage of North America. The Mexican government also is expected to sell off satellite assets such as Morelos and Solidaridad in its effort to privatize the systems. The auction and sale are expected to generate close to $1 billion for Mexico.
Mexican partners will control at least 51 percent of any venture even though U.S. companies probably will end up paying for most of the auctioned licenses. Under an agreement finalized between both countries last year, a holder of a Mexican license could freely broadcast into the U.S. market. Mexico has 64 transponders in its spectrum.
The National Association of Broadcasters (NAB) and three DBS companies have tentatively agreed to end their dispute over the broadcast of network programming to satellite subscribers, according to recent reports.
Though the preliminary effort only covers national network feeds, an agreement could produce an deal allowing DBS companies to offer local network broadcast signals.
The DBS companies involved include Netlink, a unit of Tele-Communications Inc., PrimeStar Partners and EchoStar Communications. EchoStar/News Corp.'s satellite service dubbed Sky, want to deliver local stations covering 75 percent of the country by the end of 1998.
DirecTv and PrimeTime 24 were not included in the agreement, both are facing white area lawsuits in Florida, Texas and North Carolina for broadcasting national network feeds to ineligible customers.
Under the tentative agreement, satellite companies agreed to cancel access to national network signals to customers receiving them illegally under white area rules.
In other news, the SBCA announced that it will be one of their top priorities to clarify the regulations pertaining to retransmission of signals to a broadcast station's targeted area. The SBCA believes retransmission to local viewers is possible as long as the broadcaster agrees. It is possible that DBS services that transmit a local signal may have to pay a copyright fee for each subscriber who receives a local signal. The SCBA hopes to resolve this issue by May or June.
On March 15, NASA Television began broadcasting via GE-2, Trans. 9C at 85 degrees West longitude, vertical polarization, with a frequency of 3880 Mhz, and audio of 6.8
Mhz. The GE-2 satellite, which was launched in January and is operated by GE Americom, will provide NASA TV with a larger footprint. NTV was previously transmitted on the Spacenet 2 satellite, which is nearing the end of its life cycle.
Dave Charles, DTH satellite veteran has been appointed president and CEO of AlphaStar Television Network according to an announcement by Al Bahnman, Tee-Comm chairman and CEO. Charles will be replacing Murray Klippenstein, who moved to Stamford, Conn., a year ago to launch Tee-Comm Electronics' DTH satellite service in the United States.
According to the company, Klippenstein was invited to assist with the roll out of its Canadian service, which received regulatory approval on Feb. 27.
"Mr. Klippenstein has been instrumental in establishing AlphaStar in the American marketplace," the company said in a statement.
Charles has a vast background in the industry and brings an extensive network of contacts to his new position. The company is confident that he will be able to accelerate its objective of building a larger U.S. subscriber base.
Charles, 41, founded Satellite Receivers Inc. in 1981. The company's business is in wholesale and retail sales, leasing and consumer financing. After taking charge at AlphaStar, Charles transferred management of Satellite Receivers to two colleagues.
Adaptec recently unveiled a digital satellite receiver card that can deliver Echostar DISH Network programming and services directly to a personal computer or PC-capable television set. The Adaptec card is available to original equipment manufacturers at a sample unit price of $395.
The receiver card can connect PC and PC/TV users to high-resolution digital video, broadcast web sites, business data services and emerging interactive media. According to the company, PC customers will be able to receive satellite services with a direct coax connection between the satellite dish and the computer, thus eliminating a set-top box.