Levies charged to DBS satellite operators, such as USSB and DirecTv, were raised by almost 39% by the Federal Communications Commission in late June.
The FCC's new fee structure will raise the DBS satellite systems cost of operating a satellite from $70,575 last year all the way up to $97,975 by the end of this year. Home satellite provider operated earth stations along with cable companies went up from $370 to $515 while the fees charged to cable operators dropped by one cent to 54 cents per subscriber.
The fees were initiated by the FCC to collect $152.5 million for the Congress to pay debts in the 1997 fiscal year, close to a 21% increase from the 1996 fiscal year.
In order to avoid paying a 25% late penalty, all fees must be paid between September 15th and 19th 1997.
TCI has formed an alliance with Falcon Holding Group and is looking for more partnerships in the future. Lou Hindery, Tele-Communications Inc. President, announced in late June that TCI, the nations largest cable operator, will create more partnership deals like the one made with Falcon Holding Group.
The Falcon alliance consists of TCI systems 300,000 subscribers combining with Falcon's systems in 26 states serving 700,000 subscribers. TCI will hold a minority interest somewhere between 30 and 50 percent in the partnership while Falcon will manage the partnership and consolidate the partnership results for financial reporting purposes. Falcon also will manage some other systems.
TCI systems affected by the Falcon deal are in Oregon, Washington, Missouri, Alabama, and California.
Once more partnerships are made it could have an affect on an estimated 4,000,000 TCI sub-scribers.
U.S. Satellite Broadcasting is promoting the availability of local programming through a DSS system with a print advertising campaign.
Stan E. Hubbard, USSB President, stated in a press conference that his business as well as others are losing potential customers because many find they can't receive local programming with a satellite system. Hubbard is hoping the advertising will change peoples beliefs when it comes to local signal reception and heighten expectations for an off-air antenna being proposed by USSB and DirecTv.
Antennas America has been licensed by DirecTV to use the DSS logo on the new Freedom Antenna , a flat VHF/UHF antenna that fits on the back of existing 18” dishes.
Thomson Consumer Electronics, another member of the DSS partnership, has already introduced a DBS system with an off air antenna.
Two separate versions of a budget rapprochement bill directed at raising $20 billion without any money gained from user fees have been passed by the House and Senate.
A joint effort by the Satellite Industry Association, the Satellite Broadcasting and Communications Association and others representing spectrum users was made to fight the "user fee" proposal. As reported in last months issue of SWN, the "user fees" could have impacted satellite operators who haven't purchased their orbital locations through FCC auctions prior to January 1996.
The House had originally planned on requiring the FCC to set minimum bids equal to 2/3 of predicted earnings set in legislation. Those requirements were eliminated allowing the FCC to locate their own ways of setting minimum bids.
Reed Hundt, FCC Chairman, is looking to amend suggested legis-lation in India that places tough restrictions on foreign broadcasters.
The law, submitted to parliament in May, would force foreign satellite broadcasters such as News Corp.'s Star TV and Time Warner Disney to send their signal from an uplink facility in India while giving up majority control to Indian partners.
Jim Allen is stepping down after 10 years of running the National Cable Television Association's (NCTA) Office of Cable Signal Theft. Allen has taken the position of CEO with Secure Signals, Inc., a firm that specializes in telecommunications security. Allen says that, since most of the large cable companies outsource signal security services, he feels the time is right to move to an independent company. NCTA is aggressively searching for a replacement for Allen.
In late June MCI Commun-ications Corp. stated that they plan to file an application to switch over it's direct-broadcast satellite license to PrimeStar Partners L.P.
MCI has asked the FCC to advance it's review of their $20 billion merger with British Telecommunications, instead of waiting until the DBS transfer application has been filed. MCI has also asked if the FCC could act on the merger prior to the completion of a ruling on DBS foreign ownership issues.
MCI and News Corp.'s joint venture, American Sky Broadcasting Inc., is swapping the use of their DBS license for about 30 percent of non-voting interest in PrimeStar.
A Toronto, Ontario Federal Court has decided that American "gray market" satellite dishes are illegal. Justice Gibson ruled the import and sale of satellite dishes that decode unauthorized television program- ming from the United States is illegal in Canada. The Federal Court ruled in favor of a handful of Canadian broadcasters, including Allarcom Pay Television Ltd., Family Channel and TMN Networks Inc., who have argued the U.S. dishes violate Canadian cultural and broadcasting laws.
Dealers throughout the satellite community were surprised when Justice Frederick Gibson made this ruling in late June.
In order to calm the nerves of some 300,000 consumers who have purchased gray-market dishes at prices near $1,000, many suspect that the Canadian government along with satellite executives and broad- casters will initiate some form of compensation, such as a trade-in for legal satellite equipment once it is available.
Although this ruling was made by the highest court to say the dishes are illegal thus far, it will not bring an end to the "gray-market" issue. One month before this ruling a court of analogous stature in Saskatchewan passed a judgment, which is being appealed by Ottawa, stating that the "gray market" dishes as well as the "black market" pirate cards are legal.
Canadian DTH providers look at this latest ruling as a victory for their side of the industry while those dealing in the gray market are looking for an appeal.
The president of Allarcom Pay Television, one of the filers in this action, says that the transition from gray market to legal should be easy for Canadians with DISH Network equipment, as it is the same hardware to be used by ExpressVu, who will launch service later this year. He stated that those with DSS compatible equipment will have a harder time going legal, and should look to their retailers for support.
There is still a lot of concern in bringing those, who are unhappy with Canadian content rules, into the legal fold. Many black and grey marketeers prefer the U..S. programming available on their present systems, and it would be a hard sell to convince them to switch to a Canadian provider. vIn fact, a group known as CFACT has already filed suit against the Minister of Industry John Manley and the Canadian Radio-television and Telecommun-ications Commission (CRTC) on the basis, among other things, that the government has exceeded its authority.
Licenses have been granted to Constellation Communications and Mobile Communications Holdings by the Federal Communications Com-mission for the construction and launch of satellite systems that will offer such functions as paging, phone and fax.
The FCC's 10 year licenses will grant the two companies permission to begin construction on their multi-billion dollar low earth orbit satellite(LEO) systems.
Constellation's investors include CTA Launch Services, Bell Atlantic and E Systems Inc. Mobile Communications' investors include Westinghouse, Israeli Aircraft Industries and Harris Corp.
Additional LEO licenses will now be made available by the FCC.
AskyB's Gilbert Arizona uplink site, currently under construction, has been purchased by TeleCom- munications Inc.
TCI bought the site as a backup in order to keep site diversity alive. Each TCI facility is said to serve as a back-up for the others, if one facility goes down another one with the same capabilities can immediately take its place to prevent service inter-ruptions.
The former AskyB site was initially to be used to send DBS programming.
A $1.2 million debtor-in-posses-sion financing approval has been granted to Alphastar, but the possible sale of the company to it's suppliers, Hyundai Samsung Electromech-anics is up in the air.
Prior to the decision, the U.S. Bankruptcy Court in Delaware invited creditors from AlphaStar Television Network and Tee-Comm Distribution to confer with officials from the company and ask questions about their operations.
Both companies are protected from creditors demanding restitution and those seeking to terminate or change the terms of existing contracts or agreements. The debtors are also protected from litigation and the start or continuation of foreclosure pro-ceedings against them.
Creditors can be penalized for going against rules set by the U.S. Bankruptcy Court.
AlphaStar is also having problems with Loral, the owner of Telstar 402R medium-power satellite which has carried Alphastar services since 1996. Loral has filed motion looking to make Alphastar accept or reject leases for transponders on board the new Telstar 5 satellite by the first of August. Loral claims that Alphastar plans to refuse repositioning of customers dishes necessary to transmit Telstar 5 signals to 55,000 customers. Loral, who says they haven't received payment from Alphastar in the last 4 months, claims that making Alpha-Star decide on leases would save them millions of dollars in revenue and possibly save the new satellite from losing half of it's economic value.
According to contracts, AlphaStar was to complete the transition to Telstar 5 by the end of July, and Loral has allocated the former Alphastar space to new customers for service beginning 1 August.
Bankrupt AlphaStar sent a notice to retailers stating that it is cancelling the annual subscription service for new customers. New activations will be sold monthly subscriptions only, but customers who already bought annual packages will continue receiving their service.
The monthly packages range in price from $29.99 to $59.99. Dealers also can sell a la carte programming and niche services such as Asian TV, The Egyptian Channels and Hispanic offerings. No coupons may be used for programming purchases, and must be activated directly through AlphaStar's toll-free num-ber. AlphaStar officials wouldn't comment on their move to sell monthly programming.
AlphaStar has notified dealers and subscribers that July 28th is the big day for the switch to T5. AlphaStar services on T4 with terminate at 2:15am on that date and resurface on T5 after 2pm. Sure to be a sore point, it will be the sub-scribers’ responsibility to have their dishes re-aimed to T5.
AlphaStar also stated that it will not guarantee what services will be available or for how long they will remain available after the move.
The June 23rd ECM sent by DirecTv and USSB not only shut down the cards operating on the old data stream, but also appears to have affected receivers with the legitimate second generation cards.
This leads many satellite TV hackers to believe that both the old and new data streams are operating simultaneously, and that the old data stream has not been shut down.
The off-the-air antenna schemes proposed for existing DBS systems may not be need if Microspace' new venture is successful. Microspace, a subsidiary of Capitol Broadcasting, is proposing a Ka band delivered "spot beam" system to provide local broadcast services to DBS households in over 100 major metropolitan areas.
The home system would consist of a 24" dish with dual Ka/Ku LNBs, with local stations delivered by Ka and DBS programming by Ku via present DBS providers.
The venture, in it's planning stage, is busy soliciting bids from vendors and contracts with DBS providers. Negotiations are underway with GE Americom, Hughes and Loral for space at their existing orbital slots for at least 2 satellites. The DBS provider will be selected based on who "offers the best deal".
The new geostationary satellites would have "lots of little antennas" instead of one wide-footprint antenna. Technical details of the construction of the proprietary satel-lites will not be revealed.
The system meets all existing technical FCC rules, but Microspace envisions some difficulty getting modifications to current FCC mandated must-carry rules and certain provisions of the Satellite Home Viewer Act to permit trans-mission of local channels.
Microspace says there would be around 150 uplink sites, with 6 channels per site.