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Satellite TV Fights Regulatory Fee Changes & Martin Nominated for Another Term at Portals & AT&T Delivers Subs for DISH & In Defense of the Little Guy - Targeting Net Neutrality -- Posted by soullezz
on Tuesday, April 25 2006
Satellite TV Fights Regulatory Fee Changes
The nation's top two satellite TV companies are fighting attempts made recently by cable interests that they say could increase regulatory fees DBS services pay to the federal government.
At issue is a proposal made at the Federal Communications Commission by the National Cable and Telecommunications Association that would remove DBS from the regulatory fee category governing geostationary satellite operators and create a new DBS-only category. The new category would impose regulatory fees on the same basis as regulatory fees are assessed to cable operators.
In joint comments on the proposal, DirecTV and EchoStar said the NCTA proposal would amount to an increase in regulatory fees.
"If the cable industry believes its regulatory fees are too high, it should by all means propose whatever adjustments to those fees it deems appropriate," the companies said in their filing. "It should not, however, continue to offer suggestions on how to fix its rivals' regulatory fees - especially where, as here, the suggestion lacks any legal or policy basis."
The companies ask the FCC to reject the cable industry proposal.
Martin Nominated for Another Term at Portals
On Wednesday, the White House re-nominated Kevin Martin, chair of the Federal Communications Commission, for another term at the Portals.
The re-appointment request would keep Martin at the FCC for another five-year term. Martin's current term expires July 1, and a new term would keep him at the commission through 2011.
The nomination was forwarded to the Senate.
At the moment, there are four commissioners at the FCC. Martin and Republican Deborah Taylor Tate work alongside Democrats Michael Copps and Jonathan Adelstein.
In a statement, Martin thanked President Bush "for the privilege to continue to serve in his administration." He added, "This is an exciting time of growth and innovation in the communications sector. I look forward to working with the administration, Congress, my fellow commissioners and the talented staff at the FCC to provide all Americans with the services and opportunities offered by the best communications system in the world today."
AT&T Delivers Subs for DISH
AT&T, which changed its name to the well-known telecom brand from SBC Communications late last year, continues to add subscribers for its bundle containing video services from EchoStar's DISH Network, though the growth is coming in at a slower pace.
The telecom giant said it added 34,000 DISH Network customers to its package of services during the first quarter, taking its video total to 491,000. The additions compare to 71,000 video additions for AT&T in first quarter 2005, and in that period the company had 394,000 video customers.
AT&T said first quarter net income was $1.4 billion, compared to $885 million in the year-earlier first quarter. Revenues totaled $15.8 billion, up 54.5 percent from $10.2 billion reported in the first quarter of 2005.
In Defense of the Little Guy - Targeting Net Neutrality
By Kyle D. Dixon, Progress & Freedom Foundation
Much of the hubbub over "network neutrality" mandates - which would make broadband networks connect all content and applications developers to consumers on an equal basis - has focused on well-established cable modem and DSL services. Those who hope to regulate the Internet in this manner inhabit some bizarre parallel universe in which information technology stands still, leaving today's leading broadband providers forever entrenched. Preoccupation with these big guys, however, has yielded one-size-fits-all proposals that are also bad for emerging offerings, such as high-speed Internet access over satellite.
In sweeping fashion, content and applications companies pushing for neutrality mandates assert that network owners are "dominant" in the market for fast, "last-mile" connections to homes. Thus they argue regulators should impose on broadband some of the same onerous obligations that they historically have reserved for monopoly local telephone companies. Proponents warn that, without such rules, networks will block consumers' access to content and applications or will create slow and fast lanes that favor the networks' offerings or those of their allies.
Luckily, the truth is much more interesting. Even the largest broadband providers live in fear that their leads in signing up customers will be erased by competitors using new business models or technology. This fear has encouraged many to call network neutrality a solution in search of a problem; broadband providers need to keep subscribers happy if they are to produce a healthy return on broadband network investment. And so these providers do voluntarily what neutrality mandates would prescribe, though unfortunately with less room for networks to negotiate mutually beneficial agreements with other Internet companies.
But even if one believes that cable modem and DSL providers are wielding power capriciously in the broadband market, the argument for regulation falls apart when it comes to satellite companies and other, relatively small broadband providers. With the exception of Sen. Jim DeMint's proposed Digital Age Communications Act (DACA), most legislative and other proposals would impose neutrality obligations across the board, without regard to whether a particular broadband provider has any chance of influencing the market in ways that might harm consumers. Despite satellite companies' national footprint, for example, their high-speed offerings have been picked up by less than 1 percent of broadband subscribers. An even smaller percentage of subscribers use other technologies such as wireless and broadband over power lines.
These players can't afford to do anything but provide consumers what they want, most importantly new options in broadband service. Yet neutrality proponents want to saddle them with the same burdensome and restrictive rules to which they would subject cable modem and DSL providers. This compounds the indirect injury that neutrality mandates would inflict on satellite providers by raising the costs of their DSL partners as both compete with cable companies' "triple play" of video, data and voice service. Even worse, by discouraging smaller providers from expanding broadband competition, neutrality mandates transform proponents' claims that regulators cannot rely on market forces into a self-fulfilling prophecy.
The solution to proposed network neutrality "solutions" is to recognize that one size does not fit all. If regulators must impose network neutrality requirements, they should limit them to the only situations in which broadband providers can harm consumers: where these companies obtain and abuse market power. DeMint's bill (S. 2113) essentially would do that, as would a similar plan (also referred to as "DACA") proposed by the Progress & Freedom Foundation in partnership with legal, economic and engineering scholars from around the country. Short of foregoing regulation entirely, these targeted approaches offer the best way to silence pleas for network neutrality mandates, before adoption of less enlightened proposals stamp out the diversity and dynamism that characterize the broadband Internet.
Kyle Dixon is Senior Fellow and Director of the Federal Institute for Regulatory Law & Economics, The Progress & Freedom Foundation. Mr. Dixon previously served as Special Counsel to former FCC Chairman Michael Powell, focusing on broadband policy.
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DISH Network Restores OLN & NAB's Rehr Attacks Satellite Radio & SES Works On Broadcast Mobile TV Trial -- Posted by soullezz
on Monday, April 24 2006
DISH Network Restores OLN
EchoStar and OLN on late Monday announced a multi-year agreement that restores the sports channel to DISH Network customers.
OLN, which will be soon branded as Versus, returns to channel 151 in America's Top 180, DishHD Gold or any higher programming package. The network was turned on in time for Monday's NHL Stanley Cup playoff double-header involving the New York Rangers and New Jersey Devils and the Colorado Avalanche and Dallas Stars.
"It was important that we negotiated a fair contract, enabling DISH Network to remain a tremendous value for our customers," said Eric Sahl, senior vice president of programming at EchoStar. "We look forward to a long relationship with OLN in which we can provide the network to our customers."
NAB's Rehr Attacks Satellite Radio
David Rehr of the National Association of Broadcasters had a lot of things to say during his opening address before the organization's annual gig in Las Vegas. He talked retransmission consent, educating the public about the digital TV transition and broadcasters embracing new technology.
But Rehr also on Monday had harsh words to say for competing platforms. And satellite radio dominated early portions of his attacks.
Said the NAB's top guy, "Satellite radio has supposedly 10 million subscribers total. But 260 million people listened to broadcast radio last week alone."
Rehr also pointed to the losses incurred by satellite radio. "Its (satellite radio) business model is bankrupt. And this is even before our own digital HD radio has kicked in," he said.
If broadcasters are going to win the fight against satellite radio, they will need to keep a local focus, Rehr said.
"Our localism, our connection to the community, is also an advantage … an irreplaceable advantage," he said. "Helping the community is obviously a social good. Helping the community is also broadcasting's business plan and, frankly, it is our brand. We must continue to be evangelical about our community service and about our community content."
SES Works On Broadcast Mobile TV Trial
SES Americom is eyeing the mobile video potential.
The satellite operator said it's working with Hiwire, a subsidiary of Aloha Partners, to deliver a digital video broadcast-handheld (DVB-H) mobile TV and entertainment trial to consumers in Las Vegas. The trial is expected to launch this fall.
The service will leverage Hiwire's 12 MHz capacity of UHF spectrum and wireless knowledge with SES Americom's satellite and distribution platforms, programmer relationships and experience in IPTV delivery.
Hiwire's mobile TV programming will originate from SES Americom's IP-Prime IPTV Broadcast Center in New Jersey, where content will be aggregated, processed and prepared in MPEG-4 format for distribution. The reformatted DVB-H content will then be delivered via SES' satellite-based distribution network to Hiwire's broadcast distribution towers, where the local channel lineup will be tailored and distributed over Hiwire's terrestrial 700 MHz spectrum.
Hiwire's deployment in Las Vegas will feature a variety of broadcast networks, video content, music and interactive data services delivered to consumers' hand-held devices and cell phones utilizing Hiwire's 700 MHz spectrum.
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Paxson Gets More Time on DirecTV Deal & MSOs on Adelphia: Clusters Work & Tech Deals: Comtech Gets DirecTV & IPTV - The Death of Cable and Satellite? -- Posted by soullezz
on Tuesday, April 18 2006
Paxson Gets More Time on DirecTV Deal
Paxson, the broadcaster that's been working out issues DirecTV has with its programming, said it gained another extension with the satellite TV giant that will keep its content on the DBS service.
The sides now have until April 21 to work out their differences.
DirecTV told Paxson early in the year that its programming violates content restrictions contained in an affiliation agreement between the companies.
The satellite TV company has given Paxson notice purporting to terminate the affiliation agreement.
Also, in January, DirecTV filed a legal complaint against Paxson seeking a declaratory ruling that it has the right to terminate the affiliation agreement and cease distribution of the broadcaster's network programming.
The extension until April 21 will give the companies additional time to negotiate a settlement, Paxson said in a Securities and Exchange Commission filing.
MSOs on Adelphia: Clusters Work
As they wait for Federal Communications Commission approval for their joint takeover of Adelphia, Comcast and Time Warner Cable continue to defend the transaction, especially from attacks coming from competitors.
In a letter sent to the Portals Tuesday, Comcast and Time Warner Cable said their takeover of Adelphia would give customers of the bankrupt cable company better service and the latest technology. They said Adelphia operations will be "integrated into existing Comcast or Time Warner regional operations that have already shown their leadership in the deployment of advanced services."
The MSO giants also said their Adelphia takeover will bring significant local programming and local community service benefits to Adelphia markets. In addition, the transaction will enable Comcast to redeem its interest in Time Warner Cable, as required by the FCC when it approved the Comcast-AT&T Broadband transaction, the companies said in their letter.
In March, DirecTV took aim at the Adelphia transaction, including the move to cluster operations with nearby Time Warner or Comcast systems.
Comcast and Time Warner Cable criticized the DirecTV analysis of the MSO clusters, saying in their FCC letter that the study "raises more questions than it answers."
Tech Deals: Comtech Gets DirecTV
Comtech said its Comtech EF Data subsidiary signed a volume purchase agreement with DirecTV for the purchase of DVB-S2 Broadcast Satellite Modulators and Redundancy Switches, a deal the company valued at $3.5 million.
DirecTV will deploy the Comtech equipment to power its HDTV uplink services. The modulators will be delivered to the satellite TV company during a two-year timeframe.
"The bandwidth efficiencies offered by the DVB-S2-based Modulators will enable the cost effective delivery of the most technologically advanced form of digital television, HDTV," said Fred Kornberg, president and CEO of Comtech.
IPTV - The Death of Cable and Satellite?
By Armand Musey, Near Earth LLC
There has been plenty of discussion about IP telephony and how it portends to inflict massive damage to the telcos, but there has been less discussion about the impact of IPTV on the cable and satellite providers. I don't mean to say that IPTV has been kept a secret - it has been a major feature at all of the video trade shows in the past year - but rather that the discussion has largely been limited to the technology and cost of rollout. There has been much less focus on the potential implications to the rest of the industry.
New Competition to a Saturated Market
The U.S. video market, I have been arguing for several years, is largely saturated. Over 90 percent of the 107 million US households subscribe to either satellite or cable; after allowing for piracy, the number actually receiving services is over 95 percent by most estimates. In their attempts to continue growing, cable and satellite are running right into each other. As a result, we see increasing subscriber acquisition costs, higher churn and only moderately higher ARPU. This has not been lost on the market; despite steady appreciation in the stock market during the past three years there has been no corresponding increase in the valuation of the satellite and cable stocks.
Add to this the facts that 1) Telcos are now entering the video market, largely using a form of IPTV (we hear Sprint, ATT and Verizon have advanced plans for rollout), as well as 2) IP video providers such as www.dave.tv and iTunes and 3) IP over satellite systems (Auroras, IP Prime, and SkyWay Connect), are gearing up to allow some of the rural cable operators to upgrade their service levels and serve rural telcos, and it seems like the market is poised to get even more competitive.
Who Wins? Who Loses?
The biggest beneficiary is likely to be the U.S. consumer, who should expect to see the financial leverage move to them. Look for more variety and lower prices. This may help force a la carte pricing and subsidization of PVR devices, among other items.
The other winners are companies that can use this technology to significantly upgrade their offerings. The most obvious is the non-upgraded cable systems, generally in rural areas with 350mhz or 450mhz plant. These systems are generally offering a small number of analog channels, losing customers to satellite and many are just counting the days until they shut down. To the extent they can upgrade to an MPEG-4 IPTV feed and replace their set-top boxes (when they even have set-top boxes), they can offer a channel lineup much closer to what their brethren in urban areas with 750mhz or 850mhz plants for a fraction of the cost of a conventional upgrade and offer cable modems and IP telephony. This should allow them to increase their rates and reduce churn. It could breath new life into many of these systems, much of it at the expense of satellite providers.
Another winner is the telcos. Ironically, by offering IP television, they may offset some of the losses they are taking from the rollout of IP telephony and increasing pressure from wireless. The telcos with the greatest upside are likely to be the rural ones where there is weaker cable competition, though as we just mentioned this advantage is likely to be fleeting. In the metro areas they will be going head to head with fully upgraded cable.
The losers are likely to be the major cable operators and the satellite companies. These companies, already battling a war with each other, now face the prospect of new entrants due to technology that will provide little benefit to them. Moreover, as the telcos start to offer their own video service, they will likely to become more reluctant to market DBS, depriving the DBS operators of a valuable marketing channel.
How Much Will it Hurt?
The traditional logic is that the pain will be manageable - that the installed subscriber base will stick for a long time. But the rapid move to IP telephony, especially given the unevenness of the service in the early days, is causing some to rethink that notion.
In any case, while few are expecting IP television to grow to more than 10 million households over the next seven years, this is virtually 100 percent of the expected household growth expected during this period, leaving zero net subscriber growth for the other multchannel providers! Moreover, it will also force these providers to improve service quality and the overall "value proposition" to keep the rest. This could be equally as painful as a cessation of subscriber growth. But in any case, it is not likely to be a death march for the major satellite and video operators, just a long hard slog for the next several years.
J. Armand Musey, CFA is a partner and president of Near Earth LLC (http://www.nearearthllc.com) , a boutique investment bank focused on the satellite, media and telecom sectors. Musey is frequent speaker and an often quoted expert on satellite industry issues.
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TiVo Wins Jury Decision in Lawsuit Against DISH & Sirius Scores Kia Deal & XM Makes Key Money Move -- Posted by soullezz
on Thursday, April 13 2006
TiVo Wins Jury Decision in Lawsuit Against DISH
Late Thursday, the jury handling the patent infringement case TiVo filed against EchoStar handed the DVR pioneer a victory.
Specifically, the jury found that TiVo's time warping patent is valid and that EchoStar was infringing on TiVo's intellectual property. The trial took place in U.S. District Court, Eastern District in Texas.
In a statement, TiVo said it's "particularly gratified that the jury found that EchoStar willfully infringed on our patent and the consequences their actions had on our overall business. This decision recognizes that our intellectual property is valuable and will ensure that moving forward EchoStar and any others that want to use our patented technology will be required to provide us with compensation."
TiVo said it intends to seek a permanent injunction against EchoStar's DVR products.
In a separate statement, EchoStar said, "This is the first step in a very long process and we are confident we will ultimately prevail. Among other things, we believe the patent - as interpreted in this case - is overly broad given he technology in existence when TiVo filed its patent."
EchoStar said it believes the decision ultimately will be reversed either through post-trial motions or on appeal. "Additionally, the Patent Office is in the process of re-examining TiVo's patent, having determined there is a substantial question concerning the validity of the patent," EchoStar said.
EchoStar added that it looks forward to a trial of its DVR patent case against TiVo in February 2007.
The satellite TV company also stressed that DISH Network subscribers can continue to use their receivers in their homes, including DVRs. Furthermore, TiVo dropped their claim that EchoStar's DISHplayer 7200 DVR infringes their patent, the company said.
Sirius Scores Kia Deal
Automaker Kia said it will exclusively offer Sirius as factory standard equipment in all of its vehicles.
The long-term agreement runs through 2014, with an optional three-year extension to 2017. Through the deal, Sirius will become a standard feature in all 2009 model year Kia vehicles, beginning in 2008.
As part of the deal, Kia customers will receive three months of complimentary service, and all radios will be factory activated for dealer and customer convenience, the companies said
"Sirius offers a unique combination of on-air talent, creative programming and various sports and entertainment properties that fit perfectly with Kia's evolving brand characteristics," said Len Hunt, executive vice president and COO of Kia Motors America. "Our next generation products have delivered Kia to new segments and new consumers, and the addition of Sirius will strengthen the company's ability to offer high-quality vehicles with modern features and amenities at an incredible value for the consumer."
XM Makes Key Money Move
XM Satellite Radio on Thursday said it intends to replace higher interest rate debt with new lower interest rate debt and establish a revolving credit facility with a group of banks and other financial institutions.
The company said the transactions are expected to lower its ongoing interest expense and extend the maturity dates of its debt portfolio, as well as provide lower cost standby liquidity through the bank revolver.
XM has launched a cash tender offer and consent solicitation for any and all of its 14-percent Senior Secured Discount Notes due 2009, 12-percent Senior Secured Notes due 2010 and Senior Secured Floating Rate Notes due 2009. The purpose of the offer is to acquire all outstanding old notes and eliminate substantially all of the restrictive covenants in the indentures relating to the debt, XM said in a statement.
In connection with the offer, XM said it expects to complete a private placement in which it issues unsecured floating rate and fixed rate senior notes in an amount expected to be sufficient to repurchase the old debt.
XM also said it has received or expects to receive commitments from a group of banks and financial institutions, and anticipates establishing a secured revolving credit facility to provide $230 million of incremental liquidity following the closing of the refinancing transactions.
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HDNet takes Wraps Off NASA Deal & The Future of Sat Video: Going Mobile & DirecTV Praises Senators' Letter on Adelphia Deal -- Posted by soullezz
on Thursday, April 6 2006
HDNet takes Wraps Off NASA Deal
The last day of the Space Symposium, taking place in Colorado Springs, contained a surprise for attendees: Mark Cuban of HDNet.
At the conference, the chairman and president of the programmer, known for its HDNet and HDNet Movies channels, and NASA Administrator Michael Griffin took the wraps off a deal that will allow the high-def network carry live broadcast of Space Shuttle launches.
Specifically, HDNet said Thursday it will deliver the remaining shuttle launches and landings at Kennedy Space Center in Florida in HD format. Shuttle launches are set to end in 2010. Coverage is set to begin with the next shuttle launch in July.
HDNet also will provide the agency with a standard broadcast signal of launches for use by media. And, whenever possible, HDNet will air in high-def coverage of NASA's expendable rocket launches.
Said Cuban, "Every shuttle launch is a unique and historic American experience. For the next four years, the place to watch this full live broadcast experience in high-definition will be on HDNet."
Despite the successes so far for HDNet, Cuban told SkyREPORT there are no plans to expand into additional channels. Cuban said the company he founded is very busy with the two networks it already delivers to high-def fans.
The Future of Sat Video: Going Mobile
It wasn't your typical commercial satellite crowd, given the military presence (and the presence of demonstrators outside protesting the industrial/military complex). But that didn't stop leaders in the mobile satellite crowd from talking about the future of the developing business at Thursday's opening session of the Space Symposium.
Christopher Baugh of Northern Sky Research told the audience present at the event in Colorado that mobile satellite is poised for significant growth, and video on-the-go is expected to be the big winner for the mobile satellite business.
While satellite supporting video delivered to small hand-held devices could become a common thing in future years, panelists also stressed that mobile satellite services will be a critical part of emergency response and homeland security.
Carson Agnew of Mobile Satellite Ventures said "a lot of our users will be first responders." He pointed out that after an earthquake hits or hurricane comes ashore terrestrial communications infrastructure might be out of service. After a disaster, "satellite phones will work," Agnew said.
Mobile Satellite Ventures is developing a network that would use terrestrial communications and mobile satellite technology to deliver communications.
Other panelists included Eugene Jilg of Inmarsat, which is pushing ahead with its global BGAN effort, and Richard VanderMeulen of ViaSat, known for its work with Connexion by Boeing.
DirecTV Praises Senators' Letter on Adelphia Deal
DirecTV released a statement Thursday that praised a letter, written by Sens. Ted Stevens (R-Alaska) and Byron Dorgan (D-N.D.) that suggested certain conditions should be attached to the Adelphia takeover by Comcast and Time Warner Cable.
DirecTV said the letter recognizes "the potential negative impact of the proposed Comcast/Time Warner acquisition of Adelphia Cable on fair competition in the marketplace."
Said Susan Eid, vice president of government affairs at DirecTV, "Chairman Stevens, Sens. Dorgan and Daniel Inouye recognize that regional sports is must-have programming, and by denying their competitors access to regional sports networks, cable monopolies are depriving fans of the right to root for their home team."
DirecTV has complained at the Federal Communications Commission that the Adelphia takeover could give Comcast and Time Warner Cable some incentive to withhold regional sports programming they control from competing pay-TV services.
as seen on skyreport
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