EchoStar Rebuts Expert's Claims
By Ted Hearn -- Multichannel News, 2/8/2002 4:39:00 AM MT
EchoStar Communications Corp. is denying claims by a satellite-technology expert that the company could easily serve every local TV market without having to acquire additional spectrum.
A key reason why EchoStar is seeking to merge with DirecTV Inc. is to free up spectrum to expand local TV service from about 40 markets currently to some 100 markets. The merger would release spectrum that would no longer be used by both companies to provide the same TV stations in the same markets.
In a Feb. 5 letter to the House Judiciary Committee, EchoStar chairman and CEO Charlie Ergen said the technology does not exist today to allow EchoStar on its own to provide all local TV stations in every market in a commercially feasible manner.
Ergen said that if a satellite could serve every market today, he 'would have every reason to build it.' Such a 'super satellite,' he added, is possible only in theory and 'with enough time and money, almost anything is possible on paper.'
Ergen was addressing a May 2001 study prepared by Roger J. Rusch, president of TelAstra Inc., a management-consulting firm in Palos Verdes, Calif.
Rusch, a satellite-design expert since 1965, was retained by the Department of Justice during EchoStar's legal challenge to a 1999 law that required direct-broadcast satellite carriers to carry all local TV signals in markets where they provide any local TV signals effective Jan. 1, 2002.
In his report, Rusch said he was asked to determine whether a DBS system could be built 'using currently available technology' that would allow the carriage of all eligible local TV stations -- 1,475 in all -- in every market.
'I have concluded,' Rusch said, 'that such a system is not only possible, but also could be operated using only 12 DBS frequencies, which is less than the number currently utilized by DirecTV and EchoStar for local television broadcasts.'
Each DBS satellite capable of transmitting service to the lower 48 states has 32 frequencies. If EchoStar and DirecTV merge, the combined company would control all of the frequencies available -- 96 -- that cover the continental United States.
In his response, Ergen told Congress the Rusch report failed to take into account several 'real-world' factors.
He said EchoStar would have to build a satellite with technology that does not exist, provide on-board computing power that has never been deployed and outfit the satellite with a 'supersize antenna' that would represent a significant advance in design and deployment.
He added that he wasn't even sure such a high-risk satellite could be insured.
The Rusch report, Ergen added, also failed to take into account other cost considerations, such as the construction of six new facilities to uplink TV-station signals. He said those facilities could equal or exceed the cost of the satellite.
'Even if implemented . Rusch's proposal would not eliminate the current wasteful duplication of spectrum use, thus denying substantial benefits to consumers,' Ergen said in a three-page response.
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