News

Start-Up Petitions FCC on DBS Delivery

3/22/1998 7:00 PM Eastern

A start-up company claiming to have found a way to reuse
direct-broadcast satellite spectrum for terrestrial delivery of local-broadcast signals
has put DBS providers on the spot with a request for Federal Communications Commission
approval of the concept.

Northpoint Technology L.P. claims that it has performed
tests using patented techniques that demonstrate that it can effectively use any portion
of the DBS spectrum to transmit local TV signals and other services to DBS subscribers
from ground-based transmitters.

The company said its technology would not interfere with
satellite reception, and it would require no additional electronic gear in the home, other
than a second, low-cost antenna positioned to receive the terrestrially delivered signal.

The company estimated that the local-broadcast service --
which it proposed would be delivered under existing must-carry rules -- would add about $7
per month to the DBS subscribers' bills.

Last year, Senate Commerce Committee chairman John McCain
(R-Ariz.) wrote a letter to then-commission chairman Reed Hundt urging "fair and
equitable treatment" of the firm's application for an experimental license,
which has since been granted and used in tests by Northpoint on the King Ranch near
Austin, Texas.

"Northpoint Technology is a fully patented system that
allows for the harvesting of at least 500 megahertz of existing spectrum for new
uses," McCain said in his May 12 letter to Hundt. "This enormous bandwidth can
be used for enhanced national security, public safety and medical and education
applications, as well as new local, regional and national services such as television
broadcasting and high-speed Internet services."

Northpoint made it clear that the technology could be used
in other bands, as well, potentially expanding the service capabilities and localism of
many categories of satellite service.

"Our first goal is to help DBS be competitive with
cable by making it possible for the satellite-service providers to deliver local broadcast
and high-speed data to their customers in a way that's completely compatible with
their existing receivers," said Sophia Collier, a principal in Northpoint, who
described herself as a venture capitalist with a background in consumer products.

Northpoint has targeted EchoStar Communications Corp. and
DirecTv Inc. as the most likely supporters of its concept, given the fact that PrimeStar
Partners L.P. has provided for local-broadcast distribution through affiliation with cable
operators.

Neither EchoStar nor DirecTv has taken a stand on the new
technology.

"We sent a letter to the FCC on Northpoint's plan
saying that we're not taking a position on their petition at this point," said
Bob Marsocci, spokesman for DirecTv. "We're really going to examine their
petition carefully."

"We don't feel that it is appropriate to comment
at this time," said a source at EchoStar, who did not want to be identified.

EchoStar has its own local-to-local broadcast plan, and
DirecTv president Eddy Hartenstein outlined his own strategy last week for working with
local stations.

Collier said the bandwidth could be split between DirecTv
and EchoStar, with specific frequency segments devoted to each, operating in the formats
that are compatible with their reception technologies.

Tom Tycz, chief of satellite and radio in the FCC's
International Bureau, said the FCC was "discussing how to proceed" on
Northpoint's petition for a rulemaking that would permit the reuse of the DBS
spectrum at 12.2 gigahertz to 12.7 GHz. The next step, he said, would involve putting the
rules out for comment.

Northpoint's plan conflicts with that of Skybridge
L.P., a satellite concern that has proposed a rulemaking that would allow the delivery of
fixed services from low-earth-orbit satellites over the DBS band. While Skybridge,
operating within internationally established parameters, said its signals would not
interfere with those of DBS-service providers, they would interfere with
Northpoint's, Tycz asserted.

Moreover, he said, Northpoint "would need the support
of the DBS operators" if it is to prevail. "I'd like to get the DBS
people's view on this," he added.

While Northpoint principals have met with DBS providers and
received a positive response, it is too early to comment further on their interest,
Collier said.

Northpoint's plan has one aspect that could attract
the attention of lawmakers: It would subject DBS companies to the must-carry and local
public-interest obligations of the 1992 Cable Act, the company said.

"Northpoint's technology will provide an
extraordinary source of new capacity for DBS providers, enabling them to meet these
congressionally required, publicly beneficial, noncommercial-programming
requirements," Northpoint said in its petition.

The Cable Act requires DBS companies to set aside 4 percent
to 7 percent of their capacity for public-interest service -- an obligation still to be
met. That, plus the must-carry rules, could put a dent in the amount of bandwidth that DBS
providers have for their other services.

Collier said Northpoint, following meetings with officials
at the National Association of Broadcasters, anticipated that industry's support for
its petition. The NAB declined to comment.

Northpoint's tests have shown that because DBS dishes
are uniformly pointed toward satellites positioned over the equator, a terrestrially
transmitted signal coming into "the back" of the dishes over the same frequency
will not interfere with the satellite signal, if the transmission system is properly
designed and positioned.

"We're planning to perform more tests,"
Collier noted.

Northpoint's technology was developed by Carmen and
Saleem Tawil, a married couple who run an engineering firm in Austin.

March