DBS Providers Set Two-Way Broadband Plans

4/16/2000 8:00 PM Eastern

Direct-broadcast satellite providers last week announced plans that should help them to compete in the broadband Internet space, as well as further strengthen their relationships with hardware vendors.

EchoStar Communications Corp. said last Monday it would invest $50 million in Gilat-To-Home, a joint venture created to launch a two-way, Ku-band, satellite-based Internet service for consumer use later this year. Microsoft Corp. and Israel-based Gilat Satellite Networks Ltd. were initial investors.

GTH had previously said that it would work with EchoStar to send both its Internet and EchoStar's Dish Network video signals to a single satellite dish. The companies demonstrated the product with a live feed at last week's National Association of Broadcasters convention in Las Vegas.

EchoStar has a similar deal with iSKY Inc., which plans to deliver a two-way broadband service via Ka-band satellites late next year. EchoStar previously announced a $50 million investment in iSKY.

And DirecTV Inc. parent Hughes Electronics Corp. said last week that with the help of America Online Inc., it will aggressively market a new "AOL via DirecPC" broadband service this summer. Today's DirecPC platform requires a telephone-return path, but the company expects to have a two-way connection via Ku-band satellites late this year.

By 2003, Hughes plans to use Ka-band technology for its new "Spaceway" service, which would offer faster connections than DirecPC's Ku-band service.

DirecTV will also introduce a receiver with "AOL TV" capabilities in the second half of this year, president Eddy Hartenstein told analysts during a conference call last Wednesday.

Philips Consumer Electronics Co. said last week that it has agreed to manufacture and sell new DirecTV receivers. The company already markets DBS boxes for Dish. "We desire to be service-provider-agnostic and let the consumer decide," Philips Home Access Solutions senior vice president of marketing and sales Bo Ferm said.

Philips plans to ship its DirecTV retail products-including a high-end model with Dolby Laboratories Inc.'s "AC-3" capabilities-in the third quarter of this year.

Philips will introduce its own AOL TV set-top box late this year, but the first-generation models won't include DirecTV receivers.

The company is eager to manu-facture integrated products that combine DBS, personal-video recorders and Web access, Ferm said, adding, "Consumers will be confused if there are too many remote controls and too many user interfaces to deal with."

Philips plans to build a low-end DirecTV receiver to help speed conversions from Prime-Star by DirecTV medium-power service to high-power.

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