Hughes Earmarks $1.4B for Data Play

3/21/1999 7:00 PM Eastern

Hughes Electronics Corp. said it will invest $1.4 billion
in a new two-way broadband network using Ka-band satellites positioned in geosynchronous
orbit over North America.

Dubbed "Spaceway," the network will provide
high-speed Internet access at prices competitive with those for cable-modem service,
according to Pradman P. Kaul, corporate senior vice president of Hughes and president and
chief operating officer of its Hughes Network Systems subsidiary. The broadband service
won't be operational until 2002.

Steve Blum, president of Tellus Venture Associates, called
the plans "an important step forward" for Hughes. But he said it's unclear
how big a share of the consumer high-speed-data market will be left for Hughes to grab
once the service launches.

HNS already delivers a high-speed-data service called
"DirecPC" for consumers, telecommuters and small-business owners. DirecPC sends
data at a downlink rate of 24 megabits per second and uses a telephone-return path for the

Adam Grosser, vice president of product development for At
Home Corp., parent of @Home Network, said that while broadband services delivered by
satellite may be great for rural areas, they're suboptimal as general data services.

The new service -- which the company said will be branded
under some variation of the "Direc" brand -- will uplink data back to the
satellite at rates up to 16 mbps, Hughes said last week, and it will provide downlink
speeds of 400 mbps.

In addition to high-speed Internet access for consumers,
telecommuters and small-business owners, Spaceway will offer bandwidth on-demand to
corporate clients for data, videoconferencing, voice and multimedia applications.

HNS will develop the user terminals, which will feature
antennas as small as 26 inches in diameter for consumer use.

The company intends to create an antenna with dual feeds to
receive both Spaceway broadband and DirecTV Inc.'s direct-broadcast satellite
television signals, much in the same way that current "DirecDuo" systems receive
both DirecPC and DirecTV feeds.

Spaceway's North American network will use two
high-power Ka-band satellites -- one at 101 degrees west longitude and the other at 99
degrees west. DirecTV currently provides its DBS service from Ku-band satellites at 101
degrees west.

Hughes plans to create similar broadband networks in Latin
America, Europe, Asia and Africa through partnerships with other communications companies.
The company has spectrum at six other orbital slots that it plans to use for its
international broadband network.

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