DBS EXECS MULL HDTV PLANS; CONSUMER UPGRADES NEEDED

Author:
Updated:
Original:

New York -- Direct-broadcast satellite providers may
deliver high-definition television as early as the end of this year, but the signals won't
reach current DBS systems.

DirecTv Inc. president Eddy Hartenstein said last week that
the company's first two full-time HDTV channels would be launched from its new Galaxy
III-R satellite.

"Whether it becomes profitable enough for us to do
that at 101 [degrees west] remains to be seen," he added.

Until then, current DirecTv subscribers would need a new,
slightly larger dish to receive signals from both Galaxy III-R and from the company's main
satellites at the 101 orbital location.

Also required would be new receiving equipment that
integrates signals from both orbital locations. Thomson Consumer Electronics plans to
build the upgraded Digital Satellite System technology directly into its first digital
televisions and HDTV set-top boxes. According to Hartenstein, DirecTv is in discussions
with three other manufacturers to build similar devices.

"As soon as sets are commercially available, we'll
have two channels of high-definition programming," Hartenstein said during a SkyForum
conference here last Wednesday.

He said the channels will air full-time, and they will be
devoted to pay-per-view movies.

DirecTv is also in discussions "with virtually all of
our programmers" about their plans for HDTV, Hartenstein said, adding that most of
them have not finalized such plans.

HDTV signals require the bandwidth of four or more
standard-definition feeds, which will force DBS companies to make some hard choices as
programmers decide that they want to launch high-definition feeds.

"That bandwidth doesn't come free," Hartenstein
said, although he would not go as far as to say that he would require fees from
programmers to lease capacity for new feeds.

"Talking-head shows don't make a lot of sense for
high-definition," Hartenstein added.

Movies, of course, do make sense in HDTV, and premium-movie
market-leader Home Box Office has already expressed plans to be an early HDTV supporter.
DirecTv can't commit to carrying HBO's first HDTV feeds because it does not carry HBO. Its
neighbor on the DSS platform, U.S. Satellite Broadcasting, does.

When asked how soon the company would offer an HBO HDTV
feed, USSB president and CEO Stanley E. Hubbard would not commit.

"That's a decision that would ultimately be made
sometime in the future," Hubbard said. "We're not saying that we're not going to
do it."

Hubbard dismissed the possibility that HBO might separate
its HDTV feeds from its other multiplex package and sell those to DirecTv.

Because USSB has just a fraction of the channel capacity
that most DBS companies do, devoting even one channel to a bandwidth-hungry HDTV feed is
not a casual decision. Hubbard pointed to the greater number of channels as the primary
reason why consumers switch to DBS.

"Once you've committed that bandwidth" to HDTV,
Hubbard said, "you've probably committed it for 50 years or better."

Not all DBS companies face such tight constraints. EchoStar
Communications Corp. is likely to use its temporary operating authority for additional
spectrum at its secondary 61.5-degrees-west DBS orbital location to test HDTV, said
chairman and CEO Charlie Ergen. Other possible uses for the temporary spectrum are
educational testing, data testing and PPV movies.

The temporary access won't be used to launch local-to-local
services in additional markets. Because the spectrum use is only temporary, Ergen said,
"you can't give something that you might take away later."

Ergen said EchoStar would support HBO's decision to launch
an HDTV feed.

"We could do HDTV tomorrow, and we don't care what the
format is," Ergen said, adding that 720p (progressive-scan format) is the most
bandwidth-efficient. "We're not going to pick the standard," he added.

DirecTv has already held public HDTV demonstrations using
the 1080i (interlace) format, but it is not precluding other formats, according to
Hartenstein.

Current Dish Network equipment from EchoStar is not
HDTV-capable.

Related