Northpoint Technology Ltd. filed applications with the
Federal Communications Commission earlier this month for licenses to deliver its
"Broadwave" wireless-digital-video and data services in 69 U.S. markets as early
as the first quarter of 2000.
Northpoint proposed using the 12.2- to 12.7-gigahertz
spectrum -- which is already used by direct-broadcast satellite providers -- as a
terrestrial means of delivering local TV stations and other multichannel-video programming
to individual markets.
The FCC is already reviewing the shared-spectrum technology
to determine whether it could cause interference to DBS signals.
Sophia Collier, president of Northpoint, said the company
has completed its first phase of testing in Austin, Texas, adding that early concerns over
signal interference seemed to be fading. Collier plans to sell local signals on a
wholesale basis to DBS providers, which would then bundle them with their national
But DBS analysts were skeptical when asked whether DBS
companies would back the technology.
Timing is one reason: EchoStar Communications Corp. now has
the capacity to deliver local channels on its own, "and they intend to use it,"
said consultant Mickey Alpert, president of Washington, D.C.-based Alpert &
Recent consolidation in the DBS industry has hurt the
chances of Northpoint and other companies that have proposed the wholesaling of local
signals -- including Raleigh, N.C.-based Local TV on Satellite -- because there are likely
to be fewer DBS companies to pitch once the services are operational.
And concerns about signal interference are not easy to
"If there's even one subscriber in DirecTV
Inc.'s universe who experiences interference with this technology, DirecTV will try
to stop it," predicted Jimmy Schaeffler, chairman and CEO of The Carmel Group.
Schaeffler said DBS would likely receive government support
if there were any question of signal interference.
"You don't need Northpoint to create effective
competition" to cable, Schaeffler added, "but you do need DBS."
Conceptually, the shared-spectrum idea has merit, some
analysts agreed. But in practice, it's not likely to work without the support of
partners in DBS and local broadcasting.
Steve Blum, president of California-based Tellus Venture
Associates, questioned why local stations would embrace terrestrial delivery of their
signals when they're already spending millions of dollars on towers of their own to
broadcast new digital channels.
Broadwave subscribers would need line-of-sight antennae to
receive the terrestrial signals, as well as compatible set-top boxes.
Collier said the company intends to use an open standard,
DVB (Digital Video Broadcast), for the set-top box. It's the same format that
EchoStar uses in its Dish Network hardware.
Because it also uses the same spectrum bandwidth, it's
possible that DBS hardware could accommodate the Broadwave signals. But because each DBS
company has its own conditional-access system, Northpoint could not access those boxes
without the consent of a DBS provider.
Collier said that given FCC approval, Northpoint plans to
go ahead with its Broadwave service, with or without any DBS partnerships. Broadwave will
offer an alternative to local cable monopolies, she said, with a basic 96-channel video
package selling in some markets for about $17.95 per month, or $39 with Internet access.
Local affiliates -- largely women and minorities -- will
help to launch the Broadwave service in different markets, setting their own prices and
channel lineups. Collier expects the service to cost under $1 billion to launch
Northpoint plans to sell the hardware for prices similar to
those of DBS hardware through consumer-electronics chains.
Ted Hearn contributed to this story.