PrimeStar Partners L.P. said last week that it has signed
up its 2 millionth subscriber, and that it expects its new subscribers for February to
number more than 40,000, after acquiring just under 16,000 new subscribers in January.
First-quarter marketing promotions, including
high-visibility TV ads during the Super Bowl and the Winter Olympic Games, likely
contributed to PrimeStar's higher February numbers.
PrimeStar appears to have regained some of the momentum
lost from uncertainty surrounding its plans to roll up the partnership into a single
entity. PrimeStar said a few weeks ago that it will roll up the company later this month
as a private subsidiary of TCI Satellite Entertainment Inc. (TSAT). Eventually, the two
companies will merge into one publicly traded company. Executives will move from the Bala
Cynwyd, Pa., headquarters to new PrimeStar Inc. offices in Denver. Those employees who do
not make the move will stay at Bala Cynwyd until May 1, a company spokeswoman said.
The company hopes to migrate its service to high-power
direct-broadcast satellite, which would allow PrimeStar to market an 18-inch-dish system
that competes more directly against DirecTv Inc. and EchoStar Communications Corp. Both
the Federal Communications Commission and the Department of Justice have been reviewing
whether PrimeStar should gain access to high-power DBS spectrum controlled by News Corp.
and MCI Communications Corp.
Last week, Larry Irving, assistant secretary of commerce,
told reporters that competition in the video marketplace is something that the
administration is concerned about. The Department of Commerce will watch the PrimeStar
matter closely, said a spokeswoman, and it will file comments with the FCC at the
Jimmy Schaeffler, chairman of The Carmel Group, a DBS
consultancy, said Irving has a substantial amount of clout in the eyes of the FCC.
But Schaeffler predicted that in the end, the government
won't tell PrimeStar that it can't move to high-power. "They'll say,
'You can do this, but with conditions,'" he added.
"The government should stay out of telling companies
which businesses they should get into," said Mickey Alpert, president of Washington,
D.C.-based Alpert & Associates. "Having said that, the companies [involved in
PrimeStar] should not be allowed to use their monopoly powers to impede competition."
Alpert said the consumer is better off having three DBS
services to choose from than two.