United Satellite Communications, Inc. (USCI)

Back in the day, they were the talk of the industry... for a few months.

Don't remember what happened to the service. Just kinda disappeared!

They only lasted about 1.5 years, and just suddenly pulled the plug on everything. Left their subs all holding the bag, with no recourse, and static on the screens. It's claimed they had 10,000 subs. Their MONTHLY uplink fee was $600,000.00! and they filed bankruptcy.

Well, let's see if your still around and still interested in the history of USCI. I'll start to fill in the gaps and if you do read this and to want to know more, I'm probably the best person, with the exception of maybe Lloyd Covens, that can answer virtually all the questions.

USCI started as a JV between General Instrument, Prudential (yes the life insurance company), Francisco Galessi, a real estate mogul (I think that's the correct spelling-it's been awhile) - and as I remember RCA. They launched initially in Indianapolis to "test the market." Housed in NYC, the CEO was Nathanial Kwitt (again I think that's close to the spelling. I've all the news articles stashed somewhere and can, and will, get all the accurate information if there's still interest. Anyhow, USCI quickly outgrew Indianapolis and moved into the NYC and Philadelphia markets. I owned a satellite company in suburban Philly at the time called Galaxy Broadcast Services (GBS). We had successfully developed a FSS, C-band system aimed at G1 and were in the due diligence part of our funding process. The most amazing thing I'd ever seen was USCI providing service, in the clear, with absolutely no way to collect the monthly fees. GI had finalized the Videocipher platform but not incorporated it in USCI. They "sold" systems faster than they could get them installed but once installed there wasn't a revenue stream to support continuation of the service.

So, how do I know all of this? Well, we knew of the problems and that USCI was unable to make their loan payments because we were also working with GI to find an encryption for our DTH service. When things really got bad, we set up a JV with Warner-Amex to do a leveraged buyout of USCI. At that time Warner-Amex owned TMC, Showtime and a couple of other services. USCI was, as earlier mentioned, a five channel, no brand service, so we knew we would have premium channels from the start.

Want to know more? Let me know. I'm Blair Gilbert - blair@blairgilbert.com

Blair Gilbert said:

Well, let's see if your still around and still interested in the history of USCI. I'll start to fill in the gaps and if you do read this and to want to know more, I'm probably the best person, with the exception of maybe Lloyd Covens, that can answer virtually all the questions.

USCI started as a JV between General Instrument, Prudential (yes the life insurance company), Francisco Galessi, a real estate mogul (I think that's the correct spelling-it's been awhile) - and as I remember RCA. They launched initially in Indianapolis to "test the market." Housed in NYC, the CEO was Nathanial Kwitt (again I think that's close to the spelling. I've all the news articles stashed somewhere and can, and will, get all the accurate information if there's still interest. Anyhow, USCI quickly outgrew Indianapolis and moved into the NYC and Philadelphia markets. I owned a satellite company in suburban Philly at the time called Galaxy Broadcast Services (GBS). We had successfully developed a FSS, C-band system aimed at G1 and were in the due diligence part of our funding process. The most amazing thing I'd ever seen was USCI providing service, in the clear, with absolutely no way to collect the monthly fees. GI had finalized the Videocipher platform but not incorporated it in USCI. They "sold" systems faster than they could get them installed but once installed there wasn't a revenue stream to support continuation of the service.

So, how do I know all of this? Well, we knew of the problems and that USCI was unable to make their loan payments because we were also working with GI to find an encryption for our DTH service. When things really got bad, we set up a JV with Warner-Amex to do a leveraged buyout of USCI. At that time Warner-Amex owned TMC, Showtime and a couple of other services. USCI was, as earlier mentioned, a five channel, no brand service, so we knew we would have premium channels from the start.

Want to know more? Let me know. I'm Blair Gilbert - blair@blairgilbert.com

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If you find the articles, I would enjoy reading more about USCI. I googled your name, looks like you were involved with Pegasus and with managing part of K-Prime on Comcast's behalf in the early 90's. When exactly did Primestar launch? Was it in 91 or 92?
I can vaguely remember, they started on K1 with, was it 5 superstations? Didn't they use B-MAC for encryption?

Oops ... Did a relocation and got sidetracked - sorry.

Let's see, you asked abut Primestar. Yes we started with five superstations (as I remember) and we were on K1 using B-MAC initially but then switched mid-stream. To what I can't remember just now except that it was a convoluted mess! I'll save the rest of the Primestar story for another time. - Oh, and yes again. I was the CEO for Comcast Satellite Communications.

Now, back to USCI ...

I've found three articles penned by my good friend Lloyd Covens (Channel Guide). They are attached. Lloyd and I would talk almost daily about the situation with USCI and thankfully what he didn't print is what was going on behind the scenes at the same time as USCI was trying to figure out whether the lights were on or off. I had launched GBS (Galaxy Broadcast Services) with a 4' FSS C-band system pointed at G-1. My friends at Chaparral where very helpful - especially Dr. H. Taylor Howard (Tay), God rest his soul.

During all of this we were also talking with Drew Lewis, the former Secretary of Transportation under President Reagan. Drew, at this time, was the CEO of Warner AMEX, the conglomerate of Warner Communications and American Express. Drew's offices were in Blue Bell, PA and he lived a short 15 minutes from GBS offices. And, to close that relationship question, we installed a 16' Paraclipse system at his farm feeding three homes with Luxor receivers and Chaparral feeds - talk about a project.

Back to the USCI story. We had negotiated a JV between GBS and Warner AMEX to structure a plan for us to take over USCI. You may remember that Warner owned TMC, Nickelodeon, WGN and some other fare at that point, so we had programming in the bag - plus Warner was going to provide the capital. As you'll read from Lloyd's story, Nate Kwit was a loose canon. Knowing that I went directly to General Instrument (Jim Bunker), Prudential and Francesco Galesi, to do our negotiations, totally unknown to Kwit.

Now, to take it to the next step, I'm also attaching a news article from the January 4, 1985 edition of Communications Daily that "plugs another hole" in the overall story.

The final is that in the midst of everything, we all awoke on April Fool's Day, April 1, 1985 to learn that at 12:01 AM that morning, USCI went dark. The legal wrangling that occurred from that point forward was nothing short of a three ring circus. We tried to get Warner to stay in the mix but at the same time the CEO of American Express, his name was Steve something, decided to separate the two entities, Drew was without a job, we lost our opportunity and funding. So my close acquaintance, Charlie Ergen ended up with the golden ring. Charlie and I sat many hours outside of the Opryland Jack Daniels bar discussing DTH/DBS. Always liked Charlie, but not so much that I wanted him to get there and not me.

That's the USCI story - let me know if you want the one on Primestar. Parts of it are equally interesting. Especially the interaction and dealings the MSOs had with the Department of Justice.

(This has been a fun trip down memory lane. The satellite industry doesn't owe me a penny. I've thoroughly enjoyed every single millisecond of it. Just wish it had a different conclusion.)

Blair Gilbert said:

That's the USCI story - let me know if you want the one on Primestar. Parts of it are equally interesting. Especially the interaction and dealings the MSOs had with the Department of Justice.

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Thank you Blair, I enjoyed the post and articles. I would certainly enjoy hearing more about Primestar if you'd care to share. Thanks again!

I'll second that I'd love to hear the Primestar chapter of the story.

Me three

Hi Guys, not sure if this thread is still active or not. Tonight I decided to google USCI and this is the first link I picked. My name is Tod and I was part of the original group of installers that drove around the midwest installing these test dishes. I was 22 at the time and had a great time. I believe the dish was 1.2 meters. The company I worked for was contracted to do the test installs and was called CT Video, located on the south side of Chicago. Believe it or not CT stood for Chuck and Tom, the two guys that owned it. They already had experience as contractors installing ON TV (channel 44 scrambled out of Chicago). After the test install program was over I went to work for RCA in Indianapolis to install and train techs for this new(boom) in technology. As previously stated it was short lived.... but what an adventure it was.
I remember installing dishes in farmland in the middle of nowhere. Once we turned on the TV most of the owners were completely stunned at the quality of the pictures.... They got the whole package free for a year as long as they filled out the weekly or monthly quality questions.
I don't know how they picked the actual customer aside from the obvious geographical needs. I do remember many people canceled the installs prior to my arrival because they thought it was to good to be true. I actually used a local phonebook to pick out random names on occasions.
We needed to install and move on to the next town, We worked in groups of two, seven days a week with an occasional day off. I believe we did it for 8-10 weeks!

I forgot to add this little tidbit. About a month into my employment at RCA I was involved in a photoshoot installing a dish on a very nice house in Indianapolis, which took all day. A photographer from New York came out along with a half a dozen executives to take pictures of me wrenching on this dish. They kept telling NOT to smile. It was supposed to be on the cover of the RCA annual report.....