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By Sophia Collier

Imagine a set-top box that could provide a full complement of video channels, including all local stations in any market, pay-per-view programming, interactive games, plus high-speed wireless Internet access. Imagine a wireless transmission system behind this set-top box that can be easily upgraded in capacity in less than a day through a simple add-in card at a local cell tower. Imagine this video service being offered to consumers throughout every market in the country for about $39 a month.

This system is Northpoint Technology. It could be carrying DBS signals but given the DBS companies' current stance it probably won't be. For many years the two DBS giants have fought Northpoint at the FCC, in Congress and in the press. We believe their opposition to Northpoint will place them on the wrong side of history. By opposing rather than embracing Northpoint as a complementary technology, the two DBS giants have committed themselves to a high cost, limited capacity infrastructure that can provide only an imperfect replacement to cable.

Lack of capacity is a significant competitive weakness for DBS that will only get much worse as HDTV and other rich media content become more prevalent. By rejecting Northpoint's many overtures to cooperate and closing themselves off to innovative terrestrial reuse of spectrum, the DBS giants squandered the opportunity to maximize their capacity, and, as a result, digital cable now threatens the growth of satellite TV.

At the dawn of the DBS industry in the early '90s, Northpoint inventors Carmen and Saleem Tawil, two communications engineers in Austin, Texas, had the terrific idea to solve the local signal problem by transmitting terrestrially in the same spectrum used by DBS. The Tawils worked out the geometry and power levels needed to operate without interference and were awarded six patents for the innovations.

In 1999 Northpoint applied to the FCC for operating licenses at the same time as seven satellite applicants that sought to operate non-geostationary satellite systems over the same frequencies. In 2000 Congress passed the ORBIT Act that exempts international and global satellite systems from licensing through competitive bidding. In 2001 the FCC determined that all parties could share the same spectrum and announced it would grant the satellite licenses while dismissing Northpoint's applications. Northpoint believes that it should be licensed in the same manner as the satellite companies.

Readers of these pages are no doubt aware that the satellite industry has been given virtually all of the spectrum it uses free of charge. The FCC has only held a total of four satellite auctions in its entire history. The last one was held almost seven years ago. Since that time the FCC has awarded over 150 satellite licenses without auctions, including dozens of licenses for domestic services. The fact that the FCC has not charged the satellite industry a high, up front "auction tax" is a crucial factor in the satellite industry's success. Hughes Electronics is the largest spectrum holder in the United States and it has never participated in a single auction. SES Americom is the second largest spectrum holder and, again, it has never participated in an auction.

Northpoint has not suggested that the FCC reclaim the satellite licenses so they can be sold to the highest bidder or even today hold DBS auctions. In fact, Northpoint invented a technology that allows it to share the spectrum used by satellites so that no displacement is necessary to accommodate new users. Northpoint simply seeks the same licensing terms that have been so successful for the satellite industry.

Of course, we are hardly surprised that industry incumbents would lobby Congress and the FCC to support an auction so as to delay and burden a new competitor. But this opposition is shortsighted. We believe a much more productive course for the DBS industry would be to embrace our technology and use it as an enabling platform to create a true, high capacity, low cost competitor to cable. DBS was first envisioned as a true alternative to the cable monopoly; yet, without the capacity needed for Internet and localized rich media applications it will never attain its full promise. Northpoint is the technology that can make this vision a reality.

Sophia Collier is chair of Northpoint Technology, Ltd., and Broadwave USA.

(Please note, the opinions expressed in this column are that of the author and not of SkyREPORT. To e-mail the editor: editor@skyreport.com.)

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