Echostar & DirecTV team up

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http://www.thestreet.com/_yahoo/tech/internet/10265051.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

DirecTV, EchoStar Bundle Up

By Sandy Brown
TheStreet.com Staff Reporter
1/30/2006 11:28 AM EST
Click here for more stories by Sandy Brown


Rupert Murdoch's DirecTV (DTV:NYSE - commentary - research - Cramer's Take) is linking up with rival EchoStar Communications (DISH:Nasdaq - commentary - research - Cramer's Take) to launch a nationwide wireless broadband network, TheStreet.com has learned.

Seeking to keep pace with peers in the telecom and cable TV industries, DirecTV is building a network to offer its own wireless broadband services to consumers, according to two people familiar with the deal. These people say that DirecTV is working with EchoStar and seeking final bids from tower companies in a push to put the network together.





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DirecTV, the satellite TV provider controlled by Murdoch's News Corp. (NWS:NYSE - commentary - research - Cramer's Take), wants to profit from offering the so-called triple threat of television, telephone and Internet services that some rivals already dangle before consumers. Operators like the triple threat because it increases both revenue and customer loyalty. So far satellite companies have not been able to fully capitalize on this so-called bundling push because of their lack of two-way transmission capability.

If News Corp. is able to build out wireless data service through DirecTV, it could mark a large change in the competitive landscape.

"This could re-focus attention on satellite at a time when it is being largely ignored as a competitive threat to cable," said one analyst.

A News Corp. rep referred calls to DirecTV. DirecTV and EchoStar representatives weren't immediately available for comment.

News Corp. Chairman Murdoch said late last year that his wireless strategy would become apparent within the next couple of months. He said the company could invest $1 billion in such plans. One source said, however, that the deal could be even bigger.

While both DirecTV and EchoStar offer high-speed data services through co-marketing agreements with telcos, they are discovering the myriad advantages of in-house triple-threat service. Cable system operators like Time Warner (TWX:NYSE - commentary - research - Cramer's Take), Comcast (CMCSA:Nasdaq - commentary - research - Cramer's Take) and Cablevision (CVC:NYSE - commentary - research - Cramer's Take) have been competing with big telcos like Verizon (VZ:NYSE - commentary - research - Cramer's Take) and AT&T (T:NYSE - commentary - research - Cramer's Take) on the triple-threat push.

 

[Chris Freeland]

I have seen other rumors out their about this as well, I hope this happens. D* and E* both need this to better compete with the cable company's and some telephone company's IPTV services like Verizon and AT&T have in some markets. In the markets where D* and E* have bundling deals with local phone company's you have to be a new customer of D* or E* because these bundles are controlled by the phone company, if you are a current customer you can forget the discount for bundling DSL and DBS. If D* and E* do this joint venture in Wi-Max service, new and current customers for both DBS providers can take advantage of these bundling deals because each of the DBS providers would have complete control on their end. Doing this jointly will also allow them to share expenses and then they can each then structure their own bundles however they please. Other services like true VOD (no dvr neaded) and digital phone could be easily added and it would be real easy for installers to add a small outside antenna to the dish or roof to receive VOD, Internet and digital phone.

 

[Stargazer]

DirecTv and Dish Network will desperately need the bundle to stay alive in the future and especially to get in the IPTV business. If they dont do it somebody else will.

 

[Zookster]

Just this week I finally gave in to my cable company's HD Bundle, which was a much better offer than I could've ever cobbled together myself from Dish, a DSL provider, and a local phone company service, saving me $30-$40 in the process. I really liked being with E* the past three years, but with their new metallic HD packs and pricing structure (for HD channels I don't really want, ie VOOM), it just makes more sense to bundle with cable with no commitment and see how the satellite or IPTV landscape looks one year from now. I'm hoping the competition (with everyone having the ability to bundle) will make everyone's services better and more affordable in the longrun.

 

[waltinvt]

This could be huge if it becomes reality. While I didn't really support the attempt at merger between "D" & "E" a few years ago, I now do see where much could be gained in terms of reducing redundancy of bandwidth use while still fostering competition in programming, picture quality, hardware and many other aspects of what satellite provides.

 

[MikeD-C05]

Why couldn't both companies do the same partnership to do all the hd and sd locals in the country? When I talked about them doing a partnership to do locals as a spin off company or co owned company , everyone said no way they can do that. Now they are partnering to do broadband internet service . Couldn't they do the same for locals too? That would surely be a triple threat if both sat companies could do both national channels / locals in both sd and hd for the entire country and also broadband internet service as well. They would definately be able to not only compete with cable but possibly decimate them as well. Especially if they can do video on demand like cable through their combined internet service.

 

[Chris Freeland]

Why couldn't both companies do the same partnership to do all the hd and sd locals in the country? When I talked about them doing a partnership to do locals as a spin off company or co owned company , everyone said no way they can do that. Now they are partnering to do broadband internet service . Couldn't they do the same for locals too? That would surely be a triple threat if both sat companies could do both national channels / locals in both sd and hd for the entire country and also broadband internet service as well. They would definately be able to not only compete with cable but possibly decimate them as well. Especially if they can do video on demand like cable through their combined internet service.

If I am not mistaken D* and E* do share some lil pop's in some markets. I do not know about the Mpeg4, however for SD, D* uses a propritary form of Mpeg2 and E* uses a Internationly used form of Mpeg2, in order to share satellite's they would have to send out 2 streams if I am not mistaken which would defeat the whole purpose of sharing. The wireless broadband that D* and E* will likely do jointly is terrestrial, will most likely be a form of WI-Max, they will not need satellite for this service, so basically they will be sharing a bunch of cell tower access.

 

[Sarang]

Why couldn't both companies do the same partnership to do all the hd and sd locals in the country? When I talked about them doing a partnership to do locals as a spin off company or co owned company , everyone said no way they can do that. Now they are partnering to do broadband internet service . Couldn't they do the same for locals too? That would surely be a triple threat if both sat companies could do both national channels / locals in both sd and hd for the entire country and also broadband internet service as well. They would definately be able to not only compete with cable but possibly decimate them as well. Especially if they can do video on demand like cable through their combined internet service.

You got it HALF right. I think it would be a great idea for Dish and FoxTV to join forces on locals, HD and SD, just because it lessens Cable overall as a threat in terms of offerings. Let us not forget that all Cable has to offer is the locals of that market in SD and HD, in the process a LOT more bandwidth is available for cable to offer PPV, HD and nationals. The Sat. companies, to compete however, have to repeat the SAME progamming with affliaties and suck up bandwidth like crack, especially on HD LiL's. I suspect in the future Dish and FoxTV might HAVE to do this to compete with the cable companies, especially when HD versions of channels start to phase out their SD counterparts.

 

[dragon002]

why would rupert murdoch hand over the rights to fox to dish when he also owns directv? that is the most illogical question i have ever heard.

 

[Rlanham]

Great, first HD-"lite", now Broadband-"Lite"....Typical satellite speeds of 50/400, poor latency and bandwith restrictions.

 

[Sarang]

why would rupert murdoch hand over the rights to fox to dish when he also owns directv? that is the most illogical question i have ever heard.

If you're referring to me saying FoxTV it's my way of completely slamming DirecTV being owned by Fox so instead of saying DirecTV I say FoxTV.

 

[Chris Freeland]

Great, first HD-"lite", now Broadband-"Lite"....Typical satellite speeds of 50/400, poor latency and bandwith restrictions.

No, they are not talking about doing broadband via satellite, they are talking about doing wireless broadband using Wi-Max, they will use a network of cell phone towers to distribute the service. All you will need is a small outside antenna connected to your house or dish with an Ethernet cable connecting the antenna with a router and your home network. No modem should be needed, once the system is installed D* or E*would likely down load software to control access and speeds should be similar to Wi-Fi.

 

[Stargazer]

Why would a modem not be needed? One is needed for cable and dsl and for the wisp's today aint they? Maybe if the antenna's got cheap enough they would build them into the satellite dishes so that way you could just sign up for the service without someone needing to come out. Or maybe a simple kit will allow you to install it where your satellite dish is (attach it to the back of the dish).

 

[Chris Freeland]

Why would a modem not be needed? One is needed for cable and dsl and for the wisp's today aint they? Maybe if the antenna's got cheap enough they would build them into the satellite dishes so that way you could just sign up for the service without someone needing to come out. Or maybe a simple kit will allow you to install it where your satellite dish is (attach it to the back of the dish).

Because Wi-Max is just like Wi-Fi except with a more powerful signal, 6 miles is what I read the distance is. Works Just like when you go into a restaurant that has Wi-Fi available, as long as you have a card in your laptop, you can log on, with Wi-Max the signal goes farther and if you have an antenna and the proper software from E* or D* on all your PC's, laptops and other devices on your home network allowing access to D* or E* service, that is all you will need. You are correct, it might be possible for D* or E* to build the antenna in to the dish in some way, perhaps a clip on like the TV antenna's, and it should be possible once the antenna is connected to a router for E* or D* to simply down load the access software with a click of a mouse and your credit card # .

 

[Stargazer]

If they are going to use wi-max then wouldnt they try to sell this service to those that do not even have the satellite service? Sounds like a new business they are going to get into. They might be able to compete with the other internet providers just for the simple fact that you can take your laptop almost anywhere and be able to use the internet on it even in the country if they make it available out there. Maybe they could figure out how to use the same wire for satellite for the internet access as well. I'm sure they would implement some functionality into their receivers in the future to take advantage of the broadband internet that they have. They might even say that would be their solution for calling in information such as ppv's, a way to transmit back information regarding to where the receivers are located (or if they are all at the same location/all hooked to the same dish) without the phone line needed. They could even offer wireless television on the go with the DVR functions like the pocket DVR.

 

[Rlanham]

No, they are not talking about doing broadband via satellite, they are talking about doing wireless broadband using Wi-Max, they will use a network of cell phone towers to distribute the service. All you will need is a small outside antenna connected to your house or dish with an Ethernet cable connecting the antenna with a router and your home network. No modem should be needed, once the system is installed D* or E*would likely down load software to control access and speeds should be similar to Wi-Fi.

Noted.

I have WDSL (wifi, wireless DSL) in my neighborhood subdivision. I have a small square flat antennae on my roof, that has has a coax going to a radio receiver in the house, that in turn plugs into a router. Signal is transmitted from a central shared T-1 line, with a supposed 18 mile range. Can't wait til cable or dsl is offered in my neighborhood.

4GB/month max download bandwith. Some days I get 1200/1200, other days I get 100/400. All of this pleasure for $49.95/month.
Lots of lost packets, even though I have a clean line of site to the tower, and therefore poor latency. I have 384/768 DSL at work and I get great latency & it is a pleasure to surf.