Echostar's Use of Rainbow-1 Satellite

[rtt2]

It sure sounds like there is a letter of agreement. This means that the bidding has finished and they are waiting to take possession and exchange money.
There is most likely a very stiff penalty if Cablevision backs out of the agreement.

All this would be standard fron the disclosure made so far to the SEC.

 

[rtt2]

Also Echostar cannot take possession yet.
But Echostar is most certainly working with Cablevision personnel to understand the asset and become aquainted with the specs and requirements of the asset.

 

[jame_g]

Over at DBS Forums the vultures are circling debating the best dissection of the newly acquired assets. And I point out the deal is not done yet is it?

But then again Dan Collins never had an ounce of compassion for Voom from the start.

One of the early press releases mentioned a "definitive agreement" being in placed. (Even Echostar's website mentioned an agreement immediately.) This means that there is a contract in place for the sale to be completed subject to regualatory approvals (FCC, SEC, etc).

If regulatory approval is declined, there can be no sale and there will be no penalties. However, if approval happens then there are usually very significant penalties specified in the agreement should either party back out. Harsh enough so that a rival bid would have to be significantly better to make it worth while to pay out the penalty.

(The company I work for is being sold and the penalty is something like 40 million dollars if we back out of the sale should the SEC approve.)

In the meantime both companies are limited to some extent about what they can and cannot do, but E* can start doing some things like more closely inspecting and learning about the assets they are buying.

 

[rtt2]

Remember in the proposed merger between Echostar and DirecTV years ago. They had an agreement and did not get regulatory approval by the FCC and there was a penalty. Charlie had to pay something like $600 million cash even though the merger never went through.

 

[mkm4]

Not quite..

As noted in what you quoted, E3 is no longer capable of covering all of the transponders available to E* for programming. Rainbow1 isn't much help as most of its transponders are ODD, however the spotbeam arrangements could help multiply the output, and the simple availablilty of 11 more transponders makes the loss of use of a couple transponders less important.

JL

Voom only used the odd transponders on Rainbow 1. The sat has a full compliment of transponders.

 

[jdmcs]

Rainbow1 isn't much help as most of its transponders are ODD, however the spotbeam arrangements could help multiply the output, and the simple availablilty of 11 more transponders makes the loss of use of a couple transponders less important.

Actually, I believe that E* is purchasing the satellite AND the rights to those odd transponders. From E*'s press release:

EchoStar has agreed to purchase Rainbow 1, a direct broadcast satellite (DBS) located at 61.5 degrees West Longitude, together with the rights to 11 DBS frequencies at that location.

I suspect that E* may use the new satellite to replace the capacity lost at 61.5 due to E*3's failures... but only time will tell.

 

[James Long]

Voom only used the odd transponders on Rainbow 1. The sat has a full compliment of transponders.

Really, got a source for that or just "something you heard before"?

My source is the ITU filings that Cablevision made. And, btw, Rainbow1 did for a time use TP24 - an even transponder which is on its ITU chart.

JL

 

[James Long]

Actually, I believe that E* is purchasing the satellite AND the rights to those odd transponders.

Yes ... that isn't contrary to what I posted. Having license to those ELEVEN makes losing TWO less of a problem.

I suspect that E* may use the new satellite to replace the capacity lost at 61.5 due to E*3's failures... but only time will tell.

The lost capacity on E3 is on the EVEN side. All odd transmitters currently available to E* (SA's 4) are active. It's the even ones (their 11 and SA's 4) that they don't have enough working TPs to cover. Unless Rainbow1 has been underreported on capability, it can't cover more than one even transponders.

JL

 

[Stargazer]

Does Dish Network have enough space at 61.5 on the transponders that they have to provide the same service currently offered to VoOm subscribers if they would shift all the content from their old satellite to the new one? I am thinking that there isn't quit enough space for all the channels.

 

[mkm4]

Really, got a source for that or just "something you heard before"?

It was based on some things I've read a long time ago. I guess I'm remebering it wrong.

 

[James Long]

Does Dish Network have enough space at 61.5 on the transponders that they have to provide the same service currently offered to VoOm subscribers if they would shift all the content from their old satellite to the new one? I am thinking that there isn't quit enough space for all the channels.

There is as long as they keep both satellites running.

But I do not and would not expect any Voom content to continue once E* owns the satellite.

It was based on some things I've read a long time ago. I guess I'm remebering it wrong.

No problem. You may be right, but at this point it isn't backd up by any data other than rumor.

JL

 

[BobMurdoch]

Just how much does a new satellite cost? My guess is quite a bit more than 200 mil.

The Wall St. Journal quoted $250 Million as the "new" cost of the Rainbow 1 satellite. PLUS they get the uplink center AND they don't have to wait 2 years to build, launch, test, and position it.

D*'s bandwidth advantage goes away once this sale is approved (although D* does have the one dish advantage).

Now we just need E* to tell us what they plan on doing with it and we'll be fine. New HD for everyone and we'll be ecstatic. New HD LILs and those in the big cities will be happy. New locals for East Bumblepuck, Wyoming and Sri Lankan Dart Matches and we'll be TICKED.

 

[RVD420]

Remember in the proposed merger between Echostar and DirecTV years ago. They had an agreement and did not get regulatory approval by the FCC and there was a penalty. Charlie had to pay something like $600 million cash even though the merger never went through.

Charlie didn't have to pay the penalty.
The way the DTV Echo merger was setup there was a $600 million "breakup fee" if the deal was not done my a specified date.

The DTV Echo merger was denied approval by the FCC and the SEC. The ruling could have been fought, but the DTV group offered to let Echo off the hook for the breakup fee (and face it with the FCC decision coming days before the drop dead date Charlie would not have been successful in any type of legal challenge.)

 

[James Long]

It is all about the bandwidth ...

D*'s bandwidth advantage goes away once this sale is approved (although D* does have the one dish advantage).

What are you on? E* has the bandwidth advantage.

E* has more transponder slots on Dish500 than D* has on all three of their DBS satellite (which wins the One Dish math 50 to 46). Add in the kuFSS bandwidth on either Superdish and E* really beats D* on one dish bandwidth (82 to 46)*.

Then if you want to go all out you can add in the two active wing locations - 32 transponders at 148 and 17 transponders (pre Rainbow1, including 6 transponders borrowed from SkyAngel) on 61.5 . D* has a second dish satellite with a few transponders at 72.5 for some local markets.

What is coming to mix things up is D*'s ka satellites. On paper they use a lot more bandwidth. But what remains to be proven is how many channels can actually be fed in that bandwidth. E* hit that problem because AMC-2 at 105 is underpowered. That is being fixed (AMC-15 is in orbit but not quite in place). Is D*'s new ka dish a "one dish" solution?

E* has failed to place all locals on the same dish, and that - by order of the Congress and the President - will be fixed by the middle of next year. In reality it will be fixed this fall. So the 'one dish' for all each market's locals will apply equally to E* and D*. They have had the bandwidth, just not the desire or the technology (high density Spotbeam satellites).

JL
*105 has 24 transponder but uses the same bandwidth as 121 with 32 DBS sized transmitter.

 

[Dvlos]

E* will not add more HD which is what it boils down to, and that means I'm left without a DBS company if Voom goes under.

 

[bryan27]

From trying to weed through all this information things can really get messed up. E* is buying the Rainbow 1 satellite and the SD uplink center. V* has a uplink center which is currently being used on the East Coast.

The purchase does not include the 11 licenses. The 11 licenses will still be held by V*. The FCC filing is only a transfer of control of the Rainbow 1 satellite and the licenses to transmit from the SD uplink center, not the 11 DBS Frequency Licenses held by V*.

If E* were to purchase the 11 licenses it would take nearly 18 months for approval as it will be open for public comment. Public comment in license transfers is 180 days followed by rebuttal and additional comments. Typically 360 days just in the comment period, followed by several months of FCC discussion before a deceision is released.

Like Sky Angel, V* will be a license holder without a satellite. Although more information is needed it appears that V* is selling the satellite to E* and there is going to be an agreement similar to that between Sky Angel and E*. Perhaps something like V* sells the satellite and uplink center far below what it is worth. V* gets to use some of their TPs which they still own and leases the rest of the TPs back to E*.

 

[riffjim4069]

From trying to weed through all this information things can really get messed up. E* is buying the Rainbow 1 satellite and the SD uplink center. V* has a uplink center which is currently being used on the East Coast.

The purchase does not include the 11 licenses. The 11 licenses will still be held by V*. The FCC filing is only a transfer of control of the Rainbow 1 satellite and the licenses to transmit from the SD uplink center, not the 11 DBS Frequency Licenses held by V*.

If E* were to purchase the 11 licenses it would take nearly 18 months for approval as it will be open for public comment. Public comment in license transfers is 180 days followed by rebuttal and additional comments. Typically 360 days just in the comment period, followed by several months of FCC discussion before a deceision is released.

Like Sky Angel, V* will be a license holder without a satellite. Although more information is needed it appears that V* is selling the satellite to E* and there is going to be an agreement similar to that between Sky Angel and E*. Perhaps something like V* sells the satellite and uplink center far below what it is worth. V* gets to use some of their TPs which they still own and leases the rest of the TPs back to E*.

Can this be possible? Bryan27, your argument makes sense, but I must admit that I don't know doodley squat about the licensing/approval process.

 

[joemama]

The purchase does not include the 11 licenses. The 11 licenses will still be held by V*. The FCC filing is only a transfer of control of the Rainbow 1 satellite and the licenses to transmit from the SD uplink center, not the 11 DBS Frequency Licenses held by V*.

Straight from the press release on the E* site:

Specifically, EchoStar has agreed to purchase Rainbow 1, a direct broadcast satellite (DBS) located at 61.5 degrees West Longitude, together with the rights to 11 DBS frequencies at that location.

 

[bryan27]

Oops my bad, I found where it says it includes the licenses.

 

[richard_rd]

I think Chalie should do a survey of his existing HD customers and see if they would be willing to pay more for an enhanced HD channel Package. If Chalie has 10 Million customers and 10% of them have HD pack (TNT/HDNETx2/DHD/ESPN/OTA_locals) and hallf of that 10% is willing to pay $10 to $20 more a month for a HD Pack+ service that has an additional 21-26 HD channels (Voom21, starz/max/UHD/TMC/encore).

That would be 500,000 HD subs x $15/month increase = $7.5 Million extra a month.

Something to think about Charlie!!!!!!!

To save bandwitdh they could Reduce the Voom21 down to Voom10 (combine the 10 movie chanels down to 2 to reduce repeats/loops, combine Gallery/Auction/Ultra into 1 channel. Monsters, Rush, Rave, Anamania, HDNEWS, Equator, WordSport deserve their dedicated channels! Get rid of Moov dedicated channel and maybe play 3 minute Moov videos during intermision breaks on the movie channels).

VOOM could not get the Sub numbers to make the extended HD program package a profitable business, But with the amount of subs DishNetwork or DirecTV have i can't see why either of them could not make an extended 40+ channel package profitable. I know that i would be willing to pay the extra $10 to $20 a month to Dish or direcTV for an extended higher level of HD service. Charge $10 month for the 5-10 HD channels, and offer an advanced HD service for $20-30 a month.