Who owns the Voom Contract?

[Dan Berndt]

Maintenance Contracts?

I signed on with VOOM back in 2003 but it came with a two year maintenance agreement that I have more that six months left on. That maintenance agreement was one of the key reasons I was willing to invest in VOOM. I know many people have recently signed up with six month agreements.

It's hard for me to believe that VOOM will discontinue service with outstanding contracts like this. I'm not a lawyer but I would think VOOM is obligate to honor these contracts. And if VOOM is sold, the purchaser also buys the VOOM contracts.

That brings up an interesting point, if the VOOM hardware has been sold who owns the maintenance contract on my receivers? I would be interested in how the Installs, Inc. contract with VOOM was affected by the sale. That's a bigger question, is VOOM going to hold the Installs, Inc. contract now?

It seems to me that what happens to the Installs, Inc. contract could be a clue as to what is going to happen to our VOOM service. If there is a time clause in the Installs, Inc. contract VOOM would definitely be in breach if they just turned the switch off. I think there are to many contract issues for VOOM to make any big changes anytime soon.

Maybe someone can explain to me the financials of VOOM. I know we have been told that VOOM is some $500 million in the hole but where are those expenses going? Even though VOOM has sold its satellite it could still lease the old fequencies from Dish.

VOOM could still maintain the set top units and point the dishes to Rainbow II if it lost the frequencies on Rainbow I. If we knew how much VOOM was paying for debt maintenance on Rainbow I maybe we could figure out how the sale will affect operating costs. If there is any kind of improvement in operating costs with the sell of Rainbow I, there may be opportunity for VOOM stay in operation.

 

[RabidSatelliteGuy]

I am a dish retailer and I talked to a regional manager who said that dish will dump the 26,000 subs on the satellite asap. He also said they don't have any official plan for the sat.

 

[gross67]

"I am a dish retailer and I talked to a regional manager who said that dish will dump the 26,000 subs on the satellite asap. He also said they don't have any official plan for the sat."


That's an interesting first post .........

 

[jeslevine]

They can't do anything until the FCC approves the deal

I am a dish retailer and I talked to a regional manager who said that dish will dump the 26,000 subs on the satellite asap. He also said they don't have any official plan for the sat.

I have both dish and Voom, and whoever is first with the most HD content, along with quality, that is where my business goes. Direct TV, Dish, or even cable

A lot of Dish subscribers are not very happy with Charlie, especially after he put them through the 921 ordeal, and now that most of the major flaws are fixed, dish indicates the 921 will NOT support mpeg4

 

[stevesmall]

"I am a dish retailer and I talked to a regional manager who said that dish will dump the 26,000 subs on the satellite asap. He also said they don't have any official plan for the sat."

I find that rather hard to believe since i never signed up with dish nor is their box compatible with voom. also didh dod not buy the customers, thats in the sec filing. so my guess is the regional manager is bluffing

 

[Lobstah]

"And if VOOM is sold, the purchaser also buys the VOOM contracts."

But VOOM is NOT sold, and VOOM still owns your equipment, or you do. Doesn't really matter. And VOOM does not have to stay in business just to honor your maintenance agreement, or 1,000 maintenance agreements. As for how bad they're hemoraging...that doesn't really matter either.
Their delivery mechanism has been sold, pending approval. If and when the sale goes through, we'll know what's going to happen.
It's unlikely there will be any huge announcements about anything before then, because if the deal doesn't go through, it could have an adverse effect on the value of all assetts, including the satellite.

So sit back, relax, and enjoy the show...for as long as it runs

Lob

 

[Dan Berndt]

I don't think my posting was very clear and I'm not sure I can make it clearer but I'm going to try. I guess my real question is does a satellite service provider need to OWN a satellite in order to have a satellite service? It seems like quite a monopoly if a satellite owner can refuse to broadcast any signals that are they do not own.

Cablevision was a programming company before it started VOOM. As far as we know VOOM or Rainbow still has the leased frequencies on Rainbow II. Can VOOM survive on leased frequencies from someone elses satellite?

As I see it there are four distinct parts of a satellite service; there is the programming, there is the satellite uplink, there is the satellite itself and there are the receivers. I see no reason why any or all of these parts could not be owned separately if the coordination worked. Rainbow lost its' satellite but not all of its' frequencies and it still has programming and receivers.

Maybe someone more knowledgable than I can tell us if Rainbow will still have uplink capabilities after the sell of the satellite. Even if Rainbow sells its' uplink equipment it could still lease uplink from someone else. Does anyone know how leasing uplink services would work?

We also have no word on the Rainbow contract on the five new satellites. With 5000 channels available on these satellites, it seems reasonable that Rainbow could sell service off of these satellites to other service providers. It seems like Cablevision could start a separate division or spin off a service just to provide satellite service to other service providers.

Wow! So many questions, so many possibilities.

 

[branchbouncer]

Once a company sells it's service to another provider all past contracts are null and void(VOOM,ATT,etc)you entered into a contract with the orginal company-not it's division-they can honor the past contract if they choose or not,in the same way if you do not like the future parent company you can tell them to shove the past contract.If you bought VOOM equipment and think that you deserve a buy back that does't happen either.Most people today do not read the TOS and when things take a dump the first reply is "I didn't KNOW that".Hopefully you will not have that problem-----GOOD LUCK

 

[jame_g]

Once a company sells it's service to another provider all past contracts are null and void(VOOM,ATT,etc)you entered into a contract with the orginal company-not it's division-they can honor the past contract if they choose or not,in the same way if you do not like the future parent company you can tell them to shove the past contract.If you bought VOOM equipment and think that you deserve a buy back that does't happen either.Most people today do not read the TOS and when things take a dump the first reply is "I didn't KNOW that".Hopefully you will not have that problem-----GOOD LUCK

This is not necessarily true. Many times when a company sells a service, they are actually selling all their shares of stock in a subsidiary company.

Also, many contracts (and TOS) include language that allows the company to sell or transfer that contract.

The Voom TOS does include many statements limiting their liability and limiting the warranty on equipment, allowing them to modify the agreement at their discretion, and stating that disagreements are subject to individual arbitration.

 

[bryan27]

I guess my real question is does a satellite service provider need to OWN a satellite in order to have a satellite service?

No, it does not. However, none of the DBS satellites are Common Carriers. Which means they have chosen to privately own, operate, and program their satellites. Satellites which are Common Carriers own and maintain the satellites and satellite services lease space on the satellite. Common Carriers must provide satellite space for those who want to use it, provided whoever wants to use the satellite can pay for the space, there is enough space to accomidate them and the satellite service can uplink it's programming.

For an example of mulitiple providers using a Common Carrier satellite for DTH (Direct To Home) service see the KU-Band portion of Intelsat Americas 5 at 97w. http://www.lyngsat.com/ia5.html current program providers include GlobeCast World TV using 9 transponders, Pittsburgh International Telecom with 2 transponders, ABS/CBN International and ETTV America with 1 transponder each. To subscribe to channels from all 4 providers you would need 4 different receivers, but all of them have free channels that work with standard MPEG-2 receivers.

Maybe someone more knowledgable than I can tell us if Rainbow will still have uplink capabilities after the sell of the satellite. Even if Rainbow sells its' uplink equipment it could still lease uplink from someone else. Does anyone know how leasing uplink services would work?

Yes, Rainbow still has an uplink facility. So it will not need to lease an uplink facility. Nearly all cable channel owners have an uplink facility. There are literally 1000's of uplink facilites around the country. Don't forget that Rainbow owns Fox Sports Net, AMC, IFC, and Fuse and their uplink facility on the East Coast uplinks those channels along with VOOM's channels.

It is possible to have another company do the uplink for you, but it is not typical to have another facility uplink more than a few of your channels. Many facilites uplink hundreds of channels, but they are uplinking for several dozen providers.

Rainbow has an uplink facility. The receivers which are manufactured by Motorola and also are the same ones used by Star Choice will work on any satellite frequencies, it is the dish size and LNB that determines the band you will receive. Finally Rainbow has a long term lease for frequencies on AMC-6 at 72w. It is possible service could be continued on AMC-6, but nothing has been released to indicate that Rainbow will continue the lease.

We also have no word on the Rainbow contract on the five new satellites.

Partially True. New satellites are ordered, designed, and custom built, but any future satellites Rainbow had on order were so early in the planning stages it would be very easy to cancel the order without penality.

 

[James Long]

No, it does not. However, none of the DBS satellites are Common Carriers. Which means they have chosen to privately own, operate, and program their satellites.

While I don't agree with the use of the term "common carrier", E* leases space on their E3 satellite at 61.5 to SkyAngel. They currently lease two transponders to SkyAngel in exchange for the use of six channels licensed to SkyAngel and other consideration.

common carrier: In a telecommunications context, a telecommunications company that holds itself out to the public for hire to provide communications transmission services.​

E3 isn't leased "to the public", but they have leased their satellite capacity and in return SkyAngel have leased their licensed spectrum to E*. It is possible, however unlikely, that V* will lease space on R1 or another satellite to continue service.

Rainbow has an uplink facility. Rainbow has a long term lease for frequencies on AMC-6 at 72w. It is possible service could be continued on AMC-6, but nothing has been released to indicate that Rainbow will continue the lease.

The strategic planning goes on. If it had not been for E*'s standing offer for Rainbow1 and the associated transponder licenses we probably would not know how close Voom is to not being a service. Cablevision had an offer on the table and a willing buyer to infuse cash into their company and cover part of their losses - and they jumped on it.

It is possible that Cablevision will find buyers for their other Voom assets, but nobody wants to buy the liabilities. Cablevision didn't pay much for the western orbital slots at 166 and 175 ... if sold they would probably be discounted as much as Rainbow1 was. The sale of those slots probably would come in around 6 million at best. Their unstarted satellites can be cancelled ... perhaps with some penalty attached. Any that have been started construction will have some penalty. Some other company could bail Rainbow DBS out of those contracts if the price is right.

The customer base is a liability. Smart companies don't buy liabilities unless the benefit outweighs the obligations. That's why nobody is buying all of Voom. Too many obligations.

The content is the best thing going for Rainbow DBS. They may end up being a direct to cable or other B2B content provider that doesn't deal directly with customers. But nobody knows today where they will end up. Perhaps when the other assets are gone they will be able to continue in some form. Just not as a standalone service. A lot of companies have gone the B2B route.

JL