Work Continues On Voom Satellites

[Walter L.]

source

Work Continues On Voom Satellites
April 18, 2005 – Satellite News

Although the decision to shut down Cablevision's Rainbow DBS operations, which did business under the Voom brand name, was made public earlier this month, work on a $740 million contract for five satellites continues from the spacecrafts' manufacturer Lockheed Martin, Dee Valleras, spokeswoman for Lockheed Martin told Satellite News. Cablevision announced the shutdown of Voom in an April 7 Securities and Exchange filing (SN, April 11). The satellite contracts were made public last November.

Why Cablevision has not told Lockheed Martin to cease work on the contract is not known, as a Cablevision spokesperson declined to comment. However, one industry source suggested it likely is only a matter of time before the contract is canceled.

"What it probably means is at this very moment, no one has bothered to issue a stop work to Lockheed Martin," the source told Satellite News. He noted that there would probably be some termination clauses and there may be a payment that needs to go from Cablevision to Lockheed Martin to cancel the contract. "They may still be sorting out" some financial issues on the contract, he added.

 

[salsadancer7]

THAT does not make sense....you are going to shut service and you don't tell a company that is making you multi-million dollar satellites not to shut down...can Cablevision REALLY be that irresponsible or could something be up when VOOM is done in the near future?

 

[Ilya]

Of course, Lockheed Martin cannot stop the work - this would be a contract violation, I assume.

Cablevision is the one who will have to stop it and pay the early termination penalties. But my guess is that the penalties would be the same, whether they stop the work now or a month later. So there is probably no rush for them to do it!

 

[Walter L.]

Maybe the contract calls for a payment of penalty immediately when they cancel. Ouch!!!

 

[rad]

Maybe they're seeing if Charlie wants to buy these also

 

[Vicki]

Of course, Lockheed Martin cannot stop the work - this would be a contract violation, I assume.

Cablevision is the one who will have to stop it and pay the early termination penalties. But my guess is that the penalties would be the same, whether they stop the work now or a month later. So there is probably no rush for them to do it!

Ilya, were there any penalities involved when VoOm asked SatGuys to pull their advertising? Just curious, because if there weren't any early termination penalties on that contract, it would make this all the more curious...except Walter could still be right about any penalties being due immediately.

Still looking for a glimmer of light at the end of the tunnel! Vicki

 

[mdonnelly]

Those satellites are marketable. CVC can sell them, possibly for a profit.

 

[Ilya]

Ilya, were there any penalities involved when VoOm asked SatGuys to pull their advertising?

Probably not. VOOM was on a month-to-month basis, I think. Ask Scott - he knows for sure.

 

[Ilya]

Actually, it looks like there is no termination fee for the new satellites! I just checked the latest Form 10-K by Cablevision and here is what it states:

Rainbow DBS has FCC licenses to construct, launch and operate five fixed service, Ka-band satellites and entered into a contract in November 2004 for the construction by Lockheed Martin of these five Ka-band satellites at a cost of $740 million. This amount excludes launch costs, Rainbow DBS has the right to terminate this contract prior to November 21, 2005 without penalty. If the contract is terminated subsequent to that date, Rainbow DBS would be required to make a termination payment, which at December 31, 2005 would not be significant. The Company currently expects to transfer this obligation to an entity that is not part of the Company or terminate the contract in connection with a shutdown of the Rainbow DBS operations.​

 

[Tvlman]

CVC sounds like the government doing business. Of course Martin could just sell the satellites once completed. If they stop work then they have no satellites to sell if CVC doesn't pay.

 

[mkottman]

Jimmy: For sale . . .

Maybe CVC is waiting for Martin to finish so that Jimmy can sell some more satellites out from under his father, he's good at doing that.

 

[danielle_s]

To be honest, I'm surprised that cablevision didn't cancel the sat contracts on January 20th when they sold rainbow 1. Charles did say that he's accepted that voom would not be part of the cablevision family but that wouldn't mean that voom wouldn't be part of his life. So unless Charles had a change of heart, here are the following underlying issues:

1)Cablevision wouldn't sell voom, the leased sat, customers or anything else so Charles decided to allow cablevision to close up shop and then pick up the pieces.

2)If lockeed martin is still working on the new sats then it's possible that motorola is still working on the dvr. So Charles is going to "somehow" pay motorola to finish the dvr.

3)After voom is closed and cablevision agrees to let charles dolan have what's left, beliving that he's just wasting his money, he rebrands voom and launches it toward the end of 2005 shortly before or after the mpeg4 chip cards are made. At such time the dvrs should be finished so they will be available to customers at the time of launch.

4)This will give him approximately 7 months to make sure all programming agreements are in place so that we don't have to worry about things like ppv and rsns.

5)Within less than 1.5yrs later the new sats launch and voom starts broadcasting locals in hd and adds interactive tv.

Possible but will it happen? I don't know.

 

[Jamey K]

Good show Danielle! This works much better than the idea of Voom somehow being saved before the end of the month. Your timeline of MPEG 4 and renegotiating contracts make sense.

 

[Vicki]

Good show Danielle! This works much better than the idea of Voom somehow being saved before the end of the month. Your timeline of MPEG 4 and renegotiating contracts make sense.

Can I hear an Amen!? Perhaps not probable, but definitely possible...I think...but then I don't know much about all this, except I'm hoping!! Vicki

 

[bryan27]

This is very interesting. I'm going to take a different side this time, which is very unusual for me.

The satellites ordered, as with all the geostationary satellites, can be used for different things and not necessarily for home delivery of television, though we all can hope.

These satellites may now be planned for other services such as, but not limited to, highspeed internet relay (IE: used to connect internet over the cable system), satellite telephone, telephone relay (IE: used to connect telephone services over the cable system to the telephone network), satellite news gathering, radio network distribution (IE: you don't see the radio network feeds on places like Lyngsat because those feeds use a completly different system and there is no consumer equipment for reception), and so many more uses.

 

[salsadancer7]

Brian27....with what you just said...can you say...VERIZON..?

 

[Vicki]

Brian27....with what you just said...can you say...VERIZON..?

Salsadancer7, I don't know much about all this (but I think Brian does!), so at this point I'd be willing to accept that idea...it's just that I like Danielle's explanation better!

Whatever happens, I just don't want to see the fruits of Charles Dolan's labor go to Dish, Direct, or Cable. I hope to see his hand in whatever emerges from this.

I suppose my feeling about Dish, Direct and Cable is like cutting off my nose to spite my face, but that's the way I feel. A new player, like Verison, might make me think differently, like Bryan suggests.

I'm so confused, and starting to get so depressed as time winds down...every program I watch just makes me feel worse...but I can't stop watching because it's just so damn "beautiful"...:river

Tissues, please!!!!!!!!! :river :river :river :river :river :river :river :river:river Vicki

 

[ksload]

Let's be real about this.

The only advantage that VOOM has right now is the HEADSTART it has over DBS and CABLE. Cable is closing the gap, with many cable companies offering more HD programming than Dish or DirecTv. If VOOM is waiting for the MPEG4 technology, it will be directly competing with Dish and DirecTv who will also be enjoying the compression that MPEG4 will bring IN THAT SAME TIME FRAME and will, at that time, be offering alot more HD programming.

VOOM's only chance at survival would be to increase its customer base while Dish and DirecTv play cat and mouse with each other and offer minimal HD programming. A six month or more dormancy for VOOM would be the end of it.

To be honest, I'm surprised that cablevision didn't cancel the sat contracts on January 20th when they sold rainbow 1. Charles did say that he's accepted that voom would not be part of the cablevision family but that wouldn't mean that voom wouldn't be part of his life. So unless Charles had a change of heart, here are the following underlying issues:

1)Cablevision wouldn't sell voom, the leased sat, customers or anything else so Charles decided to allow cablevision to close up shop and then pick up the pieces.

2)If lockeed martin is still working on the new sats then it's possible that motorola is still working on the dvr. So Charles is going to "somehow" pay motorola to finish the dvr.

3)After voom is closed and cablevision agrees to let charles dolan have what's left, beliving that he's just wasting his money, he rebrands voom and launches it toward the end of 2005 shortly before or after the mpeg4 chip cards are made. At such time the dvrs should be finished so they will be available to customers at the time of launch.

4)This will give him approximately 7 months to make sure all programming agreements are in place so that we don't have to worry about things like ppv and rsns.

5)Within less than 1.5yrs later the new sats launch and voom starts broadcasting locals in hd and adds interactive tv.

Possible but will it happen? I don't know.

 

[salsadancer7]

Folks....VOOM as we know it is DONE! Will it be reborn as SOMETHING else...that is what I am hoping and what my gut feeling is. Now Vicki...I TOO like Danielle's time line, but I threw the Verizon name because they seem to be the hot name being throw in the hat....all 'other' suitors to reincarnate VOOM have been luke warm names throw in the air. Ksload, I have to somewhat disagree with you because D* has said that thier main concentration with the new birds will be on locals...and E*....well, considering everything I have heard of their history of promise keeping, I doubt they will put anything in HD until at least late this year/early next year. And besides, I am sure EVERY former VOOM customer would JUMP at something similar to VOOM if it had NOTHING to do with either E*, D* or cable....right?

 

[danielle_s]

these sats were strictly designed for television. They could be used for satellite telephone and internet but I seriously doubt it. Also Lockeed Martin has not been paid from what I understand for the 2,3 or 4th sat. Once the building of the other 4 starts I believe that's when they are paid. I believe that they have already been paid for the 1st one, but I don't know. I believe that's why there are cancellation penalties in these contracts.

Unless E* considers the possiblity of continuing these sats then either cablevision will cancel the contract and lockeed martin will most likely sale/auction off the 1st sat or Charles Dolan, I'm keeping my fingers crossed, will have them all built to put voom back together.