Harps Products - Archived News April 2008

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DISH Network on Monday launched a fiber-to-the-home (FTTH) satellite TV programming solution for multiple dwelling units (MDUs).

Called DISH Optical Network, the system has the capacity to deliver up to 400 high-def programming channels to each DISH Network subscriber via a single strand of fiber optic cable, the company said. The base system supports up to 128 subscribers within an MDU and is scalable to support thousands of customers.

Each subscriber within a DISH Optical Network MDU can have up to six standard DISH Network receivers, including a HD DVR. Brian Yohn, vice president of commercial services at DISH, said the system requires minimal wiring, is affordable and offers customers access to the complete DISH Network programming lineup.

The DISH Optical Network, which will be available in production quantities later in the year, expands DISH Network's distribution offerings for MDU customers. The company said its L-band solution works in a garden-style community while SMATV and QAM systems can be utilized for high-rise buildings and universities.

The main broadcast lobby in Washington, D.C., was recently back at the Portals fighting the proposed merger between XM and Sirius.

According to a filing at the Federal Communications Commission, David Rehr and Marsha MacBride of the National Association of Broadcasters met with Commissioner Michael Copps about the deal. The group has been vigorously fighting the transaction, which needs the blessing of the FCC to move toward completion.

The filing, describing what was discussed at the meeting, detailed NAB's concerns that the pending merger could undermine fair competition in local radio markets, and violate the FCC's long-standing prohibition against a merger of the nation's only two satellite radio licensees. The association also warned against the creation of a "regulated satellite radio monopoly."

The FCC remains the only regulatory hurdle for the companies. In March, the Justice Department's antitrust staff cleared the merger.

On Thursday, Craig Moffett of Bernstein downgraded DIRECTV shares to market perform and maintained a $30 price target on the stock.

In a note, the analyst said a recent rally for DIRECTV shares has brought the company's stock to within 14 percent of Bernstein's target price. At the same time, DIRECTV's relative valuation compared to DISH Network has opened up, Moffett said.

"We see reasons for a more cautious stance exiting what should be a solid first quarter," he said.

As HDTV penetration has increased, DIRECTV shares have seen a jump. As for DISH, the company's lower-end customer base "has been much more directly impacted by macro-softness," Moffett said.

And while the first quarter could be strong for DIRECTV, the second quarter could be a different story.

Sales of HDTV sets traditionally fall after the Super Bowl, and that could hamper DIRECTV's ongoing high-def push. And "the impact of the housing crisis is likely to be felt the most strongly in the second quarter, already the seasonally weakest quarter for DBS," the analyst said.

Also, AT&T "will accrue to DISH Network, not DIRECTV, in the second quarter," Moffett said. "While well-telegraphed, the April 1 switch to DISH Network will have a significant impact on net additions in the second quarter."

The No. 2 DBS provider has taken another step into the mobile world.

On Thursday, DISH Network said it is working with Alcatel-Lucent to test the DVB-SH (Digital Video Broadcasting - Satellite services to Handhelds) mobile broadcast technology in the United States. The evaluation will take place at DISH's laboratories in Atlanta between May and August.

The objective of the trial is to validate the performance and cost-efficiency of the DVB-SH standard, the companies said.

DVB-SH is an evolution of DVB-H and a mobile broadcast standard allowing for cost-effective mobile TV deployments. It can be used in any frequency spectrum below 3GHz and in terrestrial, satellite or hybrid networks, DISH said.

Said Nolan Daines, senior vice president of strategic initiatives for DISH Network, "Considering the global momentum of DVB-SH, we decided that performing a critical analysis of this new open standard was the right thing to do for DISH Network. We look forward to working in tandem with Alcatel-Lucent during this testing phase."

DISH Network/EchoStar, along with security partner NagraStar and Bell ExpressVu, achieved another anti-piracy victory in the Canadian Courts.

Jeremy Corkery, also known in court cases and piracy circles as "NagraGuy," was found to be in contempt of a court order made by the Ontario Superior Court of Justice, stated a DISH release. The companies alleged that Corkery was a well-known satellite piracy coder and the primary officer of Blue Screen Computer Services.

Last year, the court ordered Corkery to grant the companies access to a number of computer hard drives and electronic media in his possession for the purpose preserving evidence for litigation. Corkery refused to comply with the order, the companies said. Thus, the court ruled that Corkery deliberately interfered with the efforts of the companies to exercise their authority.

A sentencing hearing is pending.

The case marks the fifth time that a satellite TV pirate in Canada has been held in contempt of orders obtained by the companies in the Canadian Courts. The four previous pirates were all sentenced to terms of imprisonment, the companies said.

NEWS BRIEFS: Test Your Satellite Phone

Iridium Satellite formed a partnership with ProtectingAmerica.org and the American Red Cross to promote the second annual "Test Your Satellite Phone" Week, which kicks off May 25. The goal is to increase satellite phone user knowledge and help users confirm their access to critical communication services that satellite phones provide in an emergency.

LAUNCHES - Later today, Arianespace is scheduled to fly its second mission of the year, launching two satellites from facilities in South America. STAR ONE C2 for Brazilian operator Star One and VINASAT-1 for Vietnam Post and Telecommunications Corporation (VNPT) were ready for today's mission as of press time late Thursday.

During opening remarks in a California federal court trial pitting NDS Group against EchoStar and NagraStar, an attorney for the News Corp.-controlled TV technology company denied accusations that it was engaged in spying on the satellite entity.

Still, according to wire reports covering the event, that NDS attorney said the company engaged in what he called "reverse engineering" by obtaining the codes of a competing conditional access technology, part of an effort to monitor piracy.

"Because this is a competitive business, NDS also monitors competitors," NDS attorney Richard Stone, as quoted by Reuters, told jurors. "NDS has done nothing to illegally harm or damage EchoStar. All NDS has done is compete hard and fair in the marketplace."

EchoStar and NagraStar are seeking $1 billion in damages in the litigation, alleging that NDS compromised the conditional access technology utilized by the companies.

In their complaint, EchoStar and NagraStar allege NDS cracked their access card technology, and extracted proprietary codes from within the system. What's more, NDS personnel then designed and built a pirating device that was capable of reprogramming those access cards, stated the litigation. Those devices were then allegedly distributed to the pirating community, the lawsuit said.

Radio Stations Take Aim at XM/Sirius Merger

As the Federal Communications Commission continues its consideration of the pending merger between XM and Sirius, traditional radio outlets came out in force at the Portals with their concerns about the deal.

Radio conglomerate Clear Channel Communications proposed a set of conditions for the transaction in a filing the company sent to the FCC earlier this week. Among the proposals from Clear Channel was a requirement that a merged XM/Sirius entity be subject to the commission's broadcast decency rules.

Traditional radio faces a threat of losing advertising revenue if satellite radio siphons "edgy" content for its services, the company said. "That potential harm is mitigated if broadcast decency rules were to apply to the merged entity," Clear Channel told the FCC, adding that there is "no constitutional bar" for such a condition.

In addition, Clear Channel suggested that a merged satellite radio company should be required to lease satellite capacity to a third party that controls programming delivered via the leased channels. And the company said a combined XM/Sirius should set aside 5 percent of capacity for public interest programming.

Also, Clear Channel said a merged company should face requirements to integrate HD radio reception capability into all satellite radio receivers. "Absent such a condition, the merged XM-Sirius will have the incentive and capability, through its dominant market position, to engage in anti-competitive behavior by locking up exclusive agreements with automobile manufacturers, thereby impeding dramatically the growth of HD radio," the company said.

Along with Clear Channel, radio station owner Entercom approached FCC officials during the week about the merger. The company said it told agency staff that a combined XM/Sirius entity would have anti-competitive impacts, especially on the radio broadcast business.

DIRECTV has added another notch in its high-def belt as the premiere official sponsor of the IndyCar Series.

The company said that beginning with Sunday's Honda Indy Grand Prix of St. Petersburg, all IndyCar Series events will be carried by the DBS service in HD.

And as the Premiere Official Sponsor for the IndyCar Series, DIRECTV said it will be recognized in the series logo along with its efforts to carry each event in high-def. DIRECTV also said it will receive branding placements throughout each IndyCar Series race, including in-car camera mounts, placement on all driver uniforms and cars, and branding throughout pit road.

Last week, representatives from XM and Sirius met with officials at the Federal Communications Commission, including FCC Chairman Kevin Martin, about their pending merger.

According to a filing describing the meetings, items discussed at the Portals included last week's decision by the Justice Department to clear the merger and a request from the companies that the commission quickly approve the transaction. The companies also outlined what possible programming packages, including a la carte offerings, could look like after a combination of the satellite radio companies.

Both XM and Sirius endorsed the a la carte concept early in their merger efforts. According to the companies' FCC filing, the a la carte proposals included an offering of 50 channels from one satellite radio platform, as picked by a customer, that would start at a price point of $6.99. A customer can add a channel for 25 cents, or add a premium offering for $5 under the ideas floated by the companies last week.

A second a la carte package proposal with 100 channels, again selected by the customer, would sell for $12.95, and could include a mix of channels from the two respective services under a "best of" scenario, stated the filing.

There also are separate "Sirius Everything" and "XM Everything" packages listed in the FCC filing with channels from the respective services. The everything packages could sell for $12.95 for each service, and would offer 130 channels from Sirius or 170 audio streams from XM, stated the filing.

The packaging proposals outlined by the companies also included family-friendly, music-centric, and news, sports and talk offerings.

Meanwhile, the Media Access Project approached the FCC last week about the merger, suggesting the deal could be harmful to the public interest. Nonetheless, the advocacy group said if the agency approves the transaction, conditions should be attached, such as a set-aside mandate for non-commercial educational programming or a requirement that a combined satellite radio company lease capacity to unaffiliated commercial programmers.

TECHNOLOGY - Globalstar said Open Range Communications secured approval for a $267 million broadband loan from the Department of Agriculture's Rural Utilities Program. In late 2007 Globalstar signed an agreement with Open Range permitting the company to deploy wireless broadband service in rural areas using its Ancillary Terrestrial Component (ATC) authority. Open Range also won $95 million in equity financing. RBC Daniels served as financial advisor to Open Range in its arrangement of the equity funding commitment and its formation of certain partner relationships.

TECHNOLOGY - ORBCOMM, a global satellite data communications company, received a modified space station authorization from the Federal Communications Commission, a move that effectively gives it the necessary regulatory approval for its next-generation low earth orbit satellite constellation plan. The company also said the FCC granted its request to renew its space station license for an additional 15 years, providing for an extension to 2025.