V1.13 December 15 1996
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FCC ADOPTS DTV STANDARD
The Federal Communications Commission has adopted a standard for
digital television (DTV). The standard is a modification of the Advanced
Television System Committee's (ATSC) DTV Standard first proposed for
adoption earlier last year. The standard adopted is consistent with a
consensus agreement voluntarily developed by a broad cross-section of
parties, including the broadcasting, equipment manufacturing and computer
industries. The standard allows transmission of one or two High Definition
Television programs; four, five or more Standard Definition Television
programs at a visual quality better than the current analogue signal; many
CD-quality audio signals; and the delivery of large amounts of data. The
standard does not include requirements with respect to scanning formats,
aspect ratios and lines of resolution.
The Commission concluded that adopting the DTV Standard will serve
the public interest and bring benefits to American consumers. Future
actions will decide various policy issues created by the introduction of
digital broadcast service and determine allotment and assignment of
channels to eligible parties.
On the heels of the Federal Communications Commission's adoption,
we have a number of reactions.
"The protracted regulatory phase is over; the marketplace phase can
now begin," said Richard S. Friedland, Chairman and CEO of General
Instrument, commenting on the FCC adoption of the digital broadcast
television standard. "We should take this opportunity to recognise the
accomplishments of the people who made the inventions, developed the
technology and spearheaded the process to bring digital TV to the consumer.
The folks from Lucent, MIT, Philips, Sarnoff, Thomson and Zenith, as well
as our own people from GI, are to be commended for the technological and
project management achievements that created this standard."
"The FCC decision will facilitate international acceptance of the
U.S. digital television standard, and that should be good for American
exports and jobs," said Robert M. Rast, Vice President of GI
Communications, and one of the leaders within the Grand Alliance. "Canada
and Mexico have already indicated their willingness to adopt the U.S.
standard once our FCC acted, and there is interest in South America and
Asia as well."
Thomson Consumer Electronics
By mandating the core DTV technologies, the FCC has provided the
private sector with the policy direction it needs to invest in an orderly
transition to digital television, with all its attendant benefits for U.S.
consumers. The coming 21st Century will certainly look better on
The announcement clears the way for Thomson to offer RCA-brand
digital HDTV all-format receivers, beginning in 1998. Pricing of the new
advanced digital receivers, representing a more deluxe category of TV
products, will carry higher prices than today's analogue models. We expect
digital television's particular benefit will be to popularise the use of
larger screen receivers in the home as sources of entertainment,
information and sports programs.
HDTV Grand Alliance
Final FCC approval of the Grand Alliance-based standard marks a
great victory, not only for our consortium but, more important, for
America's 100 million TV households. For consumers, digital HDTV will
deliver extremely clear, error-free images and CD-quality sound. This
exciting technology, the most computer-friendly TV broadcast standard ever
devised, will also enable a wide range of information-age applications,
because each TV channel will be able to carry 19 megabits per second of
data into the home.
The FCC's action means that the core elements of the standard will
be "mandated" (Dolby AC-3 audio, MPEG-2 compression techniques, the MPEG-2
packetized data transport structure, and the VSB digital modulation and
transmission system). In addition, we believe that the video formats
specified in the ATSC standard—though not mandated by the FCC—will be
adopted as a "de facto" standard by the nation's broadcasters.
Now that the DTV standard has been adopted, the Grand Alliance
urges the FCC to assign, as soon as possible, a digital television channel
to each broadcaster. This move—required by April 1, 1997, according to
direction from Congress—will mean that the transition to digital television
broadcasts can truly begin. This has been a long process, but this
historic announcement means that the United States has entered the digital
television age, and will lead the world toward delivering the benefits of
the technology for consumers.
Citizens for HDTV
"After ten years of research and co-operation among industry and
government, we now have a federal standard in place to guide the transition
to digital television. The standard will preserve our country's tradition
of free broadcast television for all consumers while allowing them to
choose their level of participation in the digital age.", said Citizens for
HDTV Chairman Peter Fannon.
"Now all consumers will have access to the myriad of benefits
provided by digital television, including America's world-leading High
Definition Television (HDTV) technology," added Fannon.
"America is one step closer to ushering in a new era in broadcast
communications. We urge the FCC to act quickly in 1997 to provide
broadcasters with digital channel allocations so they can begin the
long-awaited transition to digital television. It's showtime - finally."
Citizens for HDTV is a coalition of consumers, retailers, manufacturers,
labour and senior groups who support the rapid transition to HDTV in
"What a terrific way to usher in the new year," said Peter S.
Willmott, Zenith president and chief executive officer. "After almost a
decade of investment and research, FCC adoption of the standard finally
gives us the certainty we need to complete our HDTV product plans.
"We're particularly proud that the FCC has adopted Zenith's digital
transmission system as part of the standard. Zenith is looking forward to
entering the digital television age, which should be as significant to our
industry and our company as the change from black-and-white to colour TV."
Willmott said Zenith plans to introduce HDTV sets beginning in
1998, dovetailing with the expected start-up of commercial HDTV broadcasts.
The company holds a series of key DTV system patents and plans to license
its technology to television receiver and broadcast equipment manufacturers
when the transition to DTV broadcasts begins. The amount and timing of
royalty payments cannot be predicted at this time.
Zenith's digital modulation and transmission technology (known as
"vestigial sideband" or VSB) is the part of the DTV system that will
deliver digital television pictures and sound, as well as information
services, to millions of American homes.
Proven in extensive laboratory and field tests, Zenith's 8-VSB system is
rugged digital technology for terrestrial DTV broadcasting that assures a
broad HDTV coverage area, reduces interference with existing analogue
broadcasts and provides immunity from interference into the digital signal.
The higher-data-rate cable mode, 16-VSB, will allow operators to transmit
two full HDTV signals in a single 6 MHz cable channel.
Galaxy VIII-I to be Launched in September
Galaxy VIII-I, is scheduled to be launched in September 1997. This
satellite will allow DIRECTV to immediately provide up to 238 channels of
Galaxy VIII-I will provide DIRECTV with 32 additional transponders
for use in Mexico, Central, South America and the Caribbean. This compares
to 24 transponders in GLA's current satellite Galaxy III-R. In addition,
GLA announced it had negotiated an option to continue to simultaneously use
its transponders on Galaxy III-R after the launch of Galaxy VIII-I, which
will be subject to normal regulatory approvals. Therefore, the combined
transponders on both satellites will be able to beam up to 22 transponders
of programming and entertainment services to Mexico.
With the new satellite, DIRECTV will have available 102 channels
for video, 43 for pay-per-view movies and sports, and 27 others reserved.
Additionally, DIRECTV will also have the capability to broadcast 66 music
The Galaxy VIII-I satellite carries 32 transponders in Ku-band
using 118 watts travelling-wave tube amplifiers (TWTAs), almost twice the
power of Galaxy III-R. The 32 transponders will cover the Southern Cone,
with 16 carrying programming mostly in Portuguese. The other 16 will
service the Southern Cone and the rest of Latin America and the Caribbean
with programming mostly in Spanish. The satellite is a Hughes HS 601 HP
TCI Satellite Signs with Telesat Canada
TCI Satellite Entertainment, Inc. and Telesat Canada announced the
signing of a letter of intent regarding the sale of one of the Tempo
satellites to Telesat Canada.
Signing of a definitive asset purchase agreement is expected in early 1997,
and will be subject to legal and regulatory approvals. The satellite is
being sold at cost to Telesat, payable over time, and the two companies
have agreed that, under certain conditions, Tempo has the option to utilise
services provided by Telesat in the future.
The purchase of the satellite is subject to several conditions,
including the successful launch of an additional Tempo satellite into
Tempo's orbital slot at 119 (degrees) WL, as currently planned by TCI
Satellite Entertainment, and appropriate approvals from the Canadian
government regarding Telesat's plan to utilise Canadian frequencies for
Canada's First Digital DTH Television Service
Tee-Comm Electronics Inc. said that comprehensive testing of its
updated Canadian digital satellite earth station has now been successfully
The test results confirm that AlphaStar Canada can begin a digital
satellite broadcasting service in Canada, within thirty days of receiving a
go-ahead from the Canadian Radio-Television and Telecommunications
Commission. AlphaStar applied to the CRTC for a digital Direct-to-Home
(DTH) broadcast licence last year, and hopes to receive approval early in
AlphaStar Canada has transponder space on AT&T's 402R satellite.
Tee-Comm launched its AlphaStar U.S. programming service on the same
satellite in July last year.
``The U.S. operation shows that we have all the elements in place to
provide a first-class, 80-channel service to Canadians, almost
immediately,'' said Bahnman. ``We're the only Canadian company with
confirmed satellite space, a full inventory of set-top receivers, and now a
fully-operational digital earth station. We have a ready market to serve,
and we can't wait to get going.''
DMX European Subsidiaries
DMX Inc. board of directors have approved the disposition of its
two financially troubled European subsidiaries, DMX-Europe N.V. and DMX-
Europe (UK) Limited to Jerold Rubinstein, its Chairman and Chief Executive
DMX Inc. will retain a ten percent equity interest in the companies
which would have an exclusive, five-year, royalty-free license to use DMX's
music service in Europe, the former Soviet Union, and in the Middle East.
DMX Inc. had previously determined to cease financial support for its
European operations and, in the absence of some other arrangements to
provide financial support to those companies, to place them in
DMX also announced that it was negotiating the terms of a
definitive merger agreement with Tele-Communications, Inc. with respect to
TCI's previously announced proposal to acquire DMX. The Company said that
it anticipated that a definitive merger agreement would be reached within
the next 30 days. TCI has advised DMX that it was not interested in either
financing or other-wise continuing the operations of DMX's European
SES and ASkyB to carry DMX
Digital Music Express said that Sky Entertainment Services in Latin
America and American Sky Broadcasting (ASkyB) will have the right to carry
various channels of music taken from DMX's menu on all Sky platforms in the
This includes the United States, Mexico, all of Central and South America,
and parts of the Caribbean.
It will be decided which specific audio channels are to be included
in tailor-made menus for each individual market. These musical channels
will be selected from the approximately 100 music formats presently offered
Sky's channel line-up will include diverse formats such as Euro Hits,
Reggae, Japanese music, Latin Contemporary, Mariachi, Salsa, Opera, Rock en
Espanol, Movie Sound Tracks, Power Hits, New Age and Jazz Vocal Blends.
PanAmSat, Hughes announce post-merger management
PanAmSat Corporation and Hughes Communications, Inc. announced the
formation of an Office of the President for the new company being formed by
the merger of PanAmSat and the Galaxy operation of HCI. An agreement to
merge the two companies into a new publicly held company, to be called
PanAmSat Corporation, was announced in September 1996.
As previously announced, Frederick A. Landman, PanAmSat's current
president and CEO, will lead the new PanAmSat and hold the same titles.
The newly created Office of the President will be comprised of four
industry veterans who will provide Mr. Landman with strategic,
operational, technical and financial counsel and will direct various
aspects of the new PanAmSat's global operations.
The Office of the President will include Lourdes Saralegui, who
will serve as executive vice president and who currently holds the same
title with PanAmSat; Carl A. Brown, who will also serve as executive vice
president and currently is senior vice president, Galaxy Satellite
Services; Robert A. Bednarek, who will be chief technology officer and
currently is PanAmSat's senior vice president, engineering & operations;
and Kenneth N. Heintz, who will be executive vice president and chief
financial officer and currently is corporate vice president, corporate
development, Hughes Electronics Corporation.
Westinghouse/Infinity Merger Receives Approval
Following the Federal Communications Commission approval, Michael
H. Jordan, Chairman and Chief Executive Officer of Westinghouse Electric
Corporation, and Mel Karmazin, President and Chief Executive Officer of
Infinity Broadcasting Corporation, announced that the parties will now
proceed to close the merger of the two companies.
The merger creates the largest radio group in the world with
combined revenues of over $1 billion. Consisting of 79 radio stations in
17 markets, the group has 64 stations in the top 10 markets, including six
of the 10 highest billing stations in the United States.
By a unanimous vote, the FCC approved the transfer of licenses of the
Infinity radio stations to Westinghouse, the final step necessary to permit
the merger. This follows last month's approval by the Department of
Commenting on the government approvals, Mr. Jordan said, "We are
pleased the FCC has given approval to the CBS/Infinity combination under
the regulatory framework outlined in the Telecommunications Act passed in
February 1996. This change in the regulatory landscape has allowed
Westinghouse/CBS to bring together two of the highest performing radio
businesses in the industry as part of an integrated television, radio and
cable programming enterprise. The beneficiaries of the merger will be the
nation's viewers and listeners, our advertisers and our shareholders."
Personalised Media Communications Sues
Personalised Media Communications said that the U.S. International
Trade Commission (ITC) has commenced an investigation of DirecTV, Inc.,
United States Satellite Broadcasting, Co. (USSB), Thomson Consumer
Electronics, Inc., Hughes Network Systems, Hitachi Home Electronics, Inc.,
(America), Toshiba America Consumer Products, Inc. and Matsushita Electric
Corporation of America, for violation of section 337 of the Tariff Act of
1930, in the importation, sale for importation, and sale in the United
States after importation, of DSS receivers that infringe a U.S. patent
owned by PMC.
If the ITC supports PMC's claim, the Commission could issue a
permanent exclusion order banning importation into the U.S. of the accused
receivers and a cease and desist order directed to all five named DSS
manufacturers. In addition, the Commission could issue a permanent cease
and desist order to DirecTV and USSB to cease and desist from providing
signals to unlawfully imported receivers.
The ITC said it is undertaking this investigation based on a
complaint filed November 13, 1996, by PMC. The complaint states that the
five named Digital Satellite System (DSS) receiver manufacturers are
unlawfully importing into the United States DSS receivers that infringe one
of PMC's patents and that DirecTV and USSB are broadcasting Direct
Broadcast Signals (DBS) which aids in the infringement by the DSS receiver
manufacturers. PMC offered to license its patents to these companies but
they were unresponsive to the offer.
PMC also announced it filed a lawsuit charging patent infringement against
DirecTV, USSB and the five named DSS manufacturers in the United States
District Court for the Northern District California San Jose Division.
The PMC Patent No. 5,335,277 (the '277 patent), asserted in the ITC
investigation, covers new technology that allows end-users to customise the
processing of a broadcast signal to exert greater control over programming
content displayed on a television. This is achieved by the viewer
directing the transmission of broadcast communications signals, data and
processing instructions with private data resident in the user's personal
computer or receiver, thereby turning the broadcast signal into a
"personalised media" stream.
Antennas America, Inc. have introduced two flat conformal antennas
designed to provide the Off-Air solution for Direct Satellite Systems (DSS)
The FREEDOM Antenna System, is a flat UHF/VHF TV antenna that
conforms to the back of the satellite dish using the dish's existing
hardware. Designed to be inconspicuous, the FREEDOM antenna is an ideal
solution to the problem of local program reception with the popular 18"
Antennas America, Inc. has also introduced another conformal
antenna. The WALLDO Antenna System is a flat UHF/VHF TV antenna, measuring
15 ½" x 13" x 2". This antenna is designed so that it conceals the fact
that an outdoor antenna has been installed.
Using technology developed by Antennas America, both antennas are
omnidirectional and work in locations where a medium gain antenna is
required. The Company markets the antennas as the solution to the problem
of antenna installations on rooftops where there may be limitations due to
zoning codes, covenants, homeowner restrictions or where there is the need
for a more aesthetically pleasing solution.
AlphaStar Targets International Audience
AlphaStar added on December 31 the International Channel to its
program offerings. The channel delivers original news and entertainment
produced in more than 20 languages. AlphaStar will be the only U.S.
direct-to-home satellite service to carry the multilingual network.
The International Channel will be available to AlphaStar
subscribers initially at no charge. The channels programming from around
the world includes championship sports, showcase films, dramas, business
markets reports and entertainment. Special coverage includes events like
championship Italian Soccer, Martial Arts and World Cup Cricket, India's
parliamentary elections and Taiwan's presidential elections.
The launch of the International Channel is AlphaStar's third entree
into the world of multicultural programming. On U.S.Thanksgiving Day, the
company added the Asian Television Network to its three channels of Arabic
programming produced by the Egyptian Radio & Television Union in Cairo,
Gemstar and StarSight Announce Merger
Gemstar International Group Limited and StarSight Telecast Inc.
have entered into an agreement under which StarSight will become a
wholly-owned subsidiary of Gemstar.
Under the merger agreement, StarSight Telecast shareholders will receive
0.6062 shares of Gemstar common stock for each share of StarSight Telecast
common stock. StarSight Telecast shareholders will, in the aggregate,
receive approximately 33 percent of the outstanding shares of the combined
company. The transaction value is approximately $273 million based on a
stock price of $16.88. In addition, Gemstar has the option under certain
circumstances to purchase newly-issued shares of StarSight Telecast common
stock at an exercise price of $10.46 per share, equal to 15% of StarSight
Telecast shares on a fully diluted basis.
The transaction has the strong support of the boards of directors
and management of both companies. Voting agreements involving
approximately 52 percent of StarSight Telecast outstanding shares and 53
percent of Gemstar outstanding shares have been entered into by the
principal shareholders of each company. Closing of the transaction is
subject to customary conditions, including approval by shareholders of each
company and the satisfaction of regulatory requirements.
Gemstar and StarSight are currently in litigation over certain
intellectual property issues. The two companies have agreed to stay the
proceedings with the aim of dismissing all claims upon completion of the
NRTC Reaches 500,000 DIRECTV Subscribers
The National Rural Telecommunications Co-operative (NRTC) reached a
milestone this past week when its members and affiliates recorded their
500,000 DIRECTV subscriber.
NRTC established its strategic partnership with DIRECTV in 1992. Currently,
more than 250 rural utility systems and affiliated organisations provide
DIRECTV services to consumers in rural America.
NRTC is a national service co-operative founded in 1986 by the
nation's rural electric and rural telephone systems to provide affordable,
comprehensive telecommunications services to the 25 million consumers
living in rural areas of the United States. NRTC's nearly 800 members
currently provide satellite television programming (Rural TV to C-band
owners, and DIRECTV to DSS owners) to more than 570,000 rural families.
¨ Le Groupe Videotron ltee has closed the sale of its British subsidiary
that held a 56 percent indirect interest in Videotron Holdings Plc to Bell
Cablemedia Plc for a cash consideration of approximately CDN $825 million
(US. $607 million).
¨ A Lockheed Martin Atlas IIA rocket, designated AC-129, successfully
launched the third of the new-generation Inmarsat mobile communications
satellites into geosynchronous transfer orbit from Complex 36A at Cape
Canaveral Air Station (CCAS), Fla. Inmarsat-3 F3 follows the successful
launches of F1 and F2 aboard an Atlas from CCAS on April 3 and the Russian
Proton from Baikonur on September 6. It was the 27 consecutive successful
Atlas launch from CCAS and the seventh and final Atlas launch of 1996.
¨ Canal Plus and Fox have signed an exclusive strategic deal, under which
Canal Plus will have the exclusive right to show Fox films on its
CanalSatellite, digital TV bouquet, and its other channels. In the battle
for supremacy, TPS, rival digital service, has signed Paramount and MGM,
but Canal Plus has now signed the other five major studios, Fox, Warner,
MCA, Sony and Disney.
¨ Disney may launch a new channel, ABZ, aimed at pre-school children
starting in late 1997 or early 1998. Disney is looking to be on the air
before Nickelodeon's plans to change its Nick Jr programming block into a
¨ United Video Satellite Group, Inc. announced that UVSG's Board of
Directors has authorised management to pursue a potential spin off of
UVSG's 50% interest in Superstar/Netlink Group's retail satellite business
("Venture"). The potential spin off will be subject to the Company
obtaining a favourable private lettering ruling from the IRS in order to
accomplish the transaction on a tax free basis.
¨ Globosat started offering pay-per-view cable television services in
Brazil. The service, called SmarTV, will be offered by the NET operator to
all of its clients as of Feb./97. Globosat plans to increase the number of
channels offered from the initial 5 to 40 by May/97 due to the launch of
the PanAmSat PAS-6 satellite. It also plans to reduce the price of the
equipment that will be sold to its clients for them to receive the
satellite sign, or grant it for free if at all possible.
¨ Shareholders of Silver King Communications, Inc., Home Shopping Network,
Inc. and Savoy Pictures Entertainment, Inc. each voted to approve the
merger of the three companies. Additionally, shareholders of Silver King
voted to change the name of Silver King Communications, the surviving
entity, to HSN, Inc.
¨ Actress Stefanie Powers has signed on to be a host of ROMANCE CLASSICS,
the new 24-hour entertainment service devoted to romance. Powers will
introduce films airing in prime-time on the network, act as a spokesperson
and make appearances on behalf of the channel. ROMANCE CLASSICS is a
programming service of Rainbow Programming Holdings Inc. and is available
on G7-14 C-band
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