Sat-ND, 2.6.97

Sat-ND 97-06-02 - Nothing Except for the Truth

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Lockheed Martin's Space & Strategic Missiles Sector and the International
Organisation of Space Communications Intersputnik announced the formation
of a billion-dollar joint venture company to provide world-wide
communications services. The new company, Lockheed Martin Intersputnik,
Ltd., or LMI, will be headquartered in London with a marketing office in
LMI will draw upon the expertise and capabilities of both companies to
provide a full range of world-class satellite products and services, both
companies said in a press release. The substantial experience of
Intersputnik as a global satellite service provider will be combined with
Lockheed Martin's extensive satellite, launch and ground systems
capabilities. The first satellite deployed will be Lockheed Martin's A2100
on a Proton launch vehicle in late l998. Positioned over the Ural
Mountains*, it will let Lockheed Martin Intersputnik provide
telecommunications services throughout Eastern Europe, the former Soviet
Union and into Asia.. This venture will expand to a global service provider
that, according to the press release, will generate between US$300-500
million in annual revenues by 2001 when four satellites will have been
launched (one in 1999, two in 2000.) News agencies quoted Brian Dailey,
Lockheed's vice president for strategic development, as saying that 15
satellites could be launched, generating annual revenues of more than
US$1.5 billion within five or ten years. "There is high growth out there
and not enough satisfaction of that demand." So, it seems a bit unclear how
many satellites will actually be launched -- the LMI partner will probably
want to wait and see.
Initially, LMI will provide broadcast, fixed telecommunications and Very
Small Aperture Terminal (VSAT) services to customers in Eastern Europe,
South Asia, Africa and the Commonwealth of Independent States. These
services will expand to include direct-to-home video and audio, and mobile
services to customers world-wide.
According to industry sources, Lockheed Martin will hold about two thirds
of the LMI joint venture. The deal is regarded to create a win-win
situation: Lockheed will strengthen its position in a market that grows 15
percent per year whilst Intersputnik will gain access to state-of-the-art
technology. And cash, too: a planned Intersputnik venture with France's
Aerospatiale reportedly broke down due to a lack of financing from the
French. Intersputnik officials acknowledged that Lockheed Martin was able
to clinch the deal by paying cash down. Neither side commented on the
amount, though. Analysts estimate the deal, which might give the new
company access to up to 80 percent of Intersputnik's current market, at
US$1.5 billion
Intersputnik is an international intergovernmental organisation which
operates a satellite communication system and provides international,
regional and domestic communications around the world. Even its own
officials, such as deputy director general Istvan Kovach, admit that
Intersputnik operates an ageing fleet of Russian satellites. Lockheed
Martin's Space & Strategic Missiles Sector designs, develops, manufactures
and supports a variety of advanced technology systems for domestic and
international military, classified, civil and commercial markets. 
* If I remember it correctly, the Ural Mountains are regarded as the border
between the European and the Asian part of Russia. I may be completely
wrong as usual, though.


Distribuidora de Television Digital S.A. ("DTS"), a subsidiary of Spain's
Telefonica group of companies, has selected EchoStar to supply digital set
top boxes for their upcoming satellite television service scheduled to
launch this September throughout Spain. 
In addition, EchoStar will license its proprietary electronic programming
guide for use in connection with the digital receivers for DTS. With an
initial order for 1997 of 100,000 digital set top boxes, the total value of
the transaction is over US$40 million. 
After extensive review of the EchoStar's technology platform and its U.S.
facilities, DTS chose to implement the same Nagra-Kudelski /DiviCom Inc.
combination used by EchoStar for the DTS conditional access and compression
DTS plans to offer programming using a mini satellite dish and EchoStar's
digital satellite receiver. Using the HISPASAT satellite, DTS will offer a
wide array of video, audio and pay-per-view movies and events. 
Previously, ExpressVu acquired EchoStar's direct-to-home (DTH) satellite
technology and will begin offering television service to all regions of
Canada in the summer of 1997. As part of that agreement, EchoStar is acting
as the prime contractor in the planning, construction and integration of
ExpressVu's satellite uplink facility near Toronto. The first phase of this
project includes an initial order of 62,000 digital set top boxes and
primary uplink integration payments which combined exceed US$40 million. 
EchoStar III, a Lockheed Martin AX2100 satellite, is scheduled to launch
from Cape Canaveral, Florida on an Atlas IIAS launch vehicle in September
of 1997. The satellite will include programming complimentary to that
offered by the DISH Network, the company's DBS system, on EchoStar I and
EchoStar II. The programming line-up could also include Internet delivery
applications, and retransmission of local channels to select large markets,
EchoStar said in a press release. 
[It could. Geez! What a precise statement. Others could have become
millionaires if they had taken up a career as sperm donors early. A report
on the local radio said today that they were paid DM120 (US$70) per, uh,
delivery. So much about would and could statements.]


Charging that the television networks and their affiliates have conspired
illegally to stifle competition from the satellite broadcast industry,
PrimeTime 24 filed suit in the United States District Court against NBC,
ABC, CBS, FOX, the National Association of Broadcasters, and several
affiliates and network affiliate groups. 
PrimeTime 24, the nation's largest provider of network programming to
satellite home viewers, filed the antitrust action in response to what it
views as a concerted attempt by the networks, affiliates and their trade
organisations to destroy it as a competitor. 
According to Sid Amira, chairman and CEO of PrimeTime 24, "satellite
technology [...] poses a growing threat to the broadcast-cable
establishment. Over 6 million consumers have already switched to satellite.
In order to undercut the advantages of satellite, the networks and their
affiliates colluded to limit the access of satellite viewers to network
Amira said the suit was filed because the defendants conspired to drive up
PrimeTime 24's cost of doing business by indiscriminately challenging the
eligibility of massive numbers of its subscribers and orchestrating those
sham challenges so as to disrupt PrimeTime 24's business operations. 
The PrimeTime 24 suit also alleges that the networks and their affiliates
and their trade organisations organised an illegal group boycott of
PrimeTime 24 and refused to negotiate an agreement for the transmission of
network programming to consumers. Earlier this year, the networks and their
affiliates rejected outright PrimeTime 24's offer of payment to transmit
network programming to the satellite audience, and refused to deal with
PrimeTime 24. 
"Our offer would have enabled consumers who so desired to receive their
favourite network programming over satellite," said Amira. "Clearly, the
result of their refusing even to discuss our proposal was to deprive
thousands of consumers access to network programming and to deny the direct
broadcast satellite industry a level playing field on which to compete." 
According to the Complaint filed by PrimeTime 24, the defendants "illegally
misused their market power to insulate themselves from the new competition
(in the form of ... better quality signals, an increase in the number of
channels, and an increase in the variety of programming) that would be
posed by the widespread entry of direct-to-home satellite programming into
the market." 


[Thanks to Hans Engström, here are some news from Sweden. Thank you very
much, and I just wish there were more readers like you <g>]

During the summer the Swedish public service company Sveriges Television,
SVT, will start marketing its first pay-TV channel. It is called SVT Europe
and will target Swedes abroad.
It is under discussion whether the public service company, financed by
licenses fees, should have the right to establish pay TV channels. The
governing socialist party is in favour of the idea while the opposition
liberal and conservative parties do not agree. As most parties support an
SVT channel for Swedes abroad, SVT can create a precedent for pay-TV by
demanding the channel be financed by its viewers.
The channel will be broadcast digitally, probably from 13 deg. East or 5
deg. East.

On June 10, TV1000 Cinema will change its frequency. The new position on
the dial is 11.888 Ghz at 1 deg. west. The change is due to make room for
SciFi-channel that lost its transponder on TV SAT at the same location a
month ago. SciFi will share the transponder with TV1000 Cinema. 


* DirecTV announced it has launched in Gutaemala. This service, the first
direct-to-home digital entertainment option to reach Latin America and the
Caribbean, will offer for the first time tiered programming options,
pay-per-view services and more than 30 music channels with exceptional
CD-quality sound, the company said. [But please don't believe that "CD
quality" bit, it's not true. Digitally compressed transmission cannot, by
law of nature, offer true and full CD quality.] 

* Another U.S. unit of Canadian Tee-Comm Electronics has filed for Chapter
11 protection. Tee-Comm Distribution Inc, a distributor of satellite TV
receiving equipment, listed assets of US$10.0 million and liabilities of
approximately US$105 million. Last Tuesday, the AlphaStar Television
Network filed for Chapter 11 protection in the same court. Earlier in May,
Tee-Comm Electronics was placed in receivership by its banker, Bank of
Montreal. Tee- Comm is a Milton, Ontario-based satellite television company
with 50,000 subscribers in the U.S. and 6000 in Canada.

* Grupo Televisa announced that Conexion Financiera, the world's first
24-hour Spanish language business news network, has signed an agreement
with CNBC, NBC's wholly owned 24-hour cable network, to license programming
and lease production facilities. The agreement, which provides Conexion
Financiera studio and office facilities at CNBC, will also allow Conexion
Financiera's U.S. operations to run more efficiently. The agreement further
provides that Conexion Financiera will have excerpting rights to all video
content produced by CNBC Business News. Conexion Financiera is the world's
first 24-hour Spanish-language business news channel and is currently
offered to subscribers of SKY, the direct-to-home satellite programming
joint venture of Grupo Televisa, The News Corporation Limited, Organizacoes
Globo and Tele-Communications International, Inc. 

* Television and radio transmissions by the South African Broadcast
Corporation SABC to the 250 000 residents of Nelspruit, the capital of the
South African province Mpumalanga (Eastern Transvaal), were interrupted
last week after heavy snow in the area damaged satellite reception dishes. 
SABC's TV channels 1 and 3 and six other stations were knocked off air for
roughly two hours after the heavy snow fall buried the satellite dishes
under a blanket of snow. "Nelspruit usually has tropical weather so this
snow is unexpected," said transmission manager Calitz. 

by Dr Sarmaz

[The following is a press release that contains a load of legal
mumbo-jumbo. I don't have the time to re-write it, unfortunately. In
essence, it probably means that a joint venture of Australis and Optus
Vision was sacked by an Australian court. The proposed joint infrastructure
venture called for Australis to transfer its satellite infrastructure to
the joint venture with Optus Vision. What makes the whole thing suitable
for this column is, of course, that the lawsuit was filed by Foxtel, which
has a 25-year programming deal with Australis. Australis is one of three
major pay-TV operators in Australia. The others are Optus Vision, owned by
Australia's second biggest telecommunications company, and Foxtel, owned by
Rupert Murdoch's News Corp Ltd and state-owned telecommunications company
Telstra Corp.]
Australis Media Limited advises that the Supreme Court of New South Wales
delivered judgement in proceedings brought by The News Corporation Ltd,
Telstra Corporation Ltd and Foxtel against Australis and Optus Vision Pty
Ltd in respect of the Satellite Joint Venture Agreement between Australis
and Optus Vision entered into in August 1996. 
The Court held that the proposed implementation of the Satellite Joint
Venture Agreement would result in a breach of the term (which the Court
found to be implied in the Agreement) that Australis remain the operator
and in control of its system for the distribution of pay television
services. The Court has made orders restraining Australis from transferring
assets in implementation of the Satellite Joint Venture Agreement or
otherwise transferring control of its system for the distribution of pay
television services by satellite and MDS. 
Australis is considering the Court's judgement including whether it will
lodge an appeal from the Court's decision. 

Copyright (c) 1997 by Peter C. Klanowski, pck@LyNet.De. All rights

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