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Sat-ND, 15.7.97




Sat-ND 97-07-15
Strange And Terrifying New Developments


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Copyright 1997 by Peter C. Klanowski
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TODAY'S HEADLINES

BUSINESS
DMX Under TCI's Roof
Hughes Electronics: Profits up, Tax Break
Bad Times for Satellite Equipment Manufacturers
LAW & ORDER
Taiwan: Satellite Liberalisation With Problems
DIGITAL
Antenna I
Antenna II
ONLINE
Net-Pre-Channel
RUPERTWATCH
EchoStar: "Litigation ... for many years"?
PrimeStar, EchoStar Visit Washington

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BUSINESS
DMX Under TCI's Roof
Maybe here's one of the reasons why DMX Europe had to file for bankruptcy -- apart from the fact that the service obviously did not attract sufficient subscribers.
When DMX Inc and U.S. cable giant TCI agreed last February that DMX would become a unit of TCI Music, the deal did not include DMX Europe. However, DMX and TCI Music have now completed their merger after DMX shareholders approved at a special meeting. DMX will exchange its common shares for TCI Music series A common shares.

Hughes Electronics: Profits up, Tax Break
Hughes Electronics Corp. said Tuesday profits jumped 77 percent in the second quarter. There are even more good news: the planned spin-off of its defence business will be tax-free.
Hughes said net income rose to US$541.4 million in the quarter from $US306.6 million. Sales rose 18 percent to U$4.76 billion from U$4.05 billion. Results for the latest quarter include a gain of U$318 million from Hughes' acquisition of 71 percent of PanAmSat Corp in May. Operating profits (excluding gains and adjustments) were US$339.1 million, down from US$450.4 million in the 1996 quarter.
Separately, General Motors (GM) said it received a ruling from the Internal Revenue Service that GM's planned spin-off of Hughes' defence operations would be tax-free to GM and its stockholders. Without the ruling, GM would have faced a massive capital gains tax bill that could have endangered the transaction.
GM announced last January it would spin off Hughes' defence operations to GM and Hughes stockholders and then sell the business to Raytheon Co. in a deal worth US$9.5 billion.

Bad Times for Satellite Equipment Manufacturers
All International Datacasting Corp (IDC) really wants is to unveil a new, powerful satellite receiver next autumn. The Canadian satellite equipment maker was hoping to be taken over by Calian Technology Ltd, but Calian three weeks ago decided not to do so.
A rescue plans now calls for ASCII Corp to sell its 45 percent equity stake in IDC to a coalition of IDC employees and managers. The management group will in addition buy the 27 percent stake held by Toronto-based Shieldings Inc., which is in receivership.
Capital Alliance Ventures Inc. of Ottawa has agreed to buy C$1.25 million worth of convertible debentures. Another C$250,000 worth of similar debentures will be bought by the management group. As a result, the management group will hold 21 percent of the company while Venture Capital Alliance will hold 49 percent. Other investors include Toronto-based Camdev Corp. and a number of Japanese companies.

LAW & ORDER
Taiwan: Satellite Liberalisation With Problems
According to Taiwan's 'Commercial Times,' the Directorate General of Telecommunications in a report has specified a timetable for the liberalisation of Taiwan's satellite telecommunications industry.
The directorate proposed in a report that leasing satellite capacity for radio and TV should be liberalised as from next August, but operations of satellite-based mobile and satellite fixed telecommunications should start no sooner than December 1999. A license-planning task force comprising representatives from Taiwan's manufacturing sector was commissioned to set up details to liberalise satellite mobile and fixed telecommunications.
According to Wang Pi-lien, head of the directorate's Composite Planning Department, one of the main problems is the regulation of connections between mobile satellite telecommunications and the public-switched telephone network..

DIGITAL
Antenna I
First DirecTV made the 'pizza-size' television satellite dish a common sight on homes across America. Shortly thereafter, Hughes Network Systems (HNS) introduced DirecPC, the award-winning, satellite-based system that provides Turbo Internet service. However, consumers still had to purchase separate satellite dishes if they wished to receive both services. That is, until now.
What's that then? Sounds like a press release simply because it is one, but it's also proof that the direct-to-home TV market is a bit strange. DirecTV and DirecPC both are offered by Hughes, but up until now U.S. viewers had to buy two antennas to receive them. A new dish called DirecDuo is going to put an end to that.
For Hughes, the biggest challenge in developing the dish was designing a stationary antenna, which by the way is 53 centimetres in diameter, capable of receiving signals from two separate satellites -- those used for DirecPC and those employed by DirecTV and USSB. [That's what the press release says. To my knowledge, all of Hughes' DBS satellites are pretty close together.] To accomplish this, HNS engineers packed two LNBs inside the housing at the end of the antenna's "arm." What a challenge indeed! Whatever it is -- a dual-feed dish, a twin LNB or a quad LNB, all these combinations have been sold in Europe for years.
Brave New Multimedia World, as described by Paul Gaske, senior vice president for Broadcast Products and Services at HNS: "One dish really does do it all -- a daughter does research for a homework assignment on the Web while Mom and Dad enjoy a top hit movie on DirecTV or USSB. Meanwhile, their son is watching the NBA playoffs in digital clarity with his buddies in the den. And all of this comes into the home through a single, discreet satellite dish."

Antenna II
Even more U.S. antenna miracles. Antennas America, Inc. announced today that it has been licensed by DirecTV to use the DSS trademark on the company's new "Freedom" antenna system.
U.S. federal law prohibits subscribers to satellite services from receiving local channels or other network programming if those networks are available using a VHF/UHF antenna. The Freedom antenna system has been developed to enable satellite service subscribers to receive local channels utilising a flat VHF/UHF terrestrial antenna that can be fitted to the back of almost any 45-cm satellite dish used for digital TV reception.
The omnidirectional antenna "usually" receives terrestrial stations from every direction within a range of 40 kilometres. An amplifier (not included) can be used for longer range applications. Using a proprietary cable tuning assembly attached to the antenna, it can be positioned during the installation process by adjusting the cable to tune out ghosting or to tune in other TV channels located at different transmitter sites. [Did you get that last sentence? I didn't.]

ONLINE
Net-Pre-Channel
Yesterday's article on NetChannel contained some slight exaggerations. The service hasn't really been launched in the UK -- according to a press release, what is offered right now is "pre-channel access." Whatever that may be.
The UK based subsidiary of American company NetChannel Inc. is to roll out NetChannel on October 1, 1997 nation-wide. It will offer subscribers "a full TV Internet service" via an existing domestic TV and a standard telephone line. The Channel can be accessed via set top boxes which can be controlled by an infra-red handset or mini keyboard. The first of them, supplied by Cambridge-based NetProducts Limited, are on sale at around 300 in London and the South-East.
"NetChannel will change the way that existing viewers can use their domestic television sets," said Peter Boreland, Managing Director of NetChannel Europe. "Research shows that our channel concept will be a great success." [As sure as 2 + 2 give 5.]

RUPERTWATCH
by Dr Sarmaz

EchoStar: "Litigation ... for many years"?
The lawsuit that EchoStar Communications has filed against Rupert Murdoch's News Corp may involve some cable companies as well.
Following the breakdown of the proposed DBS deal with EchoStar, News Corp sold its satellite TV assets to PrimeStar. EchoStar wants US$5 billion in damages while News Corp has filed a countersuit.
According to recent court filings, the case may also involve the backers of Primestar. TCI, Time Warner and others had to deliver documents. It is yet unclear whether they will formally be named defendants by EchoStar.
Besides that, EchoStar told its investors that it was confident of prevailing against News Corp. but warned that the lawsuit(s) "could continue for many years."

PrimeStar, EchoStar Visit Washington
Meanwhile, there's also been some action in Washington, D.C. concerning News Corp's PrimeStar deal. Primestar chairman and CEO Jim Gray met key lawmakers last week -- but so did EchoStar chairman and CEO Charlie Ergen.
Owing to the "private" nature of those meetings, not much is known about what was being discussed, but you don't need too much imagination. "We're chatting with a few people," Gray said. "We know we have to explain the transaction to a lot of people."
The "transaction," by the way, means that News Corp would sell its prime orbital slot, two high-power satellites and related DBS assets to Primestar for US$1.1 billion in nonvoting securities.
The main problem is likely to be programming concentration and access. EchoStar's Charlie Ergen argued that the merger was anti-competitive as it would combine Mr Murdoch's vast broadcast, film and other programming resources with Primestar's five major cable operator backers.
The regulatory process, which will probably involve the Federal Communications Commission, the Federal Trade Commission and the U.S. Department of Justice, is expected to last up to half a year. PrimeStar's Gray said he expects the deal to win approval by November or December.
He added that "it's primarily a Primestar issue," meaning that News Corp. won't be involved in the lobbying effort. Not a complete surprise as Mr Murdoch himself failed to get lawmakers' support for his plans to broadcast local programming on direct-to-home satellites.

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Copyright 1997 by Peter C. Klanowski, pck@LyNet.De. All rights reserved.
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