A FEW DBS BASICS

The projected growth of the Direct Broadcast Satellite (DBS) industry in the near future is expected to be fairly substantial. From an existing customer base in 1996 of approximately 5.3-5.7 million subscribers, some prognosticators estimate a customer base of 15-18 million subscribers by the year 2000. This would represent about 15% to 20% of the families with television in the year 2000.

DBS systems are proprietary digital satellite television delivery systems which currently offer a variety of programming most of which is similar to that offered by cable television systems. The major DBS players in the United States and Canada include:

1. DirecTV, owned by Hughes Communications of Los Angeles with a 3% interest being held by AT&T. DirecTV operates three satellites in geosynchronous earth orbit; DBS-1 located at 101.2 deg West, and DBS-2 and DBS-3 located at 100.8 deg West. Each of these satellites has 16 ku-band transponders with a TWTA power rating of 120 Watts (DBS-3, a backup satellite, has eight 60 Watt and eight 120 Watt transponders). DirecTV estimates that it currently has about1.2 million subscribers.

2. United States Satellite Broadcasting (USSB) is owned by Hubbard Broadcasting of Minneapolis. USSB currently occupies space on the Hughes DBS satellites and has a share of the DirecTV subscriber base. DirecTV and USSB do not offer the same programming and can be received on the same equipment.

3. PrimeStar is owned by five of the major US cable companies, principal among them being TCI of Denver and Time-Warner. Primestar does not at present own DBS space segment but leases transponders on GE Americom Satcom K1 located at 85 deg West. This is an aging piece of equipment which was launched on the space shuttle in 1986. PrimeStar attempted to acquire the FCC permit to occupy a GEO slot located at 110 deg West. The permit was originally issued to Advanced Communications but was cancelled by the FCC due to lack of activity. MCI sub-sequently purchased this permit at 110 deg West at auction for $682.5 million. In light of these developments, PrimeStar plans to lease space on the new GE Americom GE-2 satellite which will replace Satcom K1 at 85 deg West in early 1997 and allow PrimeStar to offer 140 channels. PrimeStar claims about 1 million subscribers.

4. The DISH Network, owned by EchoStar Communications Corporation is headquartered in Englewood, Colorado. DISH began its DBS operations in March, 1996, providing video services from ECHOSTAR I, located at 119 deg West. This satellite contains sixteen 130 Watt transponders. The system uses an MPEG II/DVB international standard for its broadcasts. A second satellite, ECHOSTAR II, was successfully launched in September and is also located at 119 deg West. This satellite will begin operations on the first of November. In addition to the channel frequencies which DISH owns on ECHOSTAR I, the corporation has acquired other channel frequencies through FCC auction and negotiations with DirectSat and Direct Broadcast Satellite Corporation (DBSC). These other channel frequencies are situated on satellites or in orbital slots located as far west as 175 deg West and as far east as 61.5 deg West. These channel frequencies would allow EchoStar Communications to provide DBS domestic and international service to approximately 2/3 of the globe.

5. The AlphaStar Television Network of Greenwitch, Connecticut is a Canadian based partnership. This network also began operations in 1996. AlhpaStar currently leases transponders on TELSTAR 402R. These channel frequencies will be moved to TELSTAR 5 in 1997, assuming a successful launch for that satellite.

6. MCI and News Corp.(owned by Rupert Murdock) will enter the DBS arena in late 1997 with the launch of a 32 transponder satellite into the 110 deg West orbital slot. The FCC permit to operate an initial 28 channel frequencies was purchased at auction for $682.5 million. Each of the transponders on the first MCI satellite will be powered at 110 Watts . A second satellite with thirty-two 120 Watt transponders will be launched into the 110 deg orbital slot in mid-1998. A brief review of the program offerings of these DBS service providers indicates considerable redundancy in programming. For example, HBO, CNN, Cinemax and many others appear on most or all the DBS systems. Programming is dominated by cable network material such as HBO, Court TV, TNT, ESPN and C-Span in addition to a considerable number of movie and sports choices. The high-powered DBS services (DirecTV and DISH) also offer digital audio.

   DBS service in the United States is currently provided from either high-powered or medium-powered satellites. DirecTV, USSB and DISH (EchoStar) operate from high-power satellites providing services in the BSS (Broadcast Satellite Service) segment of Ku-band spectrum. Transmissions from these satellites may be received on very small diameter dish antenna of around 18" or less. The RCA pizza sized dish (DirecTV) is an example of this DSS (Digital Satellite System) receive equipment.

   PrimeStar and AlphaStar operate from medium-powered satellites providing services in the FSS (Fixed Satellite Service) segment of KU-band spectrum. FSS satellites are separated in orbit by only 2 deg. rather than the 9 deg. required of BSS satellite operating systems. The close proximity of FSS satellites to one another requires the use of larger receive antenna of 30" diameter or more.

   The proprietary nature of each of these DBS operations and the designed non-interoperability of the systems has generated animated discussion around the future directions which the DBS industry and technology should take. At present, choice is not a question of programming since its about the same, but instead one of equipment.