- - - Interactive TV To Generate Billions - - -

Observers predict that interactive TV and other enhanced television products will generate billions of dollars in advertising and commerce over the next five years.

And helping to make those gains will be DBS.

In research presented in September's SkyREPORT publication, Paul Kagan Associates predicts that interactive and enhanced TV services will generate nearly $1 billion in revenues by 2002 and reach more than 5 million households. Forrester Research forecasts that in five years TV-based web browsing will generate $11 billion in advertising and billions of dollars in commerce.

The nation's two DBS providers have entered the interactive TV game, forming partnerships with top services and beginning the roll-out of new set-top boxes.

DirecTV has deals in place with America Online and AOL TV, personal television service TiVo and Wink Communications. EchoStar has WebTV and OpenTV in its corner. Sometime this fall, EchoStar's DISHPlayer will offer personal TV services.

Meanwhile, Pioneer Consulting forecasted Wednesday that total global broadband satellite revenues will increase from around $200 million in 1999 to $37 billion in 2008. The firm's latest report, "Next Generation Broadband Satellite Networks," said residential service will represent the majority of revenue gains, accounting for almost $22 billion of revenues in 2008.

For more information on the SkyREPORT publication, send e-mail to skyreport@mediabiz.com or call 303-271-9960. For more on the Pioneer report, call 617-441-3900.

- - - Motorola Gets GI For $11 Billion - - -

Communications giant Motorola will buy General Instrument in a stock deal valued at about $11 billion.

The merger will allow both companies to take advantage of their existing technologies in the booming broadband business. General Instrument is big on cable-based technology. Motorola is known for its wireless communications products.

Under the deal, each share in General Instrument would be exchanged for a little more than half a Motorola share.

Ed Breen, chairman and chief executive of General Instrument, will lead a new Motorola unit focused on integrated and interactive broadband access. Liberty Media Group, which owns 21 percent of General Instrument and is its largest shareholder, agreed to back the merger.

- - - Pegasus Grows Call Center Capacity - - -

Pegasus Communications completed two deals in an effort to grow its DirecTV business with the National Rural Telecommunications Cooperative.

Under the first deal, Pegasus entered into a multi-year agreement with Dallas-based Alliance Data Systems to provide customer management services. The contract will double Pegasus' existing call center capacity. Alliance's Dallas call center previously provided services for U.S. Satellite Broadcasting.

Under the second deal, Pegasus contracted Decisionmark, based in Cedar Rapids, Iowa, to implement a comprehensive Satellite Home Viewer Act (SHVA)-compliance solution for its satellite subsidiary. Decisionmark's Internet-based technology will allow Pegasus to determine at the point of sale if customers are eligible to receive broadcast programming via satellite under current SHVA rules.

Pegasus provides DirecTV services to more than 600,000 subscribers through NRTC affiliates.

- - - FCC Approves Lockheed/COMSAT Deal - - -

Lockheed Martin took a step closer to becoming a serious player in the commercial satellite business after winning Federal Communications Commission approval for its purchase of COMSAT.

Under the two-part deal, the traditional defense contractor will buy 49 percent of the satellite communications service provider.

The 4-0 FCC vote helps Lockheed's long-term effort to eventually acquire all of COMSAT. The company still needs approval from the Justice Department and an act of Congress to amend a 1962 law barring a takeover of the satellite entity.

Commissioner Harold Furchgott-Roth abstained from the Lockheed/COMSAT vote.

The FCC also voted 5-0 to strip COMSAT of its exclusive right to sell U.S. access to the Intelsat satellite fleet.

- - - Get Ready For SkyFORUM - - -

It's SkyFORUM today and among the key happenings to look for:

Some fallout on panels as deals continue hot and heavy and quiet periods pop up all over; announcements on a new local TV strategy from DirecTV; more local talk from the NRTC; hot sessions on MDU developments; and the usual bag of surprises from Charlie Ergen. (If you've ever listened to Ergen, you know that "usual surprises" is not necessarily an oxymoron.)

The event is happening at the Marriott Marquis in Times Square and all the industry movers and shakers will be in attendance. (Except, we hope, Floyd which, at last check was weakening and not expected to hit New York (with non-hurricane force) until Friday.

- - - INTERNATIONAL: - - -

• Canal Silent About Time Warner Stake -
  French pay television group Canal Plus declined comment Tuesday on a report in daily newspaper Le Monde that Canal and Time Warner ere discussing a buy-out of Time Warner's 10 percent stake in CanalSatellite. Tuesday's Le Monde quoted a source at Canal Plus saying that Time Warner was questioning keeping its stake now that the satellite TV operator, which is 90 percent controlled by Canal Plus and its main shareholder, Vivendi.
• Thomson, OpenTV Score French Deal -
  OpenTV and Thomson Multimedia partnered with French digital television provider TPS for the development of a digital personal recorder. The system could provide near-video-on-demand and allow viewers the ability to pause, rewind and resume a live television event. In the United States, OpenTV has an interactive product with EchoStar. Thomson manufacturers set-top boxes for DirecTV in the United States and Latin America.

• European Publisher Selects Loral Solution -
  The German language newspaper Neue Zuercher Zeitung has chosen Loral Orion to expand and upgrade its internal data network. Loral will provide a two megabit-per-second switching bandwidth service, called Dynalink, which will allow for rapid worldwide distribution of the news.

• North America Gets Italian Music Videos -
  As part of a recently-announced deal, Video Italia, a 24-hour, digital, Italian music video channel, will be delivered to North America via satellite by the Connecticut-based company ITALTV.

• Canal Selects California Company -
  DiviCom, a provider of open solutions for digital television, has announced that its technology has been selected by CanalSatellite, a French DBS provider, to deliver high quality television signals. Canal selected the Media View MV40 Program Encoder to maximize their digital bandwidth.

• Scientific-Atlanta To Install Italian Terminals -
  Scientific-Atlanta announced Wednesday that it recently signed a contract with Telespazio SpA, a Telecom Italia Group company, to develop, manufacture, and install the satellite ground terminals that form a major portion of the ground infrastructure network for a new global satellite system, Astrolink.