- - - DBS Attacks Cable/Broadcasters On Must-Carry - - -

DBS interests attacked moves initiated by cable and broadcast lobbying groups seeking to prevent the extension of must carry rules in pending satellite legislation.

National Cable Television Association President Robert Sachs said in an letter sent to House and Senate members last week that "it would cause great concern to our industry" if must carry mandates were reduced or delayed from taking effect Jan. 1, 2002. The Association of Local Television Stations also is lobbying lawmakers not to delay must-carry rules for satellite.

Must carry proposals and provisions governing the delivery of local stations via satellite are in pending DTH legislation being debated in a House/Senate Conference Committee.

In a letter sent to the committee's chairman, Utah Sen. Orrin Hatch, DirecTV President Eddy Hartenstein said strict must-carry rules would hinder the DBS provider's effort to deliver local stations to as many TV markets that its technology allows.

"It is a simple fact that the more television stations DirecTV is required to carry in the largest cities, such as New York and Los Angeles, each of which have more than 20 local broadcast stations, the fewer markets DirecTV will be able to serve with the limited spectrum it has been granted by the FCC," Hartenstein said.

He also criticized the cable organization's moves. "NCTA has an interest in seeing local-into-local service offered in as few markets as possible because cable operators know that a fully competitive DBS service is a real threat to their monopoly status," Hartenstein said.

EchoStar Chairman Charlie Ergen and Bob Phillips, president and CEO of the National Rural Telecommunications Cooperative, said must-carry mandates "must be re-examined."

In their joint letter to Hatch, the two said must-carry rules "are a disincentive to providing local service as they displace valuable bandwidth needed to provide local service in smaller markets."

- - - Sea Launch Ready For DirecTV Flight - - -

The green light is still on for the weekend launch of DirecTV's next satellite, DirecTV 1R.

The flight, which is the first commercial satellite launch from Sea Launch's floating platform in the Pacific Ocean, is scheduled to take place along the equator, 1,400 miles southeast of Hawaii.

The launch is scheduled for Sunday, Oct. 10, with a window opening at 7:28 p.m. Pacific Time.

Sea Launch Spokesman Terrance Scott said the Sunday date is only a target, but beautiful weather in the South Pacific is helping crews meet the projected timeline. The floating launch platform and command ship have been at sea for nearly two weeks.

Once it is operational at 101 degrees, DirecTV 1R will help the DBS giant expand its capacity and deliver local broadcast network channels for major metropolitan markets. DirecTV 1R also will strengthen the company's in-orbit redundancy.

- - - XM Satellite Shares Start Trading - - -

XM Satellite Radio began publicly trading shares Tuesday, with its new stock closing at $12.

CD Radio, its competitor in the emerging satellite-based DARS (Digital Audio Radio Service) business, closed the day at $25.63.

A subsidiary of Liberty Media Corp., the programming arm of AT&T Broadband and Internet Services, agreed to acquire 1 million shares of the XM offering.

Banc of America Securities' Armand Musey initiated coverage of XM Satellite with a buy rating. In his note, Musey pointed out that the company has strong backing from partners such as General Motors, DirecTV, Clear Channel Communications and American Mobile Satellite Corp.

He also said DARS has a large market potential. "The U.S. satellite radio (DARS) market should reach nearly 13.8 million subscribers and $1.26 billion in revenue by year-end 2004," he said. "XM Satellite Radio and CD Radio will be the only two competitors" taking advantage of that potential.

Musey put XM's year-end 2000 price target at $25.

- - - DISH Adds To Spanish-Language Fare - - -

EchoStar's DISH Network added Univision and Galavision to DISH Latino, its Spanish-language television and audio programming package.

DISH Latino now offers 20 channels of Spanish-language television and audio programming from Latin America and Spain. The package sells for $19.99 a month or $239.88 annually. DISH Network added Univision and Galavision at no additional cost for DISH Latino customers.

Univision is broadcast on DISH Network channel 270 and Galavision is broadcast on channel 272. DISH Network will continue to offer Univision and Galavision in its America's Top 100 programming package.

- - - Orbital Names Thompson President - - -

Orbital Sciences named James R. Thompson Jr. to the newly-established position of president and chief operating officer.

Previously, he served as executive vice president and general manager of Orbital's Launch Systems Group and as the company's chief technical officer from 1991 to 1993. Thompson also has been a member of the board of directors since joining the company eight years ago.

Before joining Orbital in 1991, Thompson was deputy administrator at NASA, where he served as the senior operations executive. From 1986 to 1989, he was director of NASA's Marshall Space Flight Center in Huntsville, Ala., and from 1983 to 1986, he served as deputy director for Princeton University's Plasma Physics Laboratory.

- - - COMPETITIVE WATCH: - - -

• Microsoft Co-Founder Backs Cable Upstart -
  Microsoft co-founder Paul Allen has invested $1.65 billion in RCN, a telecom company competing for local, long-distance, cable television and Internet customers. It's one of Allen's biggest investments, according to Reuters. RCN is building a fiber optic network in California. The company has entered into a joint venture with Allen's Charter Communications, the No. 4 U.S. cable company, to provide telephony services in Los Angeles.

• Cox, Time Warner Restructure Partnership -
  Cox Communications and Time Warner Cable are restructuring TWC Cable Partners, a partnership that owns cable television systems serving Ft. Walton Beach, Florida and Staten Island, New York. Under the restructuring, Cox will own a controlling interest in the 73,300-customer Florida system and Time Warner will own controlling interest in the 109,500-customer Staten Island system.

• GI Expands in Mexico, Announces Web Box -
  General Instrument (GI) announced Tuesday Cablevision S.A. de C.V. of Mexico has selected its interactive digital broadband platform to offer service to more than 350,000 subscribers in Mexico City. Cablevision, which is jointly owned by Televisa and Telmex, is deploying a complete end-to-end digital network and interactive consumer terminal by the end of the year. GI also announced the introduction of SURFview, a sub-$100 set-top terminal that enables operators around the world to provide low-cost Internet access via the television.

• IPO Prospects in Singapore -
  Singapore Cable Television, the country's only cable television operator, may go public within two years, according to Reuters. The company is owned by newspaper publishers Singapore Press Holdings, MediaOne Group, diversified conglomerate Singapore Technologies and TV broadcaster Media Corporation of Singapore.

• Swiss Company Selects Terayon Technology -
  Cablecom, the largest cable operator in Switzerland, is deploying the new CherryPicker 7000 video statistical re-multiplexer from Santa Clara-based Terayon Communications Systems. Cablecom will install the CherryPicker 7000 in the headend of its Zurich system, which serves approximately 1.5 million subscribers.