- - - DirecTV 1-R Is First Sea Launch Success - - -

DirecTV 1-R, the fourth direct-broadcast satellite built for DirecTV by Hughes Space and Communications (HSC), was launched successfully Saturday night and became the first commercial satellite sent up from the ocean-based Sea Launch platform.

DirecTV and HSC are units of Hughes Electronics Corporation.

DirecTV said the satellite will provide the additional Ku-band capacity to deliver local broadcast network channels to approximately 50 million homes, or about half of the nation's television households.

DirecTV President Eddy Hartenstein commended Sea Launch and HSC for the successful launch and said the new capacity will create additional revenue opportunities for DIRECTV. "Once in operation at 101 degrees West longitude (WL), DirecTV's main orbital slot, DirecTV 1-R will strengthen our in-orbit redundancy and enable DirecTV customers in up to 20 of the nation's key television markets to receive their local broadcast channels as well as the current lineup of digital DirecTV entertainment and information programming through their existing set-top box and 18-inch antenna," he said.

Michael T. Smith, chairman and chief executive officer of Hughes Electronics said, "With this new high-power HSC satellite in place, DirecTV is ready to better compete with cable and deliver local broadcast stations into local markets as soon as pending legislation is passed by Congress."

DirecTV 1-R is an HS 601HP model, with 16 high-power Ku-band transponders. The companies said the new bird will deliver 30 percent more capacity than DBS-1, an HS 601 spacecraft that currently serves DirecTV subscribers from 101 degrees West Longitude but will move to 110 degrees West Longitude to serve as back-up capacity.

The satellite lifted off aboard the Sea Launch Zenit rocket at 8:28 p.m. PDT Saturday from the middle of the Pacific Ocean. After about 62 minutes, the rocket left the spacecraft in a geosynchronous transfer orbit. Over the next 30 days, HSC controllers will maneuver the spacecraft into a circular orbit, deploy the antennas, solar arrays and radiator panels, and test the operational functions, communications payload and propulsion system. DIRECTV expects to begin offering services from DirecTV 1-R by December of this year.

- - - New FCC Rules Could Help AT&T, MediaOne - - -

The Federal Communications Commission has adopted rules that could give AT&T additional flexibility in completing its merger with MediaOne Group.

As issue has been the 1992 Cable Act, in which Congress directed the Commission to establish "reasonable limits" on the number of cable subscribers any one company can reach nationwide.

The Commission retained portions of its current rules, including a 30 percent ownership cap, according to the Dow Jones News Service. But the FCC expanded its definition of the video services market by including 10 million DBS customers, effectively increasing cable's ownership limits by about 6.7 percent. Additional flexibility would be provided to limited partnerships that may affect how AT&T must attribute the 25.5 percent share in Time Warner Entertainment that it would acquire as part of the merger.

- - - Satellite Pioneer Starts New Company - - -

Hubbard Broadcasting, a privately-held corporation based in Minnesota that owns 10 television stations, two radio stations as well as other entertainment companies, has formed a subsidiary called Hubbard Media Group.

Hubbard Broadcasting helped pioneer the satellite television industry when it formed U.S. Satellite Broadcasting (USSB) in 1981. USSB began operations in 1994 in partnership with DirecTV and ultimately merged with DirecTV earlier this year.

The new company will develop and launch a multi-media business that will focus on opportunities "that can deliver high entertain- ment value to national audiences," the company said.

- - - CD Radio Raises Additional $30 Million - - -

CD Radio announced it raised an additional $30 million when its underwriters recently exercised their over-allotment option relating to the company's recent financing.

An additional 450,000 shares of common stock were issued as well as $18.75 million in principal amount of the company's convertible debt. These issuances bring the total proceeds of the company's recent equity and convertible debt offerings to $230 million.

The company said the funds will be used for the continued build-out of CD Radio's satellite-to-car radio broadcast system and for general corporate purposes. The subscription service, which will cost $9.95 a month, is scheduled to begin at the end of next year.

- - - SkyBox: Darwin's Finches & the FCC's Duck - - -

Eyeing the recent mega mergers in the cable/telco industry's, FCC Chairman William Kennard recently intoned, "We are certainly not per se against consolidations, particularly those that achieve the kinds of economies of scale that can help consumers. On the other hand, we are against those consolidations that raise the barriers to entry by competitors."

Does anyone see the inherent contradiction?

With "economies of scale," of course, a company gets big enough to both lower its own administrative costs and to force lower costs on its vendors, which sometimes means lower prices to customers. Which is good - except when it also means less weighty competitors have trouble competing. That translates into "barriers to competition." As in Wal Mart, for example.

Do you suppose Le Canard does his own shopping? Does he know what a neighborhood store is? Or how fast it can disappear in the face of those Wal Mart-sized "economies of scale"?

Not that we're against such things. Not, as Le Canard puts it, "per se." What scares us, however, is bureaucratic double-speak combined with the continuing spectacle of the FCC and, in fact, most of Washington, which is focusing on yesterday when we're already half-way to tomorrow. For example, we've lately heard much ado about "must carry" and how, if cable operators have it, so should satellite folks, never mind the differences in technology and capabilities. The cable guys like that, of course, because by tying up satellite spectrum they can make themselves look better. But the real question, if we are to face tomorrow instead of yesterday, is why must-carry at all? Is it written in stone that broadcasters are entitled to make profits off their use of public airways? Is something that worked well in the 1950s deserving of special protections in the third millennium?

In his remarkable book "The Beak of the Finch," Jonathan Weiner writes of the fast pace of evolution among Darwin's finches on the Galapagos Islands by noting that their highly variable beak structures "blur together, just as we would expect in a place where the river is racing and the cosmic mills are turning fast."

So it is these days in the telecommunications industries as video, voice and data blur together in a fast-changing stew designed to provide the best mix for the future. Unless, of course, the FCC's Duck keeps his eyes focused on "economies of scale," "barriers to competition" and the mores of yesterday.

On another subject entirely, we're wondering if anyone out there really believes that David can swallow Goliath. According to the press releases, and press reports, tiny Gemstar plans to do just that with the mighty TV Guide Inc. But has anyone out there checked their relative earnings? Or who, exactly, owns the key stock? All we can say is, don't expect Gemstar CEO Henry Yuen to call all the shots.

- - - PEOPLE: - - -

• New Primedia CEO Sparks Internet Plans -
  Primedia, the publishing company that owns a stable of magazines including Seventeen and Soap Opera Digest, has hired an NBC executive to be chairman and chief executive. Tom Rogers, 45, who helped create the MSNBC and CNBC cable channels and guided NBC's recent moves into the Internet, will replace William Reilly, 62, who is retiring. With the appointment Primedia hopes to adopt cable TV's strategies of building audiences and increasing revenues by catering to niche consumer markets.

• ESPN Promotes Affiliate Exec -
  Manish Jha has been promoted to vice president, affiliate sales development and operations, at ESPN. Jha's responsibilities will include affiliate policy and strategy development for the company's domestic networks, as well as overseeing affiliate network services and contract administration.

• Teledesic Expands Europeans Presence -
  Klaus Naumann, a former North Atlantic Treaty Organization (NATO) official, has joined Teledesic as managing director of Europe. Teledesic is satellite communications company that is building a global, broadband Internet-in-the-sky. The company also has named Paul Thompson as director of European technical regulatory affairs.

• Former Cable Exec Joins iBEAM -
  Gwin Scott, a former vice president at Turner Broadcasting, has joined the sales management team of IBEAM Broadcasting, the satellite Webcast Internet content distributor. The company also recently appointed Fred Seegal, an investment banker and financial consultant for the telecommunications and broadcasting industries, to its board of directors.

• DualStar Adds Three Board Members -
  DualStar Technologies, a company that designs and installs infrastructure systems and provides services that include serving as a DBS and cable television System Operator, has elected three new members to its board of directors. They are Robert Birnbach, Jared Abbruzzese and Michael Whalen, Jr.