SkyREPORT.COM News Headlines
News Update For 1/31/00
Arrests Made In DirecTV Hacking Case
Two Arizona residents were indicted on felony charges for their alleged role in a scheme to provide illegitimate DirecTV access cards to recreational vehicle owners. Timothy McDaniel and Michelle Hutson were charged following a search of McDaniel's recreational vehicle and residence in Quartzite, Ariz., the company said. Authorities seized computer equipment and other devices used for programming DirecTV access cards that receive signals from the DBS provider without authorization. Charges filed against the two include computer fraud, forgery, trafficking in stolen property and conspiracy, DirecTV said. The Marshall's Office in Quartzite executed the search warrant and made arrests with the assistance of the Arizona Department of Public Safety, the LaPaz County Sheriff's office and the FBI. DirecTV said its Office of Signal Integrity provided on-site technical assistance. "An individual who possesses an unauthorized DirecTV system access card may be subject to state and federal prosecution," the company said in a statement. DirecTV urged anyone who believes they are holding an illegal access card to call the company's 24-hour Signal Integrity hotline at 1-800-830-6090 or send e-mail to si@directv.com.
EchoStar Adds More Local Channels
EchoStar's DISH Network is adding two more cities to the list of cities it serves with local-into-local service. In Orlando, DISH is offering local WFTV-ABC, WKMG-CBS, WESH-NBC and WOFL-FOX, an EchoStar spokesperson confirmed. The service covers nine counties in the greater Orlando/Daytona Beach/Melbourne area. On Tuesday, EchoStar will add Cleveland broadcast network stations. They are WEWS-ABC, WOIO-CBS, WKYC-NBC and WJW-FOX. The local package sells for $4.99. For $1, customers also can get a national PBS feed. The new additions bring the number of cities covered by DISH Network to 22.
Hughes Spin Off: Speculation Is Back Again
Wall Street continued the on-again, off-again talk Thursday that General Motors plans to spin off its satellite unit Hughes Electronics, home of DBS giant DirecTV. Speculation surfaced after Goldman Sachs analyst Gary Lapidus upgraded his rating on General Motors to a "recommended list" from "market outperform." He set a six-month price target of $100 a share. While praising the auto giant for its strong operations, Lapidus said the possibility of a spin-off is the real reason for the upgrade. He said GM management should announce a partial separation of Hughes within the next few months, possibly following board meetings in February or March. Lapidus predicted GM will spin off between 33 percent and 50 percent of its Hughes stake to shareholders, or contribute some portion of a sale to a pension plan. The rest would be distributed at a later date. Wall Street has been abuzz about a Hughes spin-off for years. Recently, Hughes realigned its businesses and agreed to sell its satellite manufacturing arm to Boeing, which created more speculation about a separation of the two companies. Hughes has denied that a spin-off is in the works. In addition to the GM talk, PaineWebber raised its price target on Hughes Electronics to $150 from $140. Analyst Thomas Eagan maintained his buy rating, and at the same time praised Hughes Network Systems for its developing line of AOLTV and DirecPC products.
Telesat Eyes US Market
One of Canada's leading satellite providers will unveil plans to serve the United States at this week's Satellite 2000 Conference in Washington, D.C. Last month, the Ottawa-based satellite provider won full access to the U.S. fixed satellite market via its Anik E1 and E2 satellites. The two Telesat satellites were placed on the Federal Communications Commission's permitted space station list - a designation that paves the way for U.S. customers to use Telesat satellites for services liberalized under a World Trade Organization agreement. The list denotes all satellites with which U.S. earth stations are permitted to communicate without additional action by the FCC. Telesat President Larry Boisvert said last month that the designation will provide an alternative satellite provider to U.S. users. Most importantly, the deal opens up "the most lucrative satellite market in the world to Telesat," he said.
SkyBOX: Three Trends and An Icicle
With icicles dangling from the MARTA tracks and buses skating across frozen highways, the satellite crowd arrived in Atlanta for the big annual Super Bowl bash. Courtesy of some very adept juggling by the NFL staff, the big Saturday party proceeded smoothly in borrowed quarters as gossip circulated about who would be the next president of DirecTV (two candidates left, and counting); how the mountain of unfinished business from SHVIA legislation will fare in D.C. (prepare for a battering of big money barrages from the broadcast/cable crowd but satellite's growing consumer muscle could help it squeak through on some key issues); and how long it will be before a DISH/Replay package emerges (not very). Meanwhile, of the hot trends now surfacing in the industry, three bear watching from the news last week:
(1) Speaking of Replay, watch for a gathering storm over the "threat" of personal TV. These hot new products, beloved of both satellite platform providers and their subscribers, have begun to raise hackles among the pre-packaged entertainment crowd. The new devices’ VCR-like-with-quadrupled-convenience capabilities have given rise to the the fear that consumers might - horror upon horrors! - create their very own virtual channels, stocked only with the programs they like. That means the "we’ll watch it only because it's the best thing on" programs could get cut out of the mix. Fearing a correspondent revenue drainage, the likes of CBS, Discovery Communications, Disney, News Corp. and Time Warner are pushing personal TV purveyors to enter into copyright licensing agreements with them. Guess who's pocketbook could get drained on that one.
(2) Beyond the subversive new personal TV devices, two-way satellite Internet continues to make news as the folks at Hughes Electronics recently unveiled high-speed Internet initiatives a good two years before expected. According to the GMH execs, consumers can expect a DirecPC-on-steroids product by Q4 2000. The product would offer two-way by satellite with an AOL component which, the company hopes, will help spur growth. Eschewing the last few years’ reluctance to set goals, Hughes pegged 1.2 million as the number of subscribers it hopes to achieve by 2003, at which time it plans to launch its second-generation Ka-Band project, Spaceway.
(3) Meanwhile, another infant satellite service, AKA global telephony, continues to flail in generally unresponsive markets. Globalstar, the satellite telephony service backed largely by Loral, recently reduced its year-end subscriber estimates by about one-third. Company officials say 1 million subscribers will be needed in order to turn a profit before taxes. But, according to a report from Bloomberg, Globalstar execs now expect only 650,000 to sign up by year end. Satellite telephony fans needn’t despair entirely, however, as the bad-news bulletins on Globalstar were somewhat offset by a BusinessWeek story insisting that cellular he-man Craig McCaw might yet pick up the pieces of the bankrupt Iridium system from Motorola. According to the magazine, MOT execs ameloriated some of their more ridiculous demands over Iridium, leaving a better-than-even chance of a McCaw rescue operation.
(Acknowledgment: A nice warm fire and many thanks to the NFL's Tola Murphy-Baran who pulled off the worst-weather super Sunday with class and aplomb.) Do you have a comment or letter for SkyBOX? Write the editors at editor@skyreport.com.
PEOPLE: Loral Cyberstar Makes Moves
- Brant Heads Loral CyberStar Unit - Maryland-based Loral CyberStar, the satellite and broadband data services provider, has named Patrick Brant president of enterprise services. Brant was previously president of Controlsat, a division of Orbital Communications. Loral Cyberstar also announced that Jeffrey Guzy will serve as general manager for broadband deployment.
- Eisner Announces Management Moves - ABC chief Robert Iger was named president of Disney. He fills a vacancy that has been open since Michael Ovitz left the company in 1996. Disney CEO Michael Eisner also announced other members of a new executive management team this week. It will include Vice Chairman Sanford Litvack and heads of individual business units.
- Teledesic Boosts Technology Team - Bob Day has become vice president of space technology and Paul Regulinski has become vice president of systems technology at Teledesic, the Washington-based company that is building a global, broadband Internet-in-the-Sky. Both executives were previously with Hughes Space and Communications.