Bypassing the Terrestrials

A preview of what a merged Hughes-EchoStar would look like will be on display today when Hughes Network Systems (HNS) introduces the companies that plan to support Hughes’ $1.5 billion Spaceway satellite broadband bet. The Germantown, Md.-based HNS is a Hughes Electronics subsidiary that provides the backbone technology for another Hughes subsidiary, DIRECTV, the largest provider of satellite television in the United States.

Last month, Hughes Electronics parent General Motors agreed to sell Hughes to EchoStar Corp., the nation’s second largest satellite TV provider, for $4.2 billion in a deal that would create the second largest pay TV company (16 million subscribers) in the U.S. and make the merged companies a significant challenger to the cable kingdoms of AT&T and AOL Time Warner.

Since cable TV companies presently control more than 80 percent of the U.S. pay television market and have themselves invested heavily in delivering broadband over fiber optic cables, the proposed EchoStar-Hughes merger will be fought by a number of communications companies that have a vested interest in land-based cable systems, not to mention News Corp., which wants to add Hughes to its Sky Global Networks, the world’s largest satellite television company with 85 million subscribers but currently without a U.S. footprint.

With or without EchoStar, however, Hughes plans to have its Spaceway satellite fleet operational by 2003. The Ka-band platform will be used in a new broadband satellite network to provide high-bandwidth and high-speed communications for broadband and multimedia applications to North America in 2003. Spaceway will provide bandwidth-on-demand for customers using and paying for only the amount of bandwidth needed for a specific application, from e-mail to high-bandwidth, high-speed corporate networks.

Hughes new DIRECWAY dishes will have an antenna that provides broadband Internet service and access to more than 225 channels of DIRECTV programming. Spaceway’s full point-to-point and multi-cast communications architecture provides an enabling technology for the development of high bandwidth peer-to-peer applications, such as file sharing, distributed databases and de-centralized content distribution.

“Spaceway will change the way the world communicates. Spaceway will transmit and receive information hundreds of times faster than conventional telephone networks,” says Jay Bertelli, president and chief executive officer of Mercury Computer Systems, which is currently testing the digital signal processing systems of the Spaceway satellites.

Hughes plans to sell the consumer high speed service for between $60 to $70 a month.

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