The Denver Post’s Kimberly Johnson has this trenchant piece today on how the FCC’s August 9 broadband wireless auctions are crucial to the future of DBS providers DirecTV and EchoStar. As I mentioned yesterday, the two companies have put up $972 million to bid in the auctions in order to get their hands on two-way terrestrial technology.
It’s also part of a dance by the nation’s number one and two DBS providers to join hands as their one-way video service offerings get eclipsed by the razzamatazz triple-play and quadruple-play interactive voice, video and data services delivered by cable and phone companies.
Gaining ownership of wireless networks that can deliver phone, TV and high-speed Internet access is crucial for the satellite TV companies.
It could also be part of a courtship leading to a merger between EchoStar, based in Douglas County, and DirecTV, based in El Segundo, Calif. Rupert Murdoch’s News Corp. controls DirecTV.
Investors are clearly warming to the idea of a EchoStar-DirecTV combination, even if the feds may still hold some objections to the idea. Without a merger, and with no two-way technology, both companies are at great risk of sinking into the sunset.
Satellite may lose even more of its appeal, as consumers increasingly demand TV, phone, and Internet services from a single provider. A Bear Stearns report says satellite is “structurally challenged (vs. cable) given its inability to offer a bundled package of communication services.” Citigroup chimes in, saying that they face “acute risks of slower subscriber growth and higher churn [customer turnover].”
Cynthia Brumfield at 8:57 AM|Comments(0)
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