IP Democracy: Will DirecTV and EchoStar Opt for ATC?

On the heels of EchoStar’s and DirecTV’s abandonment of broadband wireless spectrum bids, the question remains: what will the two DBS players do to rectify their inability to offer voice and high-speed data services? Business Week’s Olga Kharif has this intriguing piece that suggests an interesting option — the satellite guys could do a deal with an ATC (ancillary terrestrial component) company.

Say what? ATC is a little-discussed hybrid satellite-terrestrial technology that beams signals from satellites to base stations and then ships the signals to users and back again. There are a group of companies that have licenses to offer ATC services, including Globalstar, ICO Global Communications, Motient, SkyTerra and Inmarsat. All are looking for partners to help them jumpstart their services.

Kharif quotes an analyst with Cowen & Co. who claims that the cost of building an ATC network would be $1.5 billion, compared to the $5 billion or so that DirecTV and EchoStar would have had to pay in the auctions. Moreover, ATC is a natural fit for DirecTV and EchoStar because it uses satellites.

WiMax, of course, is the most oft-cited solution for the two satellite players, with Craig McCaw’s Clearwire the commonly named potential partner. But, McCaw is also Chairman of ICO Global Communications, so the conversations taking place among the DBS providers and the broadband wireless companies — and they are, no doubt, taking place — could yield some surprising deals.

Posted by Cynthia Brumfield on August 25, 2006 10:09 AM to IP Democracy