Satellite television firms move into Internet arena

Friday, Feb. 9, 2001 | 11:16 a.m.

Las Vegas' satellite television system providers, still not providing local TV station signals on their systems, have begun adding wireless Internet access in their bid to compete with Cox Communications, the city's dominant cable system.

High-speed Internet access through a cable modem has been a staple of Cox in Las Vegas for more than a year. And Sprint, the dominant local telephone system serving Southern Nevada, has introduced digital subscriber line, or DSL, that company's entry in the broadband communications market.

Now, satellite competitors will be vying for a share of the market with a system that will access the Internet through their dishes.

The new system offers the two-way Internet connection with the same dish that provides entertainment programming.

The first provider of the two-way high-speed Internet service is StarBand Communications Inc., McLean, Va. StarBand was formed by three partners, EchoStar Communications, which markets Dish Network; Gilat, an Israeli satellite maker; and Microsoft Corp., which invested $50 million in the project.

Other companies also plan to offer two-way Internet access. Hughes Network Systems, Germantown, Md., which operates the DirecTV satellite entertainment system, is in the process of upgrading its DirecPC Internet service to a two-way system. Currently, DirecPC is a one-way satellite link into homes. A startup company, Denver-based Wildblue, also plans to begin consumer service in 2002.

Eight locally based satellite system dealers are now offering the StarBand system, which was introduced in November and shown in Las Vegas at last month's Consumer Electronics Show.

"(We're) taking orders for this brand new system from people who are weary of wondering when DSL will get to their home, how many people might be on the cable hub or tying up phone lines for those long downloads," said Chris Dix, owner of Silver State Satellite, one of the contractors who installs Dish Network and StarBand in Southern Nevada.

Because DSL only works within about three miles of equipment installed throughout the city by Sprint, it is not available to all customers. And Cox's broadband offering only serves homes where cable is available.

That's why satellite television isn't only a product in demand for rural residents of Southern Nevada. But serving rural audiences is how the product is being pitched nationally.

When StarBand exhibited at CES, the company showed videotape of the installation of a dish at Supai, an Indian village at the bottom of the Grand Canyon. Because canyon walls block traditional radio signals, Supai has never had radio reception. Now, the village can get it off the Internet through its satellite dishes.

Another local StarBand installer says people who live or visit remote areas or who move around frequently are looking to the system for access to the Internet and e-mail as well as entertainment.

Some high-tech contractors hope to download building plans to their remote units in the field rather than transport them from offices.

"I've got a lot of people wanting to put it on houseboats and motor homes," said Denise Gibson, owner of Antenna Source, Las Vegas. "People in construction, people who move around a lot, are asking about this so they can have Internet access with them."

Consumers who prefer a satellite system to the cable or telephone alternatives are looking at a cost of $449 for the 24-inch dish antenna and satellite modem, plus $199 for the installation, which takes six to eight hours, Gibson said. Adding Dish Network at the same time is an additional $199.

Experts say like most consumer electronics products, dish and installation prices should come down as systems become more popular.

Proponents of satellite dish systems, DSL and cable modems rave about the always-on capabilities and the speed that data can be transferred with their systems.

StarBand receives content at 500 kilobytes per second, while the low-end cable modem receives data at 512 kilobytes per second, according to the respective companies. That means a 10-megabyte file that takes 24 minutes to download with a 56K computer modem would take just over 2 1/2 minutes with the respective broadband systems.

The installation is complicated, Dix said, because it takes precision adjustments to home in on satellite signals.

Because of the precision adjustments, the dishes occasionally are susceptible to signal disruptions because of wind. The precision adjustments and the high cost of the units and installation are frequently pointed out as disadvantages by companies like Cox, which, in Las Vegas, sold more Internet access than it expected in its first year.

"The response has been incredible," said Steve Schorr, a Cox vice president in Las Vegas. "We're substantially above where we thought we'd be after one year."

When the company rolled out ExpressNet, as it is known, it signed up 16,000 subscribers. Today, 38,000 of Cox's 330,000 Southern Nevada customers have the service.

Schorr said Cox's Internet-access product also is the backbone of other new features the company may offer. One such feature: a remote-access home security system the company is testing with Austin, Texas-based @Security Broadband Corp. The system, currently being tested by 85 Las Vegas residents, enables customers to view video images from the home via the Internet.

Sprint does not disclose the number of DSL subscribers it has for competitive reasons.

Cox and Sprint offer their broadband connections to the Internet for about $40 a month.

Meanwhile, on the entertainment front, the primary satellite TV providers still have no firm dates for when their companies will offer local stations on their systems.

Consumers who have satellite systems can view network programming, but have to rely on over-the-air broadcasts from local network affiliates to get local programming, like news.

EchoStar's Dish Network still plans to offer local programming for Las Vegas on its system by the end of the year, but DirecTV said Las Vegas programming isn't in the company's immediate expansion plans.

The Satellite Home Viewer Improvement Act requires that a satellite carrier that commits to broadcast a station within a local market must carry all the other stations within that market. The expense is what is keeping DirecTV from balking at entering the market.

The Satellite Broadcasting and Communications Association has filed suit to block implementation of the law.

The SBCA contends that in large markets, it would be burdensome for satellite companies to carry every channel. In Los Angeles, for example, must-carry rules would require companies to carry 24 stations. In Las Vegas, there would be 10, including two Spanish-language stations.

Similar must-carry provisions are in effect for cable operators.

The Greenspun family, owner of the Las Vegas Sun, also owns a minority stake in Cox's Las Vegas cable system.