NORTHPOINT SAYS IT PLANS TO BUILD DBS SATELLITES
Northpoint filed FCC application late Wed. to construct 2 DBS satellites and operate as satellite-terrestrial system that would make it “stronger competitor” to merged EchoStar- DirecTV DBS companies, CEO Sophia Collier said Thurs. “With a terrestrial system, we were a good competitor,” but with merged DBS companies it would be “hard for us to compete.” Despite industry speculation that Northpoint decided to integrate system because of concerns about auction, Collier said it wasn’t “a legal reason, but a business reason” that caused Northpoint to alter its business model. She said major system upgrade would allow Northpoint to increase capacity significantly, provide faster broadband service and incorporate modular set-top box architecture that would allow outside developers to offer new services once FCC approved license. Northpoint made public no details about satellites or financing, but said it would be financed by affiliates and founders.
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Collier said company was hoping new plan would accelerate FCC decision. “We have been waiting for 8 years” to receive license: “We think our time has come. This will create new competition.” It’s often repeated refrain from company, but with satellites Northpoint has “new legitimacy,” industry attorney said, “and may actually push the DirecTV- EchoStar merger forward because the company could emerge as a legitimate competitor.” Attorney called it brilliant “lawyering” by Northpoint representatives. “They have obviously done their homework.” Collier said Northpoint could offer service in year or less. DBS portion could be added in 2-3 years following construction of geostationary satellites. “The satellite industry is in such a slump we probably will get faster service,” Collier said.
Northpoint applied for slots at 157 W and 166 W over western part of U.S. and close to Hawaii and Alaska. One of slots formerly was owned by DirecTV but was returned to FCC. Other belonged to company that failed to build system, Collier said. “These are slots that have to be combined with a terrestrial system to be useful. Nobody wants these slots.” As global satellite company, Northpoint also would be exempt from auction under ORBIT Act. It has opposed FCC auction because it believes it should receive pioneer’s preference as innovator of technology. Commission has pondered decision long and hard and industry sources have been speculating for weeks that final rulemaking was imminent.
New system incorporates several breakthrough technologies developed by Northpoint engineers, Collier said: “They have been working on this for a long time.” Advanced hardware and software advances should lead to “more spectrum efficiency,” she said. Plan calls for Northpoint to offer up to 300 channels of video programming and wireless Internet service with maximum speeds of 2.0 Mbps downloads and 512 kbps uploads. New satellite-terrestrial system called Compass would allow Northpoint to increase overall system by “right-sizing” its transmissions, company said. Combined uniform system would deliver uniform national programming through DBS system and local channels and high-speed Internet through local terrestrial transmissions.
Northpoint said it planned to market modular set-top box with open box architecture. Design would allow outside developers to add functionality to Northpoint system with plug-in media modules. Collier said innovators would be able to create new consumer entertainment and information services. Service also would feature digital video recorder, offered as optional upgrade to set-top box that would retail for $99. Core service would be basic 96-channel TV package, including all local signals in each market, it said. Monthly service would cost $39 for video and Internet or $20 for individual service.
Decision to launch satellites caught Northpoint rivals by surprise. One satellite attorney called move “a reverse Craig McCaw.” ICO chmn. raised eyebrows at Commission when he attempted to use terrestrial spectrum to back up proposed satellite system. “Here they are doing just the opposite,” attorney said: FCC was poised to act at last meeting (March 14), but Northpoint issue was taken off table at last min. at Northpoint request because Commission was ready to issue license with auction. “This is a strategy to head off the auction,” he said. Collier denied accusation: “We don’t know why it was taken off the table.” Meanwhile, she said she was hopeful issue would be resolved by FCC’s next meeting: “They may handle it on circulation.”
FCC shouldn’t make any decision on new Northpoint application until everyone has opportunity to review and respond to filing, Satellite Bcstg. & Communications Assn. Pres. Andrew Wright said. He said issue still was interference, not competition. He said if Commission decided to move forward in licensing Northpoint, there still should be auction. SBCA said it would reserve further comment until it reviewed filing.