The proposal by the U.S. Federal Communications Commission (FCC) to open up a new swath of radio spectrum to satellite broadcasting services could fuel the construction of new satellites for providers seeking to expand into broadband services, according to industry analysts.
The FCC is looking at opening up additional spectrum in the 17.3-17.7 gigahertz and the 24.75-35.35 gigahertz bands for Direct Broadcast Satellite (DBS) services. The spectrum is known as the reverse DBS band because the proposal would allow uplinking in frequencies currently used for DBS downlinking , and vice versa.
In a Notice of Proposed Rulemaking issued June 21, the FCC states the spectrum allocation, if adopted, would become effective on April 1, 2007.
The two primary U.S. DBS players โ Echostar Communications Corp. of Englewood, Colo., and DirecTV of El Segundo, Calif. โ have filed for licenses for satellites using the spectrum, as have Intelsat Ltd. of Bermuda and Pegasus Development DBS Corp., a subsidiary of Pegasus Communications Corp. of Bala Cynwyd, Pa. Intelsat is the worldโs largest commercial satellite operator; Pegasus is a reseller of DirecTV services.
Robert Mercer, director of public relations for DirecTV, did not return phone calls seeking comment on his companyโs plans by press time. Echostar spokeswoman Kathie Gonzales declined to comment on her companyโs plans.
According to the rulemaking, the reverse DBS spectrum can be used for โa new generation of innovative satellite services โฆ providing a mix of video, audio, data and multimedia services to residential and business customers.โ
Analysts speculated that DirecTV and Echostar would use the spectrum to get into the broadband Internet delivery business, allowing them to bundle these and other data offerings with their television packages.
โThat spectrum in my mind is worth the most to DirecTV and Echostar,โ said J. Armand Musey, president of Near Earth LLC, a New York-based analysis firm.
At least one senior industry official expressed high hopes for the reverse DBS allocation in terms of satellite orders it might generate. โI think youโre looking in the neighborhood of five to 10 satellites over the next five years, should all the processing start to take place,โ said Clay Mowry, president of Arianespace Inc., the Washington-based subsidiary of Europeโs Arianespace commercial-launch consortium.
But Dee Valleras, a spokeswoman for satellite manufacturer Lockheed Martin Commercial Space Systems of Newtown, Pa, was more cautious. โThe proposal โฆ certainly has the potential to open up more spectrum,โ Valleras, said. โBut as far as new orders, we feel itโs just too soon to speculate.โ
Analysts were divided on the impact of the reverse DBS-allocation in terms of satellite construction contracts.
โFive new satellites, or maybe even seven to eight, doesnโt sound unreasonable to me,โ said John Stone, also with Near Earth.
But Max Engel, a San Antonio-based analyst with the consulting firm Frost & Sullivan, said such projections may be optimistic. Engel agreed that DirecTV and Echostar eventually must expand into broadband services to stay competitive with terrestrial services such as cable, but noted that customers have been slow to gravitate toward satellite broadband.
โItโs just hard to say whether there is going to be compelling new interest,โ Engel said. โItโs hard for me to see where you will suddenly make, say, 10 times as many people want that service.โ
Analysts tend to agree that it is unlikely that the FCCโs planned spectrum allocation will result in new players entering the DBS market.
โIt would seem challenging to start a major DBS operation given the maturity of the market,โ Musey said.
Many issues have yet to be ironed out regarding the spectrum proposal. The FCC still has to consider whether to allot the spectrum on a first-come, first-serve basis or adopt new licensing criteria , the notice said.
The commission also is investigating the appropriate orbital spacing requirements for satellites operating in the reverse DBS band. Although DBS satellites traditionally are spaced at least 9 degrees apart in the geostationary-orbit arc, DirecTV and Echostar have proposed 4.5-degree spacing, which the FCC will evaluate as a possibility, the document said.
Analysts said the 4.5-degree spacing proposal might be controversial since previous attempts to change the orbital-spacing rules have not always been well-received.
โThereโs been a real concern whether 4.5 degree spacing would cause interference, and itโs still an issue,โ said Jimmy Schaeffler, chairman and chief executive officer of The Carmel Group consultancy of Carmel, Calif.
Comments: mfrederick@space.com
