In response to what is being called a "concerted attempted by the networks, affiliates and their trade organizations to destroy it as a competitor", PrimeTime 24 has filed a suit in U.S. District Court against Fox, ABC, CBS, NBC, the National Association of Broadcasters and several affiliates and networks affiliate groups. PT24 claims that they all conspired illegally to hinder competition from the satellite broadcast industry, and forming a group boycott of PT24 and refusing to negotiate an agreement for the transmission of network programming.
Papers filed in U.S. Bankruptcy Court in Delaware listed Tee-Comm Distribution of Tonawanda, N.Y assets at $10 million and liabilities of around $105 million. This forced yet another U.S.-based unit of Tee-Comm Electronics to file for Chapter 11 bankruptcy protection.
3 days prior, Stamford, Conn.,-based AlphaStar filed for Chapter 11 protection in the same court. In late May parent Tee-Comm Electronics was placed in receivership by its banker, Bank of Montreal.
Hughes Electronics, parent of Hughes Aircraft company, filed a motion requesting the Court of Appeals in Washington, D.C. to reaffirm an earlier decision that would force the U.S. government to pay Hughes Aircraft Company $114 million.
It all began in 1959 when Donald Williams, a scientist, developed a communication satellite altitude control system. In 1960 Hughes applied for a patent on Williams' device. Six years later the U.S. Patent office granted Williams his claim which was then disputed by the U.S. government. Finally in 1973 Hughes was issued a U.S. patent. Hughes then filed suit against the U.S. government claiming they used the patented technology in geosynchronous orbit satellites for a period of almost 10 years, without permission.
The motion, filed at the end of May by Hughes, concerns a 24-year-old patent infringement lawsuit. In April, the appeals court judge was ordered by the Supreme Court to reconsider its earlier decision upholding the judgment. Hughes stated that having the appeals court reconsider the matter does not cancel the award.
Despite doubts that DISH would only last through the end of June, and even though the "Sky" alliance with News Corp. failed, shares in EchoStar Communications made considerable progress early in the month. EchoStar, parent of DISH, reportedly have been working with financiers to secure more cash for the company. According to reports, Chairman and CEO Charlie Ergen is planning a financing deal to be managed by Donaldson, Lufkin & Jenrette, a New York-based law firm.
Reports indicate that the $325 million offering, which is happening through holding company EchoStar DBS Corp., will be arranged with a two-and-a-half year interest reserve. The deal will also consist of five-year senior secured notes predicted to harvest between 12.25% and 12.50%.
Mostly recently it was reported that the issue increased in size by $50 million, settling at $375 million. Proceeds of the issue will be used to fund the EchoStar IV satellite, scheduled for launch in the first quarter of 1998, and costs related to the EchoStar III satellite, set for lift-off in September.
A total of $109 million from the issue will fund the first five semi-annual interest payments on the notes, market sources said.
Former Cold War enemies , the U.S., Russia and the Ukraine, have pooled their knowledge together in order to launch satellites from the sea. The project, Sea Launch, is a multi-million dollar project using a converted, mobile oil drilling platform. The platform will be placed in a prime launch position near the equator, approximately 1,000 miles south of Hawaii, where the Earth's rotational speed is the strongest.
U.S.-based Boeing Co. has 40 percent stake in the project, while Russia, RSC Energia, a booster rocket manufacturer, has 25 percent stake, and Ukrainian rocket producer Yuzhnoye, holds a 15 percent stake in the project. The remaining 20 percent is held by Anglo- Norwegian construction firm, Kvaerner ASA.
The World Bank will lend two separate $100 million commercial bank loans to Energia and Yuzhnoye despite political risk, claiming it would create 30,000 high-technology jobs in Russia and Ukraine. Although France didn't want the World Bank to be a part of this project, due to a concern over rocket technology being used for military purposes, the bank's other member nations, including the U.S., gave them the okay.
The company already has 18 launching contracts, with the first launch expected in the fall of 1998. All launches will be licensed, regulated and monitored by the U.S. government
It's official, Primestar Partners which consist of Cox Communications, TCI Satellite Entertainment, GE American Communities, Time Warner/Newhouse, Comcast Corp. and MediaOne has joined forces with News Corp.
The Primestar roll-up has come together after numerous delays outside the home satellite consortium. According to TCI Satellite Entertainment, one of six Primestar partners, Gary Howard stepped down from his position as President of the company for a top job with United Video Satellite Group.
Primestar will be converting to a public company called Primestar Inc. consisting of MCI Communications and $1.1 billion of News Corp. satellite assets.
AskyB, a MCI -News Corp. venture, with it's 110 degree West Longitude orbital slot using 28 transponder channels and two satellites currently being constructed, was one of the biggest assets used in striking the deal with Primestar. Ruppert Murdoch is merging his AskyB assets with Primestar in exchange for a 30 percent non-voting interest in Primestar with the liquidation value of $1.1 billion and admission to the U.S. satellite TV business.
Even though the merger has a lot to offer U.S. satellite T.V. viewers, analyst said the deal may be subject to certain regulations and political opposition from lawmakers who fear that it may create a monopoly of the nations media.
Due to the failed EchoStar alliance, which consist of News Corp. investing $1 billion in cash and assets and the use of it's 110 degree orbital slot, News Corp., who has joined Primestar, has decided to counter-sue EchoStar Communications. News Corp, denying all material claims in EchoStar's complaint, has accused EchoStar of bad faith, misconduct and failure to disclose material information . The counter-suit also contains claims that Charlie Ergen, chairman and CEO of EchoStar, placed his interest in keeping control of EchoStar ahead of his interest in News Corp., News Corp's AskyB satellite unit, and EchoStar shareholders.
Comcast, one of the nations largest cable television operators, will be receiving a $1 billion investment from Microsoft. This investment will help in utilizing Comcast's cable network for high speed data and video services.
Chairman of Microsoft, Bill Gates, will be working side by side with Comcast President Brian Roberts in order to determine the strategic and technological direction of Comcast. Bill Gates will also lend Comcast his Vice President of Development, Greg Maffei, to serve as an observer on Comcast board of directors.
The deal includes the exchange of 24 million shares of Comcast's Class A Common Stock at $20.29 per share, $500 million of Comcast Series B Convertible Preferred Stock which will initially be convertible into more than 21 million shares at the conversion price of approximately $23.54 per share.
A new system, the Aerotrax 2000, is being offered to the commercial passenger airlines, offering in-flight TV and other services to the passenger. The system consists of a cargo bay mounted receiver, a 4 ft radome containing a phased array antenna, and display units at each seat.
The system, in it's initial configuration, can provide 6 selected TV programs, with future upgrades to increase channel capacity. The antenna can lock-on and track geostationary satellites through light to moderate turbulence. A control station on the flight deck can be used to send in-flight info to all passengers, or messages to individual passengers. The antenna guidance uses a GPS system, which can also be used to provide an aircraft position display on an overlay map to the passenger.
The system also operates while on the ground, so you can now watch your favorite TV program while waiting through the frequent ground delays. An important selling point is the availability of 1/2 and 1 hour programs for shorter flights, plus in-flight movie equipment and production will no longer be necessary.
The passenger terminals consist of a 4 inch LCD display mounted on the seat back or armrest. Simple controls for volume, channel and brightness are at each location, with a set of light weight headphones. CD quality all-music programs by category will also be offered.
Since the airlines will select the 6 or more channels from the 100's available, the content can be tailored to the demographics of the passenger list, useful for charter/vacation flight operators.
Although the western hemisphere passenger flights should be in continuous sight of the satellites, some flights may have to circle to remain in range till the end of the more popular programs, or face irate passengers upon landing.
4DTV, the digital upgrade for C-Band, is slowly but surely making it's way to stores across the U.S. Over a year of procrastination by General Instruments, the manufacturer of 4DTV, came to an end when the first 4DTV unit rolled of the Puerto Rican production line. Although 4DTV has been released, many distributors of the product say they are having a hard time trying to satisfy customers who have been waiting for their system for a period of up to three months.
Another problem that is plaguing the distribution of 4DTV is the fact that many programmers have yet to offer a digital signal. Although such programmers as HBO are offering a digital signal, many programmers are still in the negotiation stage.
In order to make up for overspending and greed Congressional budget leaders are considering the possibility of making money by requiring spectrum users who haven't bought their licenses through federal auctions to pay for the use of orbital locations.
Although the Senate Commerce Committee already scratched the idea of implementing user fees the House and Senate Budget Committees are both considering the activation of user fees to cover up a $8 to $10 billion in expected budget overspending.
It's expected that DBS companies who received spectrum locations prior to January 1996 auctions will be singled out by user fees if initiated. Those companies who have acquired their locations prior to the auctions include DirecTv, EchoStar, and USSB.
Although MCI paid $682.5 million for it's spectrum location in a January 1996 auction DirecTv, EchoStar and USSB, who all operate from full CONUS orbital locations, haven't paid for the use of their locations. It is expected that if the Congress does initiate user fees the 3 listed could pay a considerable amount for the use of orbital locations already in use. It is expected that since MCI acquired their orbital location through a federal auction they will not be required to pay additional user fees.
A joint effort to fight any provisions requiring the satellite industry to make up for the
governments multi-billion dollar mistakes is already underway.