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Full speed ahead for WildBlue, DirecTV and EchoStar

Fri, 06/09/2006 - 7:52am
Jeff Baumgartner, CED

WildBlue Communications Inc.’s on-again/off-again relationship with the satellite video industry is back on again after it secured distribution deals with EchoStar Communications and DirecTV.

Under the five-year wholesale distribution deal announced Friday, DirecTV and EchoStar have agreed to offer WildBlue’s satellite-fed Internet service exclusively over the next five years. Financial terms were not disclosed.

The deal is a major one for WildBlue, which will now be able to tap into a combined DBS subscriber base of more than 27 million customers.

A WildBlue spokeswoman said DirecTV and EchoStar customers will need to use a separate dish to receive the high-speed data service, but that the companies are still considering the development of a dual-mode dish that’s capable of providing digital video and data services simultaneously.

EchoStar and DirecTV expect to begin marketing WildBlue services under their own respective brands in the “coming months.” They said pricing information will be forthcoming.

Earlier this year, WildBlue secured a similar deal with AT&T Inc., which will market satellite broadband services in rural areas underserved by DSL and high-speed cable lines. Under that deal, AT&T will market WildBlue’s highest level, 1.5 Mbps downstream/256 kbps upstream for $79.95 per month.

The deals with DirecTV and EchoStar “are a turning point for WildBlue,” said WildBlue CEO David Leonard.

They are also a long time in coming. EchoStar, despite earlier high hopes, had already written off its $50 million investment in the Ka-band, Colorado-based satellite data service provider. It also wrote off a previous investment in Starband Communications, another provider of broadband-based data services.

DirecTV, meanwhile, used to be linked to the Ku-band-based service Direcway, which is now part of Hughes Network Systems LLC and has recently been rechristened “HughesNet.” DirecTV also had plans in place in the late 1990s to offer high-speed services via three satellites attached to the Spaceway project, but has since decided to use two Spaceway birds to expand its high-definition television capabilities.

The WildBlue connection also calls into question past speculation that DirecTV would use WiMAX technology to fuel a high-speed service bundle.

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