Chris Blount
03-11-04, 07:45 AM
Satellite seeks broadband re-entry
Last modified: March 11, 2004, 4:00 AM PST
By Jim Hu
Staff Writer, CNET News.com
Hughes Electronics swallowed a bitter pill last year when it ended an ambitious partnership with America Online to deliver high-speed Internet access over the Hughes satellite network.
Satellite companies have tried in the past to launch broadband services, but the offerings wound up being too expensive and too slow compared with cable and DSL. New technology and greater demand may help bridge the gap.
The severance of the $1.5 billion deal offered a tacit admission that the satellite industry's costly attempt to step into the broadband ring was an abysmal failure. The technology was expensive, both for the satellite companies and for consumers. And the competition was fierce, as evidenced by cable modem and DSL's (digital subscriber line) overwhelming dominance of the U.S. broadband market.
Now, despite ongoing technical and economic reservations, satellite companies including DirecTV-parent Hughes and refinanced start-up WildBlue are preparing risky plans to re-enter the broadband business--a reversal that signals they can't afford to sit out the race.
"It's a way for the DirecTVs of the world to fill a broadband gap to compete with cable, and to a lesser degree, with DSL," said Jim Penhune, an analyst at market research firm Strategy Analytics.
Full Story (http://news.com.com/2100-1034_3-5172088.html)
Last modified: March 11, 2004, 4:00 AM PST
By Jim Hu
Staff Writer, CNET News.com
Hughes Electronics swallowed a bitter pill last year when it ended an ambitious partnership with America Online to deliver high-speed Internet access over the Hughes satellite network.
Satellite companies have tried in the past to launch broadband services, but the offerings wound up being too expensive and too slow compared with cable and DSL. New technology and greater demand may help bridge the gap.
The severance of the $1.5 billion deal offered a tacit admission that the satellite industry's costly attempt to step into the broadband ring was an abysmal failure. The technology was expensive, both for the satellite companies and for consumers. And the competition was fierce, as evidenced by cable modem and DSL's (digital subscriber line) overwhelming dominance of the U.S. broadband market.
Now, despite ongoing technical and economic reservations, satellite companies including DirecTV-parent Hughes and refinanced start-up WildBlue are preparing risky plans to re-enter the broadband business--a reversal that signals they can't afford to sit out the race.
"It's a way for the DirecTVs of the world to fill a broadband gap to compete with cable, and to a lesser degree, with DSL," said Jim Penhune, an analyst at market research firm Strategy Analytics.
Full Story (http://news.com.com/2100-1034_3-5172088.html)