Broadband in the sky
Pegasus plans to show two-way satellite system at CES
By Glen Dickson -- Broadcasting & Cable, 12/17/2000 7:00:00 PM
DBS provider Pegasus Communications will travel to International CES 2001 in Las Vegas next month to demonstrate a new way of delivering high-speed Internet service to consumers: two-way broadband satellite.
Bala Cynwyd, Pa.-based Pegasus, which serves 1.3 million rural subscribers nationwide, will be offering the system in conjunction with Hughes Network Systems (HNS), manufacturer of DirecPC DBS data receivers. Although DirecPC has relied on a dial-up connection as the Internet backchannel, Hughes has developed a satellite modem that can send signals back to a satellite at data rates up to 100 Kb/s; the downlink to the consumer delivers data at up to 400 Kb/s.
According to Chris Walczak, Pegasus vice president of product development, Pegasus Express Powered by DirecPC will target the 10 million homes that can't reach Internet services like AOL or MSN through a telephone connection. "Two-thirds of our subscribers can't reach AOL with a local dial-up call," he says.
Pegasus Express, which will be marketed through subsidary Pegasus Broadband, will sell for $499 and will include a hybrid DirecPC Internet/satellite TV antenna that can also receive DirecTV programming; a USB satellite modem; and software. The service, which will be available commercially in February, will sell for $69.95 on a stand-alone basis and $59.95 when bundled with a DirecTV programming package.
That puts Pegasus Express in the same range with StarBand Communications, a two-way broadband service launched last month and marketed by EchoStar and RadioShack. Walzchak expects the price to drop sharply with volume.
Satellite analyst Vijay Jayant sess broadband-over-satellite as a good opportunity for Pegasus, which already has relationships with 3,000 retailers. Although the data rate may not be competitive with DSL or cable modems, he says, there are 30 million housholds where "I don't see DSL and cable modems in the near future." He expects Pegasus to grab a chunk of that market.
But he cautions that effective bandwidth management-controlling how much bandwidth is dedicated to individual users' request-will be key. "The problem with the old DirecPC, besides the phone line, is there was no good bandwidth management. You'd have one guy using Napster all day, and that would eat up bandwidth for everybody else."
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