Dish firms rushing to deliver interactivity

DirecTV, EchoStar are sure they can compete with cable in providing two-way broadband services to consumers

When satellite TV executives finally looked up after spending years fighting for the right to offer local TV signals, they saw cable companies in the process of spending billions of dollars to upgrade their systems to offer broadband Internet services.

So satellite was stuck playing catch-up.

Not any more, they say. In the race to bring broadband services to consumers, it will just be a question of who can get the technology out first and at the lowest price.

Not only are satellite TV executives convinced that they can compete with cable on their broadband services, but EchoStar CEO Charlie Ergen said earlier this month, at the Satellite Broadcasting and Communications Association's show in Las Vegas, that he expects EchoStar's data offerings to outpace the company's video services within five years.

As if to prove such projections, satellite TV companies introduced so many interactive TV and two-way broadband products in Las Vegas it was hard to keep them straight.

DirecTV, whose global chairman is Eddy Hartenstein, is leveraging several of its partnerships-particularly AOL's $1.5 billion investment in DirecTV parent company Hughes Network Systems-to introduce four advanced consumer-targeted services: Ultimate TV, with partner Microsoft; AOLTV; DirecTV with TiVo; and DirecTV Interactive, powered by Wink.

Ultimate TV is DirecTV's answer to EchoStar's DishPlayer. Both are based on Microsoft's WebTV product. Ultimate TV allows users to watch two shows at once, one full-screen and the other in a small window. It also offers digital video recording of live TV with instant playback, rewinding and fast forward, with 30 hours of program storage. Ultimate TV also hooks up DirecTV customers to the Internet and allows them to play along with popular game shows.

AOLTV is similar to Ultimate TV, but it brings consumers AOL's service over DirecTV's system. Consumers will have to switch out their existing DirecTV set-top box for a new one. AOL's content is downloaded to users via DirecTV's satellites, while users' connections to the Internet will be over phone lines.

DirecTV with TiVo allows users to record up to 30 hours of video, create personal TV channels and time-shift programming. Users also can record live television, pausing, fast-forwarding and rewinding shows. DirecTV has worked with Philips to manufacture a set-top box that combines the two services and a hard drive. TiVo's monthly service costs $9.95 for DirecTV customers, or $199 for a lifetime membership.

DirecTV Interactive brings additional information to regular programming, such as pop-up weather forecasts and local news and sports. It also provides interactive electronic-commerce services, so users can get more information about items they see advertised or buy them. EchoStar offers a similar product through its partnership with OpenTV.

DirecTV also still offers DirecPC, the first computer service to be delivered via satellite. But DirecPC is not a broadband service, because customers dial in to access it and its return path is through a telephone line.

EchoStar already offers the popular DishPlayer.

It teams with Microsoft to offer a WebTV-like product that allows users to watch TV, connect to the Internet and check e-mail simultaneously. That product also connects users to a telephone line if they want to send e-mail or upload information.

In addition, EchoStar has partnered with Israeli satellite TV company Gilat Satellite Networks and Microsoft to roll out Gilat-to-Home-to be renamed later-a two-way broadband service that should start beta tests this fall. Customers will be able to get Gilat's broadband service bundled with video services from EchoStar-certified dealers, or they can get Gilat-to-Home alone through Radio Shack and other retailers.

If Dish Network subscribers choose to subscribe to Gilat-to-Home as well, they will need to change their dish and then run two cables between their dish and their computer to bring data in and out. The advantage of a service such as Gilat-to-Home, satellite executives say, is that its return path will be broadband and the service will be continuously accessible. Plus, satellite covers the entire country without laying any terrestrial fiber, so rural and less populated areas will be served as soon as Gilat flips the switch.

Coming soon, though not as soon as Gilat-to-Home, are new services iSKY, with French partner Arianespace, and Hughes Electronics' SpaceWay. Both enterprises will need to launch new satellites before they can start offering services, so they aren't expected to be available until late 2001.