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Direct-To-Home ServicesThe satellite-TV industry was born when consumers began using large C-band antennas to receive cable programming that was being backhauled on domestic satellite systems. By the mid-1980s, programmers began to scramble their signals and charge for access. After several attempts to develop direct broadcast service (DBS) satellite systems failed to get off the ground (including Comsat’s), the cable industry’s Primestar partnership began service in 1991 using smaller Ku-band antennas. Primestar’s business ultimately fell victim to competition from DirecTV, which launched in 1994 and soon acquired it. DirecTV might never have launched had it not partnered with Hubbard’s United States Satellite Broadcasting DBS business to share a single spacecraft between two DBS competitors. By the end of 1998, just four years after DirecTV launched and two years after Echostar launched, those two DBS operators had more than 10 million subscribers; today that number is nearing 30 million.
The commercial success of DirecTV and Echostar was hastened by three crucial pieces of legislation. In 1988, the Satellite Home Viewer Act established the legal mechanism to deliver network and superstation broadcast signals to viewers in “white areas” where the public does not receive free primary services. The 1992 Cable Act effectively guaranteed DirecTV and Echostar the right to contract for the cable programming that their potential customers demanded, and the 1999 Satellite Home Viewer Improvement Act finally allowed consumers to receive local broadcast signals via their DBS providers.
Mobile Satellite ServicesAlthough Inmarsat enjoyed great success as a provider of MSS, chiefly to commercial and governmental users, other early efforts to facilitate MSS did not fare as well. American Mobile Satellite Consortium, now known as Mobile Satellite Ventures, was created in 1988. The race in the MSS industry was fully engaged a few years later, with five entities pursuing big LEO (low-Earth orbit) MSS systems that promised global coverage and cellular-like services, and nine companies pursuing next-generation MSS systems at 2 gigahertz. Unfortunately, Iridium misjudged the market, and by the time it began service in 1998, the terrestrial cellular infrastructure had been built out to the point that Iridium’s multibillion dollar network could not compete as intended. Both Iridium and Globalstar were reborn through bankruptcy, with Iridium landing a contract with the U.S. Department of Defense that kept the system from being deorbited. Those bankruptcies dampened enthusiasm for this corner of the MSS sector, especially for use of non-geostionary satellites, and most of the 2-gigahertz licensees lost or gave up their licenses.
In the meantime, a number of positive developments occurred. ICO, Mobile Satellite Ventures and others urged the FCC to authorize the deployment of an ancillary terrestrial component (ATC) that would permit the reuse of satellite frequencies to provide hybrid satellite/terrestrial offerings. Over the heated objections of terrestrial wireless companies, the FCC adopted rules that allow MSS operators to provide ATC in their satellite spectrum. Mobile Satellite Ventures and Globalstar hold ATC authority today, and others are expected to seek and receive similar authority soon. In the intervening years, Inmarsat gained access to the United States and launched two next-generation spacecraft that today offer half-megabit MSS service to notebook-sized terminals.
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