While industry leaders were gathered in San Diego last week discussing the potential of the Internet via satellite Starband Communications Inc. was busy launching its direct-to-home service.

StarBand initially will be targeting the 55 million U.S. households that do not have access to cable modem or DSL technology, said Zur Feldman, StarBand’s co-chairman and CEO.

StarBand will lease up to 24 Ku-band transponders on the Telstar 7 satellite of Loral Space and Communications Inc. [LOR] and the GE 4 spacecraft of GE Americom [GE], allowing consumers to receive Internet access and satellite TV service with a single receiving dish.

A new Ku-band/Ka-band satellite dedicated to StarBand services is planned within the next few years to reduce the cost of providing the service, said Yoel Gat, chairman and CEO of Gilat Satellite Networks Ltd.

“Consumers no longer have to worry about how far away they live from the telephone company’s central office or if their cable company has upgraded in their neighborhood,” Feldman said.

…Download Speeds Up To 500 Kbps

Consumers will be able to download content up to 10 times faster than the fastest existing dial-up service, Feldman said. StarBand consumers are promised download speeds up to 500 kbps and upload speeds to 150 kbps.

The speed could burst higher at off-peak hours, when overall usage is light. However, speeds may slow during peak hours, such as weekday evenings. StarBand’s goal is to provide 150 kbps download speeds and upload speeds of 50 kbps during the busiest hours on the Internet.

As for the looming competition from Hughes Network Systems [GMH], which demonstrated its soon-to-be-introduced, two-way, satellite Internet service, Gat focused on StarBand’s head start. “It’s not what they say, it’s what we do,” he said. “Right now, we’re there and they are not. We’ll have to see how much of an advantage we have.”

“It puts us in the ball game of competing with DSL, cable and other services,” said Chuck Hewitt, president of the Satellite Broadcasting and Communications Association.