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Cablevision Sees DBS Profits At End of Rainbow

By | July 21, 2003

      CAPE CANAVERAL, Fla. – Not content with its position in the New York cable TV market, Cablevision Systems [NYSE: CVC] plans to take on the two direct broadcast satellite (DBS) providers on their home turf – the sky. Cablevision will use its Rainbow 1 DBS satellite, launched from here July 17, to compete with Hughes Electronics’ [NYSE: GMH] DirecTV and EchoStar Communications [Nasdaq: DISH], said Milt Hildenbrand, Cablevision’s vice president of engineering and technology.

      The satellite could also be used to complement Cablevision’s existing cable TV service in New York, Connecticut and New Jersey, Hildenbrand told a press conference before the successful Rainbow 1 launch by International Launch Services, a joint venture of Lockheed Martin [NYSE: LMT] and Russian firms Khrunichev State Research and Production Space Center and RSC Energia.

      Hildenbrand admitted that it would be an uphill climb for Cablevision. But he said that what his company lacks in numbers of satellites it will make up for in technical sophistication and bandwidth.

      “It’s not just complementing our cable system because the coverage is all of the United States. With this kind of coverage, the satellite is by nature a competitor to the other DBS systems … Stay tuned,” he said.

      Cablevision has been working on the Rainbow satellite for two years and has been thinking about using satellites to deliver programming for at least 10 years. “We can do things with this satellite that makes it not so bad to be third to the [DBS] party. We have no legacy equipment on the ground,” Hildenbrand said. He estimated that the satellite could deliver as many as 468 video channels.

      Hildenbrand disputed claims that the satellite, which will be located at 61.5 degrees West Longitude once its deployment is completed in about a week, would not be able to provide full CONUS (continental U.S.) coverage. He said that some technical adjustments might have to be made for subscribers on the West Coast, and admitted that delivering TV signals to Oregon and Washington could be especially challenging.

      He said that Cablevision had no immediate plans to send up another satellite in case there is a problem with Rainbow 1, which was built for the cable TV operator by Lockheed Martin Commercial Space Systems. With an estimated 18.2-year lifespan, the A2100 spacecraft has 36 Ku-band transponders and 22 programmable spot beams. Hildenbrand estimated that the satellite cost his company $250 million to build and launch.

      Cablevision does not plan to use the Rainbow satellite to offer local broadcast channels because of federal must-carry rules and the amount of capacity that would be required to carry that many local channels. Instead, the company plans to use its terrestrial infrastructure to deliver local channels in the markets it serves with cable TV. “We won’t be using the satellite to deliver the 1,500 or so local signals there are” in the U.S. market. “Local into local [HDTV signals] require an awfully lot of bandwidth, a lot more than we have or anybody else has,” Hildenbrand said.

      The liftoff of the Lockheed Martin Space Systems-built Atlas V-521 took place in the warm breeze of a July evening. There was some leakage of helium from the main tank as the countdown neared completion and there was some concern about “anvil” clouds left over from previous thunderstorms. However, the launch team determined that the leaks were minor and decided to proceed with the launch at 7:45 p.m. EDT, 25 minutes after the launch window opened.

      A bright flash of light illuminated the base of the rocket and smoke billowed from the rocket and engulfed the launch pad, drifting into the blue evening sky. An hour and 40 minutes later, the satellite successfully separated from the Centaur upper stage.

      This was the third Atlas V launch, and the first using two strap-on solid rocket boosters from Aerojet, a unit of GenCorp, and a wider 5.4 meter diameter fairing (nose cone) supplied by Swiss firm Contraves. The 196-feet tall Atlas V used a RD-180 main engine built by RD Amross and a single Centaur upper stage. — Fred Donovan

      (Fran Slimmer, ILS, 646/229-4801; Steve Tatum, Lockheed Martin, 408/742-7531; Susan Bassett, Aerojet, 916/355-2310)

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