Rainbow Media Enterprises, a subsidiary of Cablevision Systems Corp. [CVC], said its year-old Voom satellite service will nearly double its capacity March 2005, and it will increase its current offering of 39 high-definition channels to more than 70 high-definition channels covering the full continental United States. Additionally, the company is planning on adding about 200 standard-definition channels. The capacity will come from the lease of 16 transponders on SES Americom’s AMC-6 satellite.

But the leased capacity is only the beginning for Rainbow and its Voom service. The company also filed a contract with the Federal Communica-tions Commission it recently signed with Lockheed Martin [LMT] under which Lockheed Martin will build five Ka-band satellites for Voom, the first of which is expected to be competed and launched in about three years. With these satellites, Voom will be able to increase its channel capacity to more than 5,000 HD channels when the birds are operating in spot beam mode, with coverage across the entire United States (including Hawaii and Alaska) with what is says is “virtually no capacity constraints.”

Well, it looks to us here at Satellite News like Rainbow is preparing itself to challenge both EchoStar Com-munications Corp. [DISH] and The DirecTV Group [DTV] for marketshare in the direct-to-home satellite market as well as terrestrial cable service providers. The group’s value proposition hinges on its growing offering of high-definition programming, which the company boasts is more than any other cable or satellite operator. The value proposition will increase as more HD televisions penetrate the consumer market and the demand for HD broadcasts increase. But in the short term, it will be Voom’s challenge to just stay afloat while it waits for its satellite constellation to be launched.

(Bo Park, Rainbow DBS, 516/803-6068)