As with any year, 2006 will be defined by beginnings and ends. As they apply to the satellite industry, and while there is much yet to be ascertained about what any one or every one may mean in the future, only more time will tell. Nevertheless, a representative if not comprehensive review of the past year’s headlines, subplots and bottom lines may provide a barometric indication of how the wind is blowing, and a compass needle’s suggestion as to where things stand, and in which direction one may wish to proceed.

January

Sirius Gets Stern: Some 14 months after signing a five-year contract, Howard Stern finally began broadcasting on Sirius Satellite Radio. For Sirius, the hype created by Stern’s move from free radio to satellite was good for business. Actually, it was great. When Sirius announced that it signed Stern in October 2004, "we had 662,000 subscribers," said Jim Collins, Sirius vice president of corporate communications. At the time, Wall Street analysts predicted that Stern would help Sirius sign up "2 million subs by the end of 2005,"he added. "In fact, we exceeded 3.3 million subs." Those sales triggered a $225 million stock payout to Stern, the companies announced.

Meanwhile, XM Satellite Radio surpassed 6 million subscribers.

Dish Signs 12 Million: Starting out the year, Dish Network announced having signed up 12 million customers. EchoStar Communications Corp. reported that its Dish Network passed the milestone in late December. Having reached its first million subscribers in December 1997, Dish Network passed 11 million customers in January 2005, adding more than 6.7 million net new customers throughout the previous five years.

GeoEye Focuses On Top Commercial Spot: Orbimage finalized acquisition of its rival Space Imaging, creating an imagery satellite operator with a pair of spacecraft capable of producing high-resolution images and a third satellite with even better resolution planned for launch in early 2007. The new entity, dubbed GeoEye, automatically became the world’s largest commercial satellite imagery company, with combined revenues of about $160 million in 2005.

February

Boeing Tapped For Fourth Wideband Gapfiller Satellite: A $148 million contract for the fourth satellite in the Wideband Gapfiller Satellite system was given from the U.S. Air Force to Boeing. Already under contract to build the first three satellites for the system, the Air Force authorized Boeing to begin engineering and procurement of parts for the fourth spacecraft. The first Wideband Gapfiller satellite is slated for launch in June 2007.

March

SpaceX Cites Fuel Leak For Falcon 1 Failure: A fuel leak shut down the main engine of Space Explorations Technology Corp.’s (SpaceX) Falcon 1 rocket, and the vehicle crashed less than a minute into its inaugural mission. The fuel leak of unknown origin ignited a fire near the top of the main engine shortly after liftoff, as SpaceX CEO Elon Musk wrote on the company’s Web site.

The fire cut into the first stage helium pneumatic system, and the resulting loss in pressure closed valves in the engine, shutting it down less than 30 seconds into the flight. No other problems with the vehicle were reported. The U.S. government would conduct an anomaly investigation, and Musk hoped to conduct another launch of the Falcon 1 within six months.

April

Intelsat Rolls Out Ampiage: Intelsat CEO David McGlade announced the company’s launching Ampiage, a new, satellite-based, open-architecture, content delivery and management service. Ampiage would target telcos wishing to enter the IPTV market and cable operators in the U.S. McGlade was bullish about the operator’s prospects in the IPTV market, saying "I don’t think this will be a difficult market for us to be successful, because we have such a strong background in all the areas that are critical here. We understand what our customers need."

May

GAO Criticizes Handling Of TSAT Program: A U.S. Government Accountability Office (GAO) study released May 24 found the Department of Defense (DoD) failed to meet original cost, schedule and performance goals established for the Transformational Satellite Communications (TSAT) program to provide warfighters with Internet-like communications capabilities.

Though the Pentagon’s original 2004 estimates put TSAT’s total acquisition cost at $15.5 billion and the first satellite in April 2011, TSAT’s latest formal cost estimate called for nearly $16 billion with initial launch slipped to September 2014.

The DoD called for a restructuring to field the satellite network with lower-risk blocks, and improvements incorporated incrementally.

June

Pentagon Saves NPOESS Cancellation: The multi-billion-dollar National Polar-orbiting Operational Environmental Satellite System (NPOESS) was saved from potential cancellation when U.S. Department of Defense leaders restructured the troubled program by reducing the number of satellites and sensors. Led by Northrop Grumman Corp., with input by Raytheon Co., NPOESS costs had soared beyond cost-overrun limits set in the Nunn-McCurdy Act. The program to combine weather satellite programs operated by the U.S. departments of Commerce and Defense was $7 billion over budget with launch of the first spacecraft three years behind schedule.

A "restructured" NPOESS program was allowed to proceed as a downsized platform, with cost increases partially offset by cost savings that involved scrapping some planned sensors and using data from a European constellation of satellites. Prime contractor Northrop Grumman was allowed to continue on the NPOESS contract, barring further huge cost increases, but the decision also lost Boeing some of its sensor work. The certification applied to the cost overruns as they were then estimated, and would not absolve Northrop Grumman were there further cost overruns.

July

Rocketplane Kistler Partners With Orbital … Briefly: Rocketplane Kistler and Orbital Sciences Corp. formed a partnership to compete in NASA’s Commercial Orbital Transportation Services (COTS) program and develop other applications for Rocketplane’s space transportation system. Within two months, however, Andrews Space Inc. would replace Orbital in the effort to demonstrate the ability to loft cargo, and eventually crew members, to the International Space Station (ISS). Rocketplane Kistler did not comment on the reason Orbital left the COTS effort.

August

$5 Billion U.S. Army Contract Goes To Six Companies: Boeing, General Dynamics and four small businesses won the U.S. Army’s five-year, $5 billion worldwide satellite systems contract. DataPath of Duluth, Ga.; D&SCI of Eatontown, N.J.; Globecomm Systems of Hauppauge, N.Y.; and TeleCommunications Systems of Annapolis, Md., were the other players involved in the indefinite-delivery/indefinite-quantity contract, through which each vendor was required to bring turnkey commercial satellite systems and associated support services for satellite terminals, including all hardware, software, services and data to operate the terminals. Both Department of Defense (DoD) and other agencies could order from the contract. Army officials said the products and services would support all federal communications missions, including disaster relief and homeland security initiatives.

Colorado Senators Call To Investigate DirecTV/Echostar Dispute: Colorado’s two U.S. senators asked the Senate Judiciary Committee to investigate DirecTV and EchoStar’s dispute over the rebroadcasting of local channels. In a letter, Sens. Wayne Allard (R) and Ken Salazar (D) asked the committee to examine whether DirecTV and owner News Corp. have "engaged in behavior that would threaten the viability of the satellite TV market." DirecTV is based in El Segundo, Calif., while Echostar is headquartered in Englewood, Colo.

‘World’s Remotest Island’ Gets Internet: Deemed by the Guinness Book of World Records as "the remotest inhabited island in the world," British protectorate Tristan da Cunha, seat of a four-island archipelago, was finally included in the British Government’s Foreign and Commonwealth Office’s satellite-based communications network. Loral Skynet and Global Crossing teamed to provide extension of the U.K.’s global-communications network (with infrastructure already in 140 countries) to include the territory, located some 6,000 miles from the United Kingdom and 1,750 miles from Cape Town, South Africa, its nearest postal distributor.

September

Lockheed Martin Sells ILS Interests: Citing "an obligation, like any well-run company, to gauge the business environment and do what is necessary and take advantage of opportunities that will benefit the company," Lockheed Martin Corp. announced it would sell its share of the International Launch Services (ILS) joint venture to consultant Mario Lemme, who had been an advisor for Lockheed Martin and served on ILS’s board for more than three years. Lockheed Martin would sell its ownership interests in ILS and Lockheed Khrunichev Energia International Inc. (LKEI) to Space Transport Inc., a company being set up by Lemme in the British Virgin Islands. Terms were not disclosed, but Space Transport would acquire Lockheed Martin’s 51 percent interest in LKEI.

ILS was a 50-50 joint venture between Lockheed Martin and LKEI, which meant Lockheed Martin was selling more than 75 percent of ILS.

Telesat Canada Names President/CEO, Files IPO: Daniel Goldberg, former president and CEO of SES New Skies, was named president and CEO of Telesat Canada, Canada’s largest satellite services provider. A week later, Telesat Holding Inc. and its shareholder BCE Inc. announced filing a preliminary prospectus and registration statement for an initial public offering (IPO) of non-voting shares of Telesat Holding Inc. in Canada and the United States.

October

Echostar Settlement Scrapped: The U.S. District Court in Miami voided a proposed settlement that EchoStar Communications Corp. had reached with several TV stations to allow the satellite-TV company to continue broadcasting local network channels, EchoStar announced Oct 23. Two months earlier, EchoStar announced a deal to pay $100 million to end a nine- year litigation with ABC, NBC, CBS and Fox affiliate associations over the rebroadcasting of local TV programs. The agreement would have allowed EchoStar to continue broadcasting local network channels and potentially expand its offerings. U.S. District Judge William Dimitrouleas issued an injunction Oct. 20, as the Fox network — whose parent company News Corp. also owns DirecTV, EchoStar’s chief competitor– persuaded the judge to void the pact and immediately stop EchoStar’s sending signals nationwide of local sports or other network programming to an estimated 800,000 subscribers. Within a month, DirecTV would run a nationwide promotion offering $150 cash back to "assist Dish Network customers losing their distant network channels." EchoStar, noting it had reached settlements "with seven of the eight plaintiffs, representing approximately 90 percent of all TV network stations in the United States," pledged to try and prevent consumers from losing their distant network channels. At the time of the ruling, EchoStar had more than 12.5 million subscribers, fewer than one million of whom subscribed to distant network channels.

U.S. Air Force, Boeing Ink $1 Billion Wideband Gapfiller Contract: The U.S. Air Force announced Oct. 17 it had set terms for a $1.1 billion contract with Boeing for the Wideband Gapfiller Satellite program. The newly defined Block 2 contract followed a February deal to let Boeing begin engineering and advance procurement for the communications satellites. The contract provides options for a second block of satellites in the system, a follow-on to the first block of three spacecraft. The second block will feature a new technology to feed extra bandwidth to spy planes and other surveillance platforms.

While Boeing would start on the fourth and fifth satellites this year, they were not expected to launch until at least 2011, according to the Air Force’s schedule.

DirecTV Expands Local HD Programming: DirecTV announced plans to roll out 25 local high-definition (HD) broadcast networks by year’s end, giving it access to 67 markets representing approximately 74 percent of U.S. TV households.

November

Virtual Earth 3D Takes Shape: Microsoft Corp. launched its new Virtual Earth 3D service on Nov. 6, offering a new perspective on Microsoft’s Live Search Map, a free, online local search and mapping service providing worldwide road and aerial maps with unique, bird’s-eye-view imagery for select metropolitan areas. Initially available for 15 U.S. cities, Virtual Earth 3D offers users realistic, hybridized images of buildings rather than gray boxes, Microsoft said; the software giant planned to make 3-D imagery available for 100 additional cities by summer 2007. Touted as the beginning of a 3-D Web, Microsoft called its product a quantum step beyond competitor Google Earth’s 3-D technology because of advanced imaging features. Satellite operator GeoEye, a key provider of imagery to Microsoft Virtual Earth (as well as its competitor Yahoo), was planning its next-generation imagery satellite, Geoeye-1, for early 2007 to capture images with a ground resolution of 0.41 meters in black-and-white and 1.65 meters in color.

December

Telesat, Loral SkyNet Plan To Combine: The Fixed Satellite Services (FSS) business of Loral Space & Communications Inc. and Telesat Canada announced they would combine as a new Canadian company to become the fourth largest operator in the world. The agreement called for Loral and its partner, Canada’s Public Sector Pension Investment Board (PSP Investments), to acquire 100 percent of the stock of Telesat Canada from parent company BCE Inc. for $2.8 billion as well as the assumption of $148 million in debt. The combined operations of Telesat and Loral Skynet would consist of 11 satellites with four additional spacecraft scheduled to be placed into orbit throughout the next three years. The combined operations recorded revenues of $568 million in the year ended Sept. 30, and the new organization, dubbed Telesat, would have a backlog of $4.9 billion, the companies reported. Daniel Goldberg, president and CEO of Telesat, would serve as CEO of the new organization, headquartered in Ottawa.

WildBlue Takes Off Yonder: Denver-based broadband Internet provider WildBlue Communications launched its WildBlue-1 satellite on Dec. 8 aboard an Arianespace Ariane 5 vehicle also carrying SES Americom’s AMC-18 satellite.

Slated to become fully operational at 111.1 degrees West in March 2007, WildBlue-1’s launch marked "a watershed development" for the company, according to CEO David Leonard. While his company had attracted more than 100,000 subscribers throughout the United States since launching commercial operations to small cities and rural America in June 2005, WildBlue-1’s capacity offered the company’s providing broadband for as many as 750,000 customers down the road, he said.

"We’re growing at the rate of about 8,000 subscribers per month," said Leonard, with WildBlue using full capacity aboard Telesat Canada’s Anik-F2 satellite. "WildBlue-1, at a minimum, will double, and probably triple, that by the third or fourth quarter [of 2007]."

Sirius Tops 6 Million: Sirius reported that it ended 2006 with 6.02 million subscribers, and achieved its first-ever quarter of positive free cash flow in the fourth quarter to meet expectations.

ULA Sends First Launch: In the first mission for the newly formed United Launch Alliance (ULA), a Delta 2 rocket placed a classified payload into orbit on Dec. 14 for the U.S. National Reconnaissance Office. The ULA, jointly owned by Boeing and Lockheed Martin, began operations Dec. 1. Overall in 2006, Boeing and Lockheed Martin performed a combined 11 missions for the U.S. government; the 2007 manifest consisted of 21 planned missions: 12 Boeing Delta 2 launches, three Delta 4 missions and six Lockheed Martin Atlas 5 launches.

Rumors Swirl Of Murdoch Swapping DirecTV: Back in September, published speculation revolved around whether Rupert Murdoch was considering divesting his interests in DirecTV and led to questions about what it would mean to the satellite TV industry at large. Two months later came word of Liberty Media Corp. entering into a definitive agreement to exchange its 16.3 percent stake in News Corp. for News Corp.’s 38.5 percent stake in DirecTV Group Inc. DirecTV President and CEO Chase Carey was expected to remain with the company, and Liberty would appoint directors to replace board seats held by News Corp. representatives. Pending regulatory and News Corp. shareholder approvals plus a ruling from the Internal Revenue Service, the transaction was expected to close in mid-2007.

Meanwhile top executives at both DirecTV and Echostar spoke about their interactive plans. Both operators were embracing interactivity and were launching a plethora of new interactive services. Eric Shanks, executive vice president of DirecTV Entertainment outlined some of DirecTV’s plans. He said, "Over the next 12 months, we will launch our broadband video-on-demand service and will also have broadband connectivity in the box to get even more two-way rich interactivity. You will also be able to use your mobile phone to program your DVR."