European firm deals blow to Internet-by-satellite
Friday October 13, 9:33 am Eastern Time
By Richard Baum
LONDON, Oct 13 (Reuters) - A leading provider of high-speed Internet services via satellite is relaunching as an interactive broadcaster after concluding the technology cannot be used for Web surfing.
The decision by Luxembourg-based Europe Online is a blow to hopes that satellites could bring fast Internet connections to rural communities shunned by fixed-line operators.
The two-year-old company, run by a former head of Walt Disney Television, uses the Astra satellite to beam Internet content to 15,000 customers across Europe.
Although the technology theoretically can provide fast download speeds, the service slows considerably as the number of users rises. Furthermore, data from the user's computer is sent over a normal dial-up modem.
Europe Online believes the two constraints make high-speed Web surfing impossible, despite the claims of U.S. rivals like Hughes Electronics Corp (NYSE:GMH - news).
``High-speed Internet access simply does not work with satellite,'' Europe Online spokeswoman Simone Steinmetz told Reuters. ``It's a bad use of satellite capacity.''
Satellite held out the hope of broadband Internet for the large parts of Britain unlikely to get cable or DSL (Digital Subscriber Line) services.
British Telecommunications Plc (quote from Yahoo! UK & Ireland: BT.L) plans to offer DSL, which converts ordinary telephone lines into fast Internet connections, to no more than 75 percent of the population by 2002.
Europe Online's rethink has prompted its main distributor in the UK, Eurosky, to stop selling the product.
The Luxembourg company is relaunching on November 1 as an Internet-based multimedia entertainment network, starting in Germany and then in France. It will beam television broadcasts, including programmes from its own studio, to computers connected to a 60 cm (24 inch) satellite dish.
Later it plans to provide services through set-top television boxes. The company hopes to have 50,000 customers by the end of the year.
Europe Online's chief executive is Dennis Hightower, who was president of Walt Disney Television from 1987 to 1996. The company is owned by U.S. and European venture capitalists. |
