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Technology Stocks : Primestar/TCI Satellite (TSATA)

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To: Goodboy who wrote (54)9/4/1998 9:07:00 AM
From: Noel  Read Replies (1) of 442
 
DTV actually has an in-orbit spare in place right now. They are using DBS-1, 2 and 3 to broadcast the service, but they only need two birds to make things work. What they are doing now is "cross-strapping" the transponders to boost up their power output. The benefits from an added compression point of view are marginal, however. Their real gain is a signal strength boost that backs off rain fade. If they were forced to reconfigure with the loss of one bird, they would simply slightly reduce the number of PPV channels.

USSB is a crapshoot. They are only on one bird, DBS-1, so they only have a 1/3 exposure. However, if the worst happened and DBS-1 went down, it would be interesting to see what would happen. I don't think that DTV would want its subs to go without the premium channels. However, they might be able to leverage USSB into some kind of subordinate position. It would be a white-knuckle play, but one scenario could see DTV walk away with the whole broadcast position and USSB relegated to some back-office role. Not the most likely, of course, but one hypothetical.

Secondly, while DISH, DTV and Primestar will all suffer solar outages, all the cable companies will be affected too, since they receive their signals from satellites at the headend and only then does the distribution path become terrestrial. Granted, the DBS guys will also have an additional outage when the sun moves behind each of the provider's broadcasting positions, but the total duration of these outages will be 5-10 minutes at worst. Also, all the DBS players are pretty savvy about keeping customers informed by pre-programmed messages displayed on their screen. DIRECTV, for instance, has a screen pop that actually says "sun outage" right on it (obviously downloaded in advance) and advises the customer that their service will be restored in a moment. And solar outages occur during off-peak hours. Many people are still unaware of them at all.

Since you pointed out that you have done extensive research to prepare your report on the upcoming space events, let me float to you the potential "worst case" situation: the failure of Galaxy V. For those who don't know it, Galaxy V carries the commercial distribution of the most core cable services of any single satellite. In the event that Galaxy V was lost, channels like ESPN, CNN, TBS, TNN, etc. would simply go off the air, both with DBS and CABLE TELEVISION.

Interestingly, if Galaxy V failed, the DBS guys would find themselves with the best position. Since the entire country would be affected, no one would blame DBS. But think what happens next. The programmers would scatter, since each has their own backup plans. Panamsat (the current owner of Galaxy V) has already used their in-orbit spare (to replace Galaxy IV). The DBS providers, by virtue of their elaborate centralized broadcast facilities, would only have to repoint at one location to restore service. Within hours of a cable programmer restoring service on a different satellite, the DBS guys would all have the service back on the air.

For Cable TV, however, the outages would last much longer. For starters, many cable headends would simply lack the facilities to view the number of satellites necessary to restore all services. Their subscribers would have to wait while additional equipment was ordered. And each headend would have to perform each and every repoint separately. There are over 10,000 cable TV headends nationwide. TCI alone accounts for nearly 20% of them. The loss of these services would be in the news for weeks, and DBS would start to look awfully good to the general public, not to mention the individual programmers themselves.

In short, whether cable likes to acknowledge it or not, the entire cable programming business is dependent on satellite. No one knows for sure what will happen, but cable itself is every bit a vulnerable to this situation as DBS (although I agree on Iridium being a short).
Who will be exploiting who remains to be seen...

Regards,

NOEL

ps. feel free to use all this good Galaxy V stuff to supplement your report. It is on the house. Of course, I'd love to hear what NASA thinks of THAT scenario!
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