SES AMERICOM Files FCC Petition for New Satellite Television and Internet Platform
Princeton, New Jersey, April 25, 2002 -- SES AMERICOM, Inc., an SES GLOBAL Company (Luxembourg Stock Exchange: SESG; Frankfurt Stock Exchange: SDSL), today announced a major initiative to bring new television and broadband Internet services to the American public. The company has filed today with the FCC a petition to allow it to offer to US television program owners and consumers a new satellite platform, through which any programmer or content creator could provide satellite television services directly to the public.
Dean Olmstead, President and CEO of SES AMERICOM, speaking today at the Satellite Entertainment 2002 conference in Monterey, California, said: "These television services will be provided via a new satellite that we intend to launch into the 105.5° West Longitude orbital slot. Another new SES AMERICOM satellite, at the adjacent 105° W.L. slot, will enable us to provide high-speed broadband connections to U.S. residences. All of these services -- TV and broadband -- will be available to U.S. consumers who purchase a single, small satellite dish and related equipment, into which the latest two-way digital technologies will have been incorporated."
SES AMERICOM intends to offer the new platform, named AMERICOM2Home®, using a license granted to its affiliate by the Government of Gibraltar, relating to an orbital location over the United States at 105.5¼ W.L. This slot falls directly between orbital positions used by DirecTV and EchoStar at 101¼ and 110¼, respectively. Both AMERICOM2Home® and the existing satellites use frequencies in the 12.2-12.7 GHz range, which is set aside internationally for direct broadcasting to the home. SES AMERICOM also holds FCC licenses for both Ku-band and Ka-band satellites at the 105¼ W.L. location.
Olmstead explained that the new AMERICOM2Home® system will be different from the current satellite television services offered by EchoStar and DirecTV. Unlike these providers, SES AMERICOM itself will not offer any retail services to consumers. Instead, Olmstead explained, "We will create a best-in-class DBS satellite platform, on which we expect a wide variety of content providers -- large and small, established and start-up, mass market and niche, advertising-supported and pay-per-view - will lease capacity in order to offer their programs and interactive entertainment directly to American consumers."
This open DBS platform approach is modeled on the success of SES AMERICOM's sister company in Europe, SES ASTRA (SES GLOBAL's European satellite operating company), which operates 12 DBS satellites on which broadcasters and content owners provide numerous free-to-air, pay television, and broadband offerings directly to residences throughout Europe. In Europe, the programmers manage the on-going relationship with the end viewer (offerings, subscription plans, billing, etc.), while SES ASTRA provides the satellite capacity, transmission services and general marketing support.
SES AMERICOM expects the AMERICOM2Home® system to encompass multiple satellites at the 105¼/105.5¼ W.L. orbital slot, creating a satellite ãneighborhoodä at that location. "We should be able to offer both television programmers and Internet service providers a range of satellite service options at the 105¼/105.5¼ location," Olmstead said. "No one in the U.S. market has ever been able to offer the flexible and unique configurations of satellites in one neighborhood' that we will make available to our customers."
Assuming prompt FCC approval of the company's petition, the AMERICOM2Home® system could be in operation as early as 2004. In the intervening period, the company expects to develop its plans in more detail through discussions with a wide range of television programmers, broadcasters, Internet service providers, satellite equipment manufacturers, and others.
About SES AMERICOM
With over twenty-five years experience, SES AMERICOM, Inc. is recognized as a pioneer and leading provider of global satellite communications services currently providing capacity on 16 spacecraft capable of serving the Americas, Europe, the Atlantic and Pacific Ocean Region and Asia. As a member of the SES GLOBAL family AMERICOM is able to provide end-to-end telecommunications solutions to any region in a world. For more information, please refer to our website: www.ses-americom.com
About SES GLOBAL
SES GLOBAL is the world's premier satellite company, born out of the combination of ASTRA, Europe's leading provider of satellite capacity for direct-to-home reception, and AMERICOM, one of the leading Fixed Satellite Services operators based in the U.S.
SES ASTRA and SES AMERICOM are the operating companies of SES GLOBAL, with 29 wholly-owned satellites. The company also owns strategic holdings in first-class regional satellite service providers with 13 additional satellites, which are SES GLOBAL partner companies: AsiaSat and AMERICOM ASIA-PACIFIC in Asia, Star One and Nahuelsat in Latin America, as well as NSAB in Europe. 95% of the world's population live within the footprints of the SES GLOBAL satellite network. In addition, SES GLOBAL holds stakes in satellite technology companies Gilat and NDSatcom. SES GLOBAL shares are listed on the Stock Exchanges in Luxembourg (SESG) and Frankfurt (SDSL). For more information, please refer to our website: www.ses-global.com
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Contact: Monica Morgan
+1-609-987-4143; by mobile +1-609-203-0668
monica.morgan@ses-americom.com
THE AMERICOM2Home® PLATFORM - Questions and Answers
Why is SES AMERICOM undertaking this new initiative?
SES AMERICOM and its parent company, SES GLOBAL, have a strong commitment to the satellite services market, and a belief that residential services are a key component of that market. SES AMERICOM's sister company, SES ASTRA, operates the first and largest DBS platform in Europe. SES AMERICOM is drawing on the experience of SES ASTRA in developing the AMERICOM2Home® model
Are you concerned about being a new entrant in a market with two large, well-established players?
RICOM2Home® platform to everyone, thereby allowing for a wide range of program choices.
Have you conducted any studies to validate demand for these services?
Market studies we have commissioned, as well as third-party studies, confirm that there is strong demand for satellite-delivered multichannel and broadband services. Also, our experience with the ASTRA system in Europe has shown that there is a real market for advertiser-supported satellite TV channels, and we expect AMERICOM2Home® to lead to several new, free television channels that do not exist today. The availability of this free TV will, in turn, give consumers a strong incentive to buy AMERICOM2Home® home systems, creating a community of dishes pointed at our satellites. Programmers will also be able to put together bundles of program offerings, some of which may resemble cable or satellite TV offerings today, but others of which may be narrowly customized for particular niche markets (for example, foreign language or ethnic programming, all-sports programming, a suite of interactive game channels). When you combine these features with high-speed broadband and integrated Internet/entertainment offerings, we are confident that we will be able quickly to build a large community, in the several millions, of satellite dishes pointed at our AMERICOM2Home® platform.
How will your plans be affected by the U.S. Government's decision on the EchoStar/DirecTV merger?
Not at all. We intend to proceed with the AMERICOM2Home® platform regardless of whether that merger is approved. We do think that -- especially if the merger goes forward, but even if it does not -- there is a real need for more competition in the provision of multichannel video programming to U.S. residences. For this reason, we believe that the FCC will promptly find that our AMERICOM2Home® proposal for new competition is very much in the public interest.
How did you obtain your rights to the 105.5¼ W.L. slot?
SES AMERICOM has had a longstanding involvement with Gibraltar, where we operate a satellite control center. The Government of Gibraltar has previously authorized SES AMERICOM's Gibraltar subsidiary to launch a satellite at another location. The Government of Gibraltar, through the United Kingdom, has filed with the International Telecommunications Union at 105.5¼ W.L. in the 12.2 ö 12.7 GHz frequency bands, and we recently received an amended license from Gibraltar to include this filing.
Doesn't your system pose a risk of interference to users of the DirecTV and EchoStar systems, which are in adjoining orbital slots?
We have studied this issue very carefully and have retained an independent engineering consultant who is among the most respected in the satellite industry. Our conclusion, and his, is the same: there is no real possibility of harmful interference to DirecTV and EchoStar users. Of course we expect to have dialog on this question with DirecTV's and EchoStar's engineers. We are convinced that, once they review the facts -- and assuming that they are not seeking to keep out a new and innovative competitor -- they will agree with us that they and their users have no cause for concern with respect to interference.
Do you expect the FCC to have any difficulty with your petition?
We have met with the FCC's staff about this proposal, and they have indicated that they will welcome new competition in the DBS industry. Of course, they will also want to understand the interference issue, but, as discussed above, we do not expect any problems on that front. The FCC has established procedures, with which we will comply, to review and approve the provision of service to U.S. consumers from a foreign-licensed satellite. It should be noted that both Gibraltar and the United Kingdom permit U.S. satellite operators to offer capacity for similar uses.
Will SES AMERICOM provide local television channels as part of the AMERICOM2Home® system?
SES AMERICOM will not itself provide any television or entertainment channels of any kind. As discussed above, we expect to provide an open platform on which capacity will be leased to those wishing to offer both free and subscription channels to the American people and to customers in the Caribbean. Television broadcasters would certainly be welcome to lease capacity for this purpose.
But won't you have a legal obligation to carry local TV channels?
We will be operating an open platform, instead of being vertically integrated like EchoStar and DirecTV, and the rules on local-into-local will not apply to us, although they may apply to some of our content providers. We understand the importance of local television broadcasting, and we will seek to find ways to facilitate the availability of local TV channels within the AMERICOM2Home® system. It should be pointed out, however, that SES AMERICOM would have just one DBS orbital location, in contrast to the several orbital slots authorized for use by EchoStar and DirecTV. In order to provide full local-into-local programming, we would need some access to the EchoStar and/or DirecTV satellite systems for our AMERICOM2Home® subscribers; such access could be accomplished as a technical matter, if the other DBS companies are willing to work cooperatively with us.
How many channels do you expect the AMERICOM2Home® platform to carry?
We will be optimizing our satellite for DBS, and expect to carry hundreds of channels. We know that, in order to succeed, we have to be not just as good as, but better than, our cable and satellite competitors. We will be better, not just in the quantity of our channels, but also in the quality, and in the entire viewer experience.
What about interactive TV?
The availability of two-way interactivity is a cornerstone of our AMERICOM2Home® planning, and a key reason why we believe AAMERICOM2Home® will succeed.
We envision a seamless two-way experience for the viewer, with the potential entirely to change how we all watch TV. SES AMERICOM will make it work through broadband functionality, taking full advantage of the enormous power of the Internet and Internet protocols.
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How do your AMERICOM2Home® plans relate to your licenses from the FCC for Ka-band satellites?
One of those licenses is for the 105° W.L. orbital location, and that Ka-band slot is critical to our plans. The DBS satellite at 105.5° W.L. will provide one-way television and entertainment services, operating on Ku-band frequencies set aside internationally for broadcasting satellites. We will then have a second satellite, operating on Ka-band frequencies, at 105° W.L. It is from this second, Ka-band satellite that consumers will receive two-way Internet and broadband services in their homes. The proximity of the two satellites (just one-half degree apart) will enable consumers to use a single dish, and to have a full range of two-way interactivity. The consumer will not have to switch among satellites and indeed will not even know (unless he or she cares to research it) that two satellites are involved.
What have you done about developing customer premises equipment (CPE)?
We envision a quite compact consumer terminal or ãdishä (about 45 cm for one-way BSS service; slightly larger for two-way broadband) that, together with the in-the-house unit (often known as the ãset-top boxä), will provide the user with far more functionality than any DBS system to date. Again, we will draw on the experience in Europe, where there has been widespread development of advanced two-way satellite CPE for residences. As in Europe, there may be different levels of AMERICOM2Home® available, going from lower-priced units capable of receiving the free-to-air and pay-per-view channels, to much more sophisticated units with two-way broadband functionality.
Will you subsidize the CPE? What about other costs to the consumer
CPE pricing will be a component of the service offerings provided by our customers, not AMERICOM2Home®, but we should be clear on two facts: that the AMERICOM2Home® system will be designed to be efficient and highly cost-effective; and that we will be competitive with other multichannel offerings in the marketplace. Also, because of the programming flexibility inherent in the open AMERICOM2Home® platform, many consumers will likely pay less for satellite TV than they do today to DirecTV or EchoStar, both of which require each subscriber to purchase a bundle of programming that typically contains many channels of no interest to the subscriber.
Have you selected an equipment provider for the CPE, or a satellite manufacturer?
We have had discussions with many of the leading equipment manufacturers, as well as with the several companies that build communications satellites. We have not selected satellite vendors at this point, but we expect to be intensively engaged in this process over the next several weeks. We will be ready to move ahead with satellite manufacturing very quickly after securing FCC approval. As for CPE vendors, we will help coordinate their discussions with potential program and content suppliers.
Have you had discussions with potential program providers or Internet service providers?
Most of the leading owners of television programming, as well as many Internet service providers, are SES AMERICOM customers on our existing satellites. We will certainly be talking with them about AMERICOM2Home® in the months to come.
How will the AMERICOM2Home® project impact SES GLOBAL's financials
We have prepared budgets for the AMERICOM2Home® project, and are confident that it will be profitable within a relatively short time after the satellite is operational. There will, of course, be significant capital expenditures in constructing and launching the satellite, as well as expenditures associated with developing the CPE. We will be prepared to provide the relevant financial information in due course as part of the projections disclosed publicly from time to time by our parent company, SES GLOBAL.
When do you think the AMERICOM2Home® system will be operational?
The first timing issue relates to the FCC process; we will not proceed with large expenditures on construction of a DBS satellite until we have assurance from the FCC that we will be able to access the U.S. market. We are hopeful that we will have this assurance within a few months. Assuming that we do, we would expect to commence construction of the satellite shortly thereafter, and to launch the satellite in 2004.