Cablevision Outlines Satellite Plan

[Gregg Lengling]

 http://www.newsday.com/business/ny-bzcab202932065sep20,0,87152.story  

Cablevision Outlines Satellite Plan
In FCC filings, says it plans hundreds of old, new channels
By Harry Berkowitz
STAFF WRITER

September 20, 2002

Cablevision Systems Corp. has outlined to regulators an ambitious plan for a satellite TV service offering hundreds of old and new channels ranging from Full Frontal Fashion to MGM Classics to foreign channels such as Al-Jazeera.

The company, which said last month the venture could cost less than $500,000 or as much as $2 billion, is continuing to expand its proposed scope, according to new filings with the Federal Communications Commission.

It is doing so even though Cablevision overall, which is the biggest cable operator in the New York City metropolitan area, is trying to close a funding gap of up to $1 billion in its budget for next year.

The FCC filings fill in many pieces of the puzzle that Cablevision chairman Charles Dolan and president James Dolan have refused to discuss publicly.

The plan also may help explain recent hints by Charles Dolan that he might be willing to sell at least some of the company's cable TV systems, possibly to Time Warner Cable, or form a joint venture including them.

Analysts have criticized Cablevision for pursuing the satellite venture, which would pit a new satellite service against cable TV services across the country. Satellite TV, which includes 18 million EchoStar and DirecTV subscribers, is the chief competitor to cable TV, which has 70 million customers.

Despite the wide array of TV channels listed by Cablevision in the FCC filings, including 16 focused on sports, 60 with foreign language fare, dozens featuring films, 11 covering news, 10 offering music and five with religious programming, there is no YES, given Cablevision's failure to sign a deal with the Yankees network.

The Cablevision service, called HD-SAT (for high-definition satellite) in a prototype brochure, would use 13-inch home satellite dishes, smaller than the 18-inch or 27-inch dishes now commonly used. To accommodate the plan, Cablevision has proposed to the FCC that satellite TV providers EchoStar and DirecTV, which are seeking to merge, be required to forfeit a big chunk of transmission frequencies to the venture. Cablevision said EchoStar should also provide room on one of its satellites so the venture could expand beyond the capacity of Cablevision's own A2100 satellite, which is being built by Lockheed Martin for launch next March.

Cablevision representatives met twice in the past week with FCC representatives to explain why the company should get rights to 17 extra satellite frequencies from EchoStar, in addition to two that are unallocated and 11 for which Cablevision already has rights.

Cablevision said the extra frequencies would enable it to reach all 210 "designated market areas," or major TV markets, across the country, rather than just 143. The expansion would allow it to include 40 high-definition channels nationwide as well as 320 standard-definition channels, plus four regional channels in each of 22 regions of the country and local channels in each of the 210 DMAs.

The proposed merger of EchoStar and DirectTV owner Hughes Electronics, which is part of General Motors, has run into fierce resistance from critics who say it would reduce competition. Cablevision is using that opposition to say its proposal may help solve the problem by creating a new competitor.

But EchoStar, which along with DirecTV controls more than 100 frequencies, says it has its own plans for the frequencies Cablevision wants, including more local TV stations, high-speed Internet service, high-definition TV and more international channels.

The Cablevision venture's high-definition channels could include a new one called MGM Classics featuring the studio's thousands of old movies, according to a prototype programming menu in the filings. MGM, which has a 20-percent stake in four networks controlled by Cablevision including AMC and Bravo, has been seeking to launch a new cable network featuring films.

Another channel, called Full Frontal Fashion, would likely be similar to the fare provided by Cablevision on the Metro Channel in New York. Other new channels on the roster include AMC Monsters, Bravo Performance, Comedy Theater and Sports Theater.

"The Dolans start out against a very steep curve because of the existing competition," said Jimmy Schaeffler, an analyst at pay-TV researcher The Carmel Group. "But Chuck Dolan has been in this business a long time and has come up with a lot of brilliant solutions to some overwhelming challenges."

Cablevision's proposal would include giving the venture the rights to six unused frequency licenses owned by Dominion Video Satellite, which transmits Christian religious and information programming on two other frequencies. Dominion, which sub-leases the six channels to EchoStar, says in FCC filings that it has been unable to talk to Cablevision about the idea because EchoStar, despite repeated requests from Dominion, has not agreed to do so.