Wednesday, January 19, 2005

Cablevision to Sell Satellite Unit to Echostar for $200 Million

EchoStar Communications agreed to acquire Cablevision's direct broadcast satellite and certain other related assets for $200 million. The deal includes the Rainbow 1 satellite, located at the 61.5 degree W.L. orbital position, as well as FCC licenses to construct, launch and operate DBS services over 11 frequency channels at the 61.5 degree W.L. orbital location. In addition, EchoStar will acquire the contents of Rainbow DBS's ground facility in Black Hawk, S.D. and related assets.

The EchoStar III satellite is also located at 61.5 degrees West Longitude and is currentlyu used to broadcast DISH Network TV programming using DBS spectrum controlled by EchoStar at that location. Echostar said it is assessing how the Rainbow satellite's flexibility can best be utilized to enhance DISH Network's existing service.

Cablevision said it will continue to explore strategic alternatives, including monetization, for its remaining Rainbow DBS related assets, including programming, equipment and spectrum.

VOOM will continue to provide service to its current customers during a transition period.

  • Rainbow DBS provides the VOOM HDTV service, currently featuring a lineup of 39 HD channels -- more HD programming than any other satellite or cable service provider in the U.S.. Starting in March VOOM satellite programming was expected to increase from its current total of 130 channels to 355 HD and SD channels. The HD lineup would grow from 39 channels to 71 channels. To facilitate the expansion, VOOM is leasing 16 transponders on the SES Americom AMC-6 satellite, which VOOM refers to as "Rainbow 2." VOOM uses MPEG-4-capable set-top receivers developed with Motorola.

  • In November 2004, Rainbow DBS Company LLC, a subsidiary of Cablevision Systems, selected Lockheed Martin (to build its next five geostationary telecommunications satellites. The five new satellites, designated Rainbow Ka-1 through Rainbow Ka-5, will provide direct broadcast services across the continental United States (CONUS), Alaska and Hawaii. Terms of the agreement were not disclosed.

  • EchoStar Communications' DISH Network satellite television service added approximately 350,000 net new subscribers during Q3, giving the company a total of 10.475 million subscribers.


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