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The uphill fight to merge EchoStar Communications Dish Network with Hughes Electronics DirecTV gets tougher when you factor in competition from an upstart that has no satellites, but plenty of friends in high places.
Northpoint Technologies – no relation to defunct competitive telecom carrier NorthPoint Communications – seeks to piggyback on the spectrum used by satellite broadcasters to carry its own land-based video and communications signals.
Called Broadwave USA, the service would allow people to take an off-the-shelf satellite dish, point it North and receive 60 to 90 television channels for $20 per month. Broadwave also plans to offer high-speed Internet service for an additional $20 per month.
Although Broadwave subscribers would use satellite dishes, the signals would actually come from land-based transmissions to the North. The technology is based on the idea that signals from satellites over the equator leave the same spectrum available from the North.
Critics said the concept is fatally flawed and would disrupt the satellite broadcasters signals. Lobbying groups such as the Satellite Industry Association have fought to keep Northpoint out of the satellite business.
But the upstart company has powerful friends, including lobbyists from Washington, D.C.s top law firms and former officials in the Reagan and elder President Bush administrations.
Northpoint President Sophia Collier is an investor with a background in consumer product marketing. She is also chair of an investment company, Citizens Advisers, with seven portfolios and private funds totaling more than $1.8 billion in assets.
As the Federal Communications Commission begins deliberating on the potential merger of Dish Network and DirecTV, satellite broadcasters fear that approval might require some deal in which they share their spectrum with Northpoint or another rival with a similar technology, MDS America.
Civil rights and consumer groups have filed a petition at the FCC in support of a Broadwave license for video and Internet services.
FCC Chairman Michael K. Powell named W. Kenneth Ferree to head an intra-agency team of FCC officials to review the satellite merger. Ferree is chief of the Cable Services Bureau and future Media Bureau.
“Given the significant concentration that would result from this transaction, it will be rigorously scrutinized by this team and the commission,” Powell said.