Los Angeles Daily News
LOS ANGELES _ While most companies are scrambling to build
access lines to the information superhighway by land, Hughes
Aircraft Co. is taking to the sky in a billion dollar venture to
offer cable services directly to viewers.
Los Angeles-based Hughes thinks it can get a jump on the
competition by using its satellite-building expertise it acquired
through Pentagon contracts to wire the U.S. from the air, not on
land through fiber-optic cables.
Hughes began selling satellite dishes to customers in the
first of five initial markets, in Jackson, Miss., on Friday.
Service was available to Jackson residents when they purchased
dishes, spokesman Tom Bracken said.
Service is expected to be available nationwide this fall.
Eventually, other Hughes entities are expected to begin
offering such products as computer data transmissions and video
telephone services via satellite.
"Once you get this system up, you can cover anywhere in
America," said Jerry Farrell, executive vice president for Hughes
Communications Inc., which oversees most of the company's
activities in this field. "With fiber optic, you have to start at
one end and go to the other."
The company's venture in satellite-driven consumer technology
has captured the attention of the corporate chieftains of
Hughes's parent, General Motors Corp. GM decided to hold its
annual shareholders' meeting in one of DirecTV's first markets,
Shreveport, La., on May 20.
The "information superhighway" _ a euphemism for an expected
explosion in entertainment and data routed to homes and
businesses via cable, telephone and computers _ is causing
numerous companies to invest heavily to provide such services.
Pacific Bell, for example, is spending $21 billion to rewire
8.5 million California homes with fiber-optic lines _ essentially
the superhighway's infrastructure. While some homes in a handful
of communities will be ready this year, Pacific Bell said it will
take until 2010 to rewire the whole state.
"We're not going to get to everyone right now," said Steve
Harris, Pac Bell spokesman. "For some folks, satellites may make
sense for a while."
But Harris and analysts say there are several disadvantages
for consumers in taking the satellite route. Consumers must
invest in satellite dishes or antennas costing up to $1,000
apiece before getting on line.
And once Pacific Bell's services are available, it will be
easier for users to interact or hold two-way communications with
one another than they would over the airwaves, Harris said. Using
airwaves could create interference that users will not get on
fiber-optic cable, he added.
Analysts say Hughes must address additional problems before it
can successfully offer satellite television services or get its
data services off the ground.
The first is Hughes' lack of expertise in cost-driven
commercial markets. The company has $9 billion in annual sales,
$7 billion of which is in Pentagon contracts.
"The aerospace/defense industry has never estimated anything
correct in terms of time or in terms of money," said A. Michael
Noll, professor at the University of Southern California
Annenberg School of Communications.
But with the downturn in defense spending, the company has
shifted to commercial work.
Hughes's first trip on the superhighway _ the launching of
DirecTV service _ will begin in five initial markets. Along with
Shreveport, they are Tulsa; Little Rock; Jackson, Miss.; and
DirecTV will offer satellite television service that includes
an array of cable channels, sports programming and pay-per-view
movies. DirecTV launched one of its two satellites in December
and will launch the other in July. Nationwide service with 150
channels is scheduled to begin in September or October. …