DirecTV: Broadband to Be Later, Not Sooner

New York— DirecTV Group Inc. is pressing to find a broadband product to complement its direct-broadcast satellite video offerings. Just don't expect a deal, if DirecTV decides to move forward, until later this year.

DirecTV executive vice president and chief financial officer Mike

Palkovic, speaking at the Banc of America Securities Media, Telecommunications and Entertainment conference here last Wednesday, said that the DBS giant is working hard on a broadband solution and that it should decide on a high-speed Internet transmission technology by mid-year.

That falls short of the deadline imposed by News Corp. chairman Rupert Murdoch's promise in late December at an investor conference in Phoenix that details of DirecTV's broadband plans would be known to the public “within probably two months.”

News Corp. owns a controlling interest in DirecTV.

Murdoch, who also is chairman of the DBS giant, has said DirecTV would invest as much as $1 billion in a broadband initiative and was investigating different ways to offer a product: on its own, through partnerships, or by reselling another service.

Since Murdoch's December comments, DirecTV has said it was talking with No. 2 DBS service provider EchoStar Communications Corp. on jointly developing a broadband product.

Palkovic said that WiMax, a wireless-communications technology that can transmit data at the rate of 40 Megabits per second, appears to be the most feasible way for DirecTV to offer broadband.

But Palkovic said that speculation that DirecTV could come out with broadband products in such a short period of time was probably a little ahead of itself.

“We've got people working on it pretty much every day; Chase [Carey, DirecTV CEO] is personally involved in it; but you've got technologies that have to be evaluated, you've got various partnering strategies, whether they be manufacturers or folks that hold the various pieces of spectrum,” Palkovic said. “It's kind of uncharted territory. I'm personally very bullish on the expectation that we'll get something done.”

Separately, Palkovic said that the recently announced merger between AT&T Inc. and BellSouth Corp. may have an impact on the satellite provider's distribution deal with BellSouth, but not in the near-term.

Palkovic said that DirecTV recently renewed its deal with BellSouth, prior to the merger announcement, for five years. He added that the merger should take some time to complete and its contract with BellSouth allows for a grace period where the telco cannot work with another DBS provider.