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In January, when DIRECTV announced a blockbuster deal to acquire rival dish service Primestar, along with the service's Tempo satellites and orbital slots, the merger made the front pages of all the business sections.

The story was great news for certain investors, but what exactly does the takeover mean to dish owners who are still sorting out the implications of DIRECTV's December '98 acquisition of fellow 18-inch dish programmer U.S. Satellite Broadcasting?

Here are the most frequently asked questions about the deal and our answers. We'll tell you up front that the news is almost all good, starting with the certainty of more new channels. Lots more new channels.

WHEN WILL I GET MORE CHANNELS? With the planned acquisition of Tempo satellites and their orbital slots, the potential DIRECTV channel capacity (including the USSB channels) will rise from the current 225 to a whopping 370. And they will start arriving at your home in the next couple of months. "It's hard to give a specific date," says DIRECTV spokesman Bob Marsocci. "We still have to close the deal and that means receiving regulatory approval from the FCC and the Department of Justice. We're not expecting major roadblocks, so our estimate is mid-year."

WILL I NEED A NEW RECEIVER--AND DISH--TO SEE THE NEW CHANNELS? Yes. According to Marsocci, "All current owners of Generation I, II and III systems will have to upgrade their receivers and dishes to receive the new channels because, among other things, the program guides and tuners have to be upgraded." The new programming will come from different orbital positions so the LNB on your dish has to change as well. The current orbital slot is 101 degrees and the new satellites are at 110 and 119. Bottom line: To receive everything, you'll have to buy new gear. DIRECTV would not speculate on costs.

WHAT KIND OF NEW PROGRAMS WILL BE AVAILABLE LATER THIS YEAR? Expect a lot of high-definition TV (HDTV) broadcasts, including movies, sports and pay-per-view events. DIRECTV is looking to add ethnic, religious and family programming and more channels geared toward women. There will be interactive and data-enhanced broadcasts using technology from Wink and TiVo, two services that take TV a notch up from its totally passive state.

The Wink service alerts viewers with a flashing "i" in the corner of the screen when there is data available which enhances viewing of that program. With a click of your remote, you can access that data--sports statistics or background on the making of the movie that's playing, for example--on another portion of the screen. TiVo, as described in last month's "Dish Plus," is a new service that digitally records what you're watching in real time, to give you pause and instant replay capabilities. TiVo can also be used as an automatic programmer, to alert you when your favorite shows are airing and to record them automatically, without the hassle of entering each show time.

IF I'M HAPPY WITH MY CURRENT CHANNEL LINEUP DO I HAVE TO DO ANYTHING? No. You can maintain your current system. DIRECTV expects that many current subscribers will buy new equipment over the next few years to take advantage of the expanded channel offering. "We think people will move their older receiver into another room, especially with the low cost of hardware," Marsocci says.

WHAT ABOUT LOCAL CHANNELS? DOES THE EXPANDED CHANNEL CAPACITY MEAN WE'LL GET THEM OVER SATELLITE? DIRECTV still maintains that the best way to receive local channels is through an off-air antenna. And, as many subscribers to DIRECTV's network service know, access to satellite-delivered network stations is under siege from local broadcasters who are afraid of not only losing viewers to distant stations but also advertising income, especially in primetime hours.

Jimmy Schaeffler, chairman and CEO of The Carmel Group, the satellite TV industry consulting firm, feels the tide may be turning for dish owners. "More people subscribing to satellite TV means there will be more pressure on Congress to come up with an equitable solution. The government wants competition for the cable companies, and satellite-delivered local channels do that."

WITH ALL THESE NEW CHANNELS, WILL MY PROGRAMMING BILLS GO UP DRAMATICALLY? Satellite DIRECT posed this question to DIRECTV president Eddy Hartenstein at a recent satellite TV conference, and he indicated that monthly bills should remain stable for the blending of DIRECTV and USSB channels into new packages. But he did state that new services added as a result of the Primestar deal will cost viewers more. Schaeffler is optimistic about how high your monthly bill might go. "It's a great time to be a satellite dish owner. There will be terrific deals for subscribers over the next few years. Even though there are now only two [small dish] services [DIRECTV and EchoStar], the companies will fight to win the 2.3 million Primestar customers. They'll use a wide variety of promotions to get them to sign up and you can be sure current customers will also get those deals."

I WON THE LOTTERY AND PLAN TO BUY AN HDTV SET WITH A BUILT-IN SATELLITE RECEIVER. WILL THE ADDITION OF ALL THESE NEW CHANNELS MAKE MY PURCHASE OUTDATED BEFORE IT'S EVEN A YEAR OLD? No. According to Marsocci, all of the new HDTVs with built-in receivers will work in the new 370-channel world. HDTVs from RCA and Hitachi with built-in satellite receivers have been delayed and are now expected to arrive in "late spring," meaning May or June. Unfortunately, there are still thorny copyright issues involving the Hollywood studios who are afraid that a version of Titanic broadcast in high-definition will all too easily be available to record without copy protection, opening the door for video pirates to mass-produce thousands of high-quality tapes. TV manufacturers agree with them but are fighting among themselves as to which system should be used.

Hopefully, a solution will be negotiated soon among the rival factions so there is one standard. This confusion has the potential to further slow the introduction of HDTV. No one wants that--including the broadcasters, studios or consumer electronics companies. Stay tuned.

David Elrich covers the consumer electronics industry on a regular basis for Satellite DIRECT.


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