DBS faces new challenger

While satellite TV companies and Northpoint Technology fight over DBS frequencies, a new player may throw a wrench into the works.

MDS America builds systems that use shared DBS spectrum to offer video and high-speed-data services to subscribers in 24 communities in such places as France, Iceland, Kuwait and New Zealand. The system, like Northpoint's, uses terrestrial transmitters to beam signals horizontally.

MDS America was virtually unknown until last month, when it filed its first set of comments at the FCC, saying that, if the FCC is going to allow for spectrum-sharing on DBS' 12.2-12.7 GHz band, it should be open to all customers.

"Market forces are the correct forces to shape this technology," says MDS America President Kirk Kirkpatrick, a Georgia native now residing in Germany. "The U.S. has proved consistently that competition is the way to go."

Northpoint argues that, if the FCC does not give it exclusive access to the spectrum, the U.S. will never experience what Northpoint has to offer because no one else has the technology. MDS America disagrees.

"Northpoint clearly doesn't have any wonderful, unique technology, because we've been doing it for years," says one of the company's attorneys. Kirkpatrick says Northpoint's technology is unproven while MDS America has five years' experience installing and running systems.

Kirkpatrick supports auctioning the spectrum off and says MDS America has plenty of capital to fund a bid. Northpoint opposes auctions, saying other users of that spectrum swath didn't have to acquire it at auction.

But MDS isn't taking on just Northpoint; it's also facing down the DBS providers fighting tooth and nail to keep Northpoint off the spectrum for fear the service will interfere with established DBS offerings. MDS America's existence undermines that argument.

In five years of operation, Kirkpatrick says, he has had only one interference complaint, and that was when an MDS licensee was deploying a system in Malaysia. On the day the licensee was due to flip the switch, the rival satellite operator said it had 270 reports of interference, but its comments were withdrawn when the licensee revealed it had not received a transmitter from MDS yet and no signal had been turned on.

Kirkpatrick says he never thought to ask the FCC to alter its rules to allow MDS' system to operate in the U.S. market. Now that it seems the FCC might allow spectrum sharing, MDS says it's only fair that all competitors with legitimate technology be considered.

Northpoint says MDS showed up too late to get in on the action. "They haven't been part of this proceeding, and whatever technology they are offering may have some merit, but it isn't something on which the current record is based," says Northpoint President Sophia Collier. "Also, the type of C-Band sharing they are describing has been known for a long time, and it hasn't been successful in the past as the base for satellite-spectrum-sharing relationships."

Paige Albiniak

Contributing editor Paige Albiniak has been covering the business of television for nearly 25 years. She is a longtime contributor to Next TV, Broadcasting + Cable and Multichannel News. She concurrently serves as editorial director for entertainment marketing association Promax. She has written for such publications as TVNewsCheck, The New York Post, Variety, CBS Watch and more. Albiniak was B+C’s Los Angeles bureau chief from September 2002 to 2004, and an associate editor covering Congress and lobbying for the magazine in Washington, D.C., from January 1997-September 2002.