Clearwire Finds Partners

The agreement will allow both satellite companies to offer Clearwire’s high-speed Internet service to their customers. Clearwire will be able to offer the video services of one or both satellite companies to its customers.

The three companies will be able to offer high-speed Internet, video and voice in all Clearwire markets. The launch is planned for later this year.

DIRECTV and EchoStar will be able to sell Clearwire’s services on a stand-alone basis.

"By expanding the reach of our services through DIRECTV and EchoStar, and by incorporating direct-to-home satellite video services in our own distribution channels, we believe we have an opportunity to significantly expand our business opportunity," said Perry Satterlee, Clearwire president and chief operating officer.

"By choosing this bundle option, DIRECTV customers will now be able to enjoy Clearwire’s fast, reliable and secure wireless broadband network that works great at home and on the go," said Bruce Churchill, president of New Enterprises, DIRECTV.

Tune In To Google TV Ads

Google earns 99 percent of its revenue from online advertising. Their contextual search products, and expansions into different advertising models like CPM and CPA, still rely on getting those ads in front of Internet users.

That doesn’t seem to be much of a problem these days, as Google has become the dominant player in search and advertising online. But they caution investors with each quarterly financial statement that the possibility exists it could all come crashing down at some point.

Diversifying the revenue stream for a company can be a risky business. Side efforts can distract a company from the core that put it in a position to need such diversity. It’s a risk that Google has wanted to take, by finding ways to inject its auction-based ad model into the world’s of radio and television.

Google will try to make the TV side of the advertising equation a reality with its formal testing of video ads. The company announced it will partner with EchoStar, operator of Dish, and Astound Cable, a small outfit in Northern California.

Though the announcement arrived as a very low-key discussion of the partners and some talking points, it’s likely to be discussed at a much higher volume in the boardrooms of the advertising industry on Madison Avenue.

The Fear of advertising evolving from a nebulous, semi-quantifiable business, navigable only by highly-compensated ad professionals into a measurable commodity product probably has those executives on edge, and with good reason: why pay a lot for a scattershot ad approach when a brand name can go for a highly targeted market segment, and know who watched what, when they watched, and how much of it they viewed.

"With our AdWords and AdSense advertising programs we have seen the benefits of the long tail and we think we can apply these principles to help grow the TV advertising industry," Google said in a statement. "Our goal is to extend the reach and visual power of this medium to include more advertisers, large and small, and help monetize more TV programming with relevant ads."

Madison Avenue may breathe a little easier when considering the travails Google has faced in the radio market. Google’s acquisition of dMarc Broadcasting hasn’t brought Google great success yet, for a variety of reasons.

EchoStar/Dish and Astound have something radio doesn’t: set-top boxes, Sirius and XM Radio subscribers notwithstanding. Measurements Google may not be able to gather as well with terrestrial radio will be a lot easier for them to grab from a set-top box.

Google said advertisers can target by demographic, daypart and channel and pay only for actual impressions delivered, with pricing on a CPM basis.

Imagine the shakeup that could come if Google could make a deal with someone like News Corp’s Fox, to auction ads for a popular show like ‘American Idol’. Google already has a deal in place to provide search and advertising for MySpace, so there could be a natural match to be made there.

(Of course, News Corp did go out and buy online ad placement company Strategic Data Corp in February, so they may be just as terrified by Google too.)

With Google working toward television and video advertising, webmasters may be wondering if there could be some impact on them. Unless advertisers start bypassing online ads in droves in favor of TV ads, it’s hard to imagine Google’s test being detrimental to the market that built Google into a tech powerhouse.

The last mile and who controls it has been a mounting concern among the major "network-less" players like Google, Yahoo, and eBay. The concern rises from suspicion of the telecommunications industry, and its control over chokepoints.

Two bands of spectrum, expected to bring anywhere from $10-$30 billion, are expected to be auctioned off soon in a spectrum auction. The 700 MHz wireless spectrum is the most pressing, and the one the aforementioned online giants are immediately concerned with. In 2009, analog TV stations will be required by the government to go digital and give the 60 MHz spectrum back to the government. But the 700 MHz is best suited for broadband Internet.

The coalition will not be bidding on the spectrum, according to reports, but are leery of these access points being controlled by companies like AT&T or Verizon. This is largely a protective measure, it would seem, amid antitrust concerns.

Om Malik quotes Matt Coppet, a strategist for UBS Global Media:

‘Network-less’ content aggregators (Yahoo, Google) and online transaction companies (EBay) have been concerned about potential last mile toll for the customer to access their services, for the coalition providers, the only way to protect their unencumbered access to the consumer could be to build a third data [sic] own network.

One outcome they appear to be seeking is not just an evaluation of auction conduct, but an outright exclusion of incumbent providers. And based on current industry conditions, Multichannel says exclusion is a real possibility:

…the Federal Communications Commission, which will supervise the auction of broadcast spectrum, might decide to bar cable and phone companies from acquiring licenses inside their local service territories.

The exclusion of incumbents is not unheard of. In 1997, the FCC banned cable and phone companies from holding in-region Local Multipoint Distribution Service (LMDS) licenses for three years in order to promote competition in video and data markets.

A jury in the U.S. District Court for the Eastern District of Texas found in favor of TiVo, and upheld TiVo’s “time-warping” patent is valid. That meant Echostar’s DVRs infringe on TiVo’s patent, and TiVo was delighted with the jury’s verdict:

Now that the verdict is in, TiVo wants a permanent injunction against Echostar, which would shut down the Echostar DVR line. It is possible that the suitable application of large sums of money in the form of licensing fees could change TiVo’s mind, but that is just speculation right now.

Echostar won’t be the only company that might find itself with no choice but to render unto TiVo what is TiVo’s if their appeal of the decision fails. They already have to pay TiVo nearly $74 million in damages, and the company has been in a fix trying to attract subscribers to its Dish Network or find cable partners for its technology.

Should Echostar’s appeal fail, TiVo would appear to have the entire DVR field locked up, as well as the ability to make deals with cable operators besides existing partner Comcast. That could mean TiVo and Time Warner Cable may be chatting in the future.

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David Utter is a staff writer for WebProNews covering technology and business.

Net income totaled $70 million for the quarter ended Dec. 31 2004, compared with $3 million during the corresponding period in 2003. Basic earnings per share were $0.15 for the quarter ended Dec. 31, 2004, compared with basic earnings per share of $0.01 during the corresponding period in 2003.

For the year ended Dec. 31, 2004, EchoStar reported total revenue of $7.15 billion compared with $5.74 billion for the year ended Dec. 31, 2003, an increase of 25 percent. EchoStar’s net income for the year ended Dec. 31, 2004, totaled $215 million, compared with $225 million for the year ended Dec. 31, 2003.

DISH Network added approximately 430,000 net new subscribers during the quarter ended Dec. 31, 2004, giving the company approximately 10.905 million subscribers as of that date, an increase of 1.48 million subscribers compared with the number of subscribers as of Dec. 31, 2003. In January, EchoStar’s DISH Network satellite television service reported that it had surpassed 11 million subscribers.

Detailed financial data and other information are available in EchoStar’s Form 10-K for the annual period ended Dec. 31, 2004, filed with the Securities and Exchange Commission.

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