Pegasus to launch satellite data service

(Telephony) - Pegasus Communications' broadband subsidiary will launch a satellite Internet service powered by Hughes Network Systems' DirecPC Direct Broadcast Satellite data service early next month.

Pegasus Express will deliver speeds of about 400 kilobits per second (Kbps) and target a niche audience, admitted Chris Walczak, vice president of product development.

"Our focus is on the rural areas of the country where there are about 30 million homes," he explained.

It will cost these subscribers $499 for the satellite modem and $69.95 a month for the high-speed access, both higher than what cable or DSL providers generally charge for equipment and monthly access. They'll also depend on a satellite link.

"Of course you have to deal with the latency issues," Walczak admitted. "The satellite providers have dealt with that by applying specific and different protocols to the satellite segment … modified the protocols in a way that affords them the efficiency through the space segment. To the end user, the interactive experience looks as if you were on a terrestrially connected device."

Pegasus has strengths that will help it move quickly into this market, Walczak insisted.

"We're a content provider. We own 10 television stations right now in six U.S. markets," he said.

Local retail partners, he said, can supplement the national service with local content built, to some extent, around the Pegasus materials.

"The second leg of that stool is our distribution network. We work through over 3,000 dealers in the country right now," he said. "Our goal is to train them and use them for distributing and selling this product. We find that their energies on a local level work very well."

Pegasus, he said, has 1.3 million television subscribers via Hughes Networks' DirecTV satellite service already.

"That certainly gives us a relationship with a large mass of customers that Hughes Network (as DirecPC) never had before," said Walczak.

The antennas have DirecTV amplifiers, lending themselves to bundling.

"If a person were to have a DirecTV receiver, they would be able to use the same dish to be able to receive both DirecTV programming as well as the Hughes DirecPC data service," he said.

Again, though, the market is limited.

"We're going to do our best business in areas where cable and DSL do not exist," he concluded.