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(5.65/25-eef) id AA20943; Sun, 7 Nov 93 19:22:14 GMT Date: Sun, 7 Nov 93 19:22 GMT0 From: Darren Ingram Subject: Satnews 119-1 To: satnews@orbital.demon.co.uk Cc: satnews@cix.compulink.co.uk Reply-To: satnews@cix.compulink.co.uk Message-Id: Sender: satnews@cix.compulink.co.uk X-Mailing-List: Satnews Status: RO SSSSSSSS AAAAAAAA TTTTTTTT NNNNNNNNN EEEEEEEEE WWWWWWWWW SSSSSSSS SS SS AAA AAA T T N NNN N E E W WWW W SS SS S SS S AA AA TTT TTT N NN N E EEEEEEE W WWW W S SS S SS SSSS A AA A TTT TTT N N N E EEEEEEE W WWW W SS SSSS SSS SSS A AA A TTT TTT N N N E EEE W W W W SS SSSS SSSS S A A TTT TTT N NN N E EEEEEEE W W W SSSS SS S SS S A AA A TTT TTT N NNN N E EEEEEEE W W W S SS S SS SS A AA A TTT TTT N NNN N E E W WWW W SS SS SSSSSSSS AAAAAAAA TTTTTTTT NNNNNNNNN EEEEEEEEE WWWWWWWWW SSSSSSSS :---------------------Electronic Headlines----------------------: : : : Issue: 119 :-------:Published Biweekly:------: Date: 25/10/93 : : : :---------(C) Copyright 1991-93 M2 COMMUNICATIONS LTD ----------: EC FROWNS OVER UK TELEVISION RESTRICTIONS A stern letter has been written by the European Commission to the UK government ordering it to comply with the Television Without Frontiers directive or face court action. The EC is annoyed that the UK is imposing too many controls and restrictions on foreign broadcasts directed into the UK. Unless the UK complies, the EC will refer the case to the European Court of Justice in December for a ruling. This will be an embarrassing move for the UK government, which has been credited with creating an open framework for telecommunications and broadcasting services within the UK, and a strong advocate of competition and free-market enterprise. EC sources say that the French, Italian, Belgian and Spanish governments may get similar letters unless they comply with the directive, but the UK is likely to be a favoured test case for a number of political reasons, even though Italy and Spain have yet to comply with the ruling. One source suggested that the UK's support of European issues has been waning and the action could be seen as the Commission's revenge, an act denied by officials. The UK has also been criticised for granting a licence to Turner Broadcasting's TNT and Cartoon Network for their channels that use predominantly US-sourced material (Satnews 116/117). If the case comes to court, it is likely to test the often-slated directive to the extreme. Nationally each country is complaining that the directive is ambiguous and unrealistic to the extreme. Each of the 12 member states are still breaking some portions of the directive, and UK government officials privately believe that if the UK should be forced to comply every other breach of the directive should be pursued in an equally vigorous, legal manner. Under the present system, foreign broadcasters often have to get national licences to be carried on cable television systems or on other networks. In the UK, the Independent Television Commission provides licences to broadcast into the UK even though it is already licensed in its home country. Other portions of the directive including advertising standards, EC programme production, violence and pornographic broadcasting guidelines are still not being enforced throughout the signing nations. A channel broadcasting solely into one national country can be legislated by a national broadcasting authority although the directive replaces these local regulations with a harmonised ruling if the channel is aimed at other EC countries as well as the national country. BSKYB TO LAUNCH INTERNATIONAL NEWS SERVICE Despite vague denials by British Sky Broadcasting, the broadcasting marketplace is buzzing after Sky News has poached a number of television correspondents from broadcasting organisations. The long-standing rumours have also been fuelled by comments made by Rupert Murdoch at the launch of the Sky Multichannels package on 1 September, the alliance made with German media magnate Leo Kirch and the rationalisation of broadcasting interests in North America and the Far East. In September Murdoch said: "We will take Sky News around the world. There will be a parallel international service and Sky News as we know it today will be for Britain and Europe." Many industry watchers thought Murdoch was referring to additional licensing deals, such as M-NET in South Africa, which enables local broadcasters to relay Sky News programming on their own channels. In an interview with UK Press Gazette, Ian Frykberg, head of news and sport at BSkyB, said: "We are going to have to significantly increase our foreign news coverage. I am investigating ways to do that. To increase our foreign coverage would mean we would have to have more staff." But, according to Frykberg, things are in 'early planning stages'. BSkyB has poached Michael Macmillan, the BBC's Middle East Correspondent and a number of ITN (Independent Television News) staff have been approached and are being urged to defect. For many years television news was often relegated behind the entertainment services, but broadcasters are now aware of the importance of a live, constant feed of news to viewers' screens. Sky, CNN, BBC World Television Service and Reuters TV are battling it out for global supremacy, forming alliances with other broadcast organisations for local coverage and feed access. At the annual meeting of News Corp. held recently in Australia, Murdoch said that he plans to cover the world with partnerships or with his own television service so that News Corp.'s own electronic highway can be formed. "The great move now is globalisation. Because it is electronic it is so easy to do now in one country that which you can do in another country, barring the problems of local regulations. Regulations are a sore point in Murdoch's recent expansion, especially in Asia, because of fears of western exploitation and the lack of controls which could be placed on non-state media. Two weeks ago the Chinese government announced a crackdown on satellite dish sales, directly hitting Murdoch's plans to create a DTH revolution in China. Murdoch said that the recent purchase of a stake in STAR television was a very risky investment, and to counter this he would be splitting it up into four divisions -- one for China, India, Indonesia and the Middle East. Finances amongst News Corp. companies looked promising said Murdoch. BSkyB should see a 200 percent rise in profits in 1994 to GBP180 million, compared to GBP60 million presently. Eight out of nine Fox television stations in the US are making profits, and the ninth is expected to make money next year. And further cable television channels are set to be created in the future. FT GETS EXCITED OVER PIRATE TELEVISION DECODERS The Financial Times has 'suddenly' discovered that there are nasty people in the satellite industry who sell pirate satellite decoders to equally dishonest viewers, according to a recent spate of outraged articles headed by their respected media correspondent Raymond Snoddy. Pearson, the owners of the Financial Times, has a 17.5 percent stake in British Sky Broadcasting. On 8 October, just after Satnews 118 closed for press, the FT lead with a front-page article screaming "Pirate decoders pose threat to satellite broadcasters", covering the news that the Motion Picture Export Association of America has produced a draft directive they wish the EC to adopt to outlaw piracy throughout Europe. The main target of the article appears to be a company selling a lifetime pirate Videocrypt card for GBP220, with updates for GBP30 when encryption keys change, compared to BSkyB's GBP240/year subscription for UK residents only. "The increasing threat from the satellite pirates comes only weeks after BSkyB launched its multi- channel subscription package in the UK with a considerable fanfare orchestrated by Mr Rupert Murdoch, chairman of News Corporation," commented the article, before continuing in a tabloid-like air of mystery and intrigue, "The Financial Times has tracked the pirates and their unauthorised 'smart cards' that unlock the BSkyB movie and sports channels from Bochum in Germany to the village of Ballyegan in Co Offaly in Ireland and on to Warrington in Cheshire where the cards are being openly advertised for sale." The FT highlighted a company called Satellite Decoder Systems in Warrington, a branch of an Irish business run by David Lyons, which supplied the FT with a card by post from Cheshire. The following day the FT had a picture of the pirate card on top of the handwritten envelope in which it was posted to a FT correspondent living in Surrey. As Satnews 119 closed for press on 22 October, Lyons undertook to stop selling pirate decoder cards in the UK, and said that he would reveal the source of his supplies within ten days. This undertaking was made ahead of a scheduled High Court hearing. SDS was previously quoted in the FT as saying that they would continue to export the cards into the UK from Ireland after holding talks with trading standards officers in Cheshire, but in the same article Geoff Holland, principal trading standards officer in Cheshire, said that it was illegal to import the cards and that customers directly importing them would be breaking the law. British Sky Broadcasting had issued a writ in the High Court against SIS restraining them from continuing their illegal activities, and a separate claim for costs and damages is being made. BSkyB also said that it would be pursuing pirates in the civil and criminal courts. The company has obtained temporary injunctions against Hi-Tech Innovation and Chris Cary, and permanent injunctions against Satellite Communications, RSD and other pirates. David Lyons had said that SDS would be vigorously contesting the writ, saying that the statement made by BSkyB in court was inaccurate. In a somewhat cavalier mood, Lyons challenged BSkyB's ability to combat the pirate cards. It appears that Lyons crumpled at the might of BSkyB. SDS acts as a dealer-agent for Megasat in Germany and has sold over 500 pirate cards a week for some time. "Sky is running out of things to do. We know all the information in their chip and if they call their card in we already have the information they will be using on their next card," said Lyons in the FT. Lyons had also signed up for a month-long advertising campaign on local radio stations in the North West of England and Wales. Four 30-second broadcasts were to be relayed daily. It emerged late last week that the radio stations have withdrew the advertising after monitoring developments and the granting of injunctions. Gary Davey, deputy managing director of BSkyB, admitted that a number of serious attempts had been made to hack the Videocrypt service, one of the first admissions of this fact to be made by the company. "Our system has been cracked. But we control it over the air. It can't be permanently cracked," said Davey. An anonymous BSkyB senior director was quoted as saying that BSkyB could send out a new smart card every week if necessary, but industry watchers doubt this as it originally aimed to produce one every three months, and this plan soon fell by the wayside. John McCormac, the respected encryption guru and editor of Hack Watch News, said that BSkyB's closure of its security department earlier this year was directly responsible for the increase in pirate activities, especially as it has no reliable intelligence or monitoring of illicit activities. As far as the Irish Department of Communications is concerned, SDS is free to carry on regardless as the department will not be intervening into the action. "We have no more comment to make other than it is a matter, in the first instance, for the satellite companies." The FT also covered the activities of Chris Cary, the eponymous head of Hi Tech Innovative Electronics, a supplier of pirate decoding equipment, who said that he wants to sell his skills in breaking encryption services to broadcasters, enabling them to block hackers. Cary said that he did not wish to be a pirate anymore, and that he intended to change the name of his company to Key TV. The UK's Copyright, Designs and Patents Act 1988 makes it a criminal offence with a fine up to GBP5,000 to deal with pirate decoders. According to the act "..a person who makes, imports, sells or lets for hire any unauthorised decoder shall be guilty of an offence..." but the actual usage of a pirate decoder is not covered. * British Sky Broadcasting has confirmed that it has lost over 15,000 contracts for multi-channel service in October, leading to lines being deluged by subscribers who found they had been denied service. BSkyB and the Post Office has conducted an investigation and has hastily been reconnecting customers who have complained -- about 48 hours after a call has been made! Including within the haul was the card owned by Satnews editor Darren Ingram. BSkyB has taken over six days to reconnect the card despite numerous calls, and at the time of going to press it had not reconnected the service. EUROPEAN MULTICHANNELS OPT FOR VIDEOCRYPT The long-awaited formation of a European multi- channel satellite television service has been unveiled at Mipcom, the international television programme market show in Cannes, France. FilmNet The Complete Movie Channel, The Discovery Channel, The Children's Channel, Country Music Television Europe and The Adult Channel will be the first subscription television channels to be made accessible for the first time in several countries across mainland Europe by MultiChoice Kaleidoscope. All these channels, and others which are close to signing, are broadcast over the Astra satellite system and will use the Videocrypt Europe pay-television technology, a compatible subset of Videocrypt used in the UK. MultiChoice's parent company Network Holdings holds the rights for more than 30 European countries in Western, Central and Eastern Europe. MultiChoice will provide smart cards and the required customer infrastructure in countries ranging from Benelux in the West to the Baltic States in the East and to Greece, Cyprus and Portugal in the South. The company will commence its operations on 1 November in Benelux. Peter Krogh, chief operating officer of MultiChoice and Filmnet, said: "Thanks to MultiChoice, millions of potential viewers in Central and Southern Europe will have direct access to a wide choice of satellite entertainment channels from which they were excluded up to now." Other channels are to be offered in the future. There is speculation that some of the BSkyB channels will be offered in the new year, possibly through the Murdoch-Kirch agreement made on 1 September (see separate story). Filmnet's Complete Movie Channel will use Astra 1B transponder 63 from 1 November, a transponder which many conventional satellite receivers cannot tune into. The move onto Videocrypt as an encryption standard will make the service even more attractive to pirate decoder manufacturers who are keen to tap into the demand for Filmnet's movies, especially those of an adult nature that are shown from time to time. * Filmnet is also distributing subscription cards for the Thor Nordic DBS service for around US$8 per month. ALL CHANGE AT INMARSAT FOR FUTURE GROWTH Changes are underfoot at the Inmarsat organisation, according to director-general Olof Lundberg, speaking at the recent Inmarsat conference on mobile satellite communications in Paris, France. Discussions are currently being held over changing the name of Inmarsat from the International Maritime Satellite Organisation to the International Mobile Satellite Organisation (INMOSAT). The changes, once implemented, will enable Inmarsat to meet the needs of a global mass market for personal mobile satellite communications services. Changes being considered include examining the full range of options for the structure and status of Inmarsat; commercialising the investment structure of Inmarsat and improving the commercial and operational access to its satellite system. While no specific decisions were taken, the Inmarsat Assembly unanimously agreed that change was essential if Inmarsat was to fulfil its role of providing global mobile communications for the 21st Century. A working group has been set up to examine the proposed changes and it will report back to Inmarsat's assembly in February 1994. But, according to Lundberg, users will not be affected by background changes. "Throughout this process the key values which Inmarsat has stood for over the years -- universal mobile access to the system, global coverage, equitable treatment of countries and Signatories regardless of their size, and the provision of communications for distress and safety needs -- will be retained." BT INTRODUCES NEW SPORTS BROADCAST SERVICE BT Visual and Broadcast Services has introduces International TV Turnaround, a packaged service that converts C-band transmissions to Ku-band transmissions for direct customer reception, providing an economic alternative to traditional terrestrial or microwave links from gateway stations. Through the system, BT accesses C-band Intelsat transmissions at its London teleport before reuplinking it onto a Eutelsat II-F3 satellite, located at 16 degrees east. The path can also be reversed for Ku to C-band broadcasts back to North America and other countries through the Intelsat system. Transponder 40 on the Eutelsat II-F3 satellite will be used, as well as the existing superbeam transponder 22. "Our new International TV Turnaround service and the introduction of an additional transponder represents a significant investment in the broadcast industry and highlights BT's commitment to the provision of the best possible cost-effective solution for European broadcasters," said Steve Maine, managing director of BT Visual and Broadcast Services. LANDSAT SATELLITE LOST IN LATEST SATELLITE FAILURE Contact has been lost with a recently launched US$220 million earth observation satellite after it was boosted into an incorrect orbit. Landsat-6, owned by Earth Observation Satellite Co. under a joint agreement with the National Oceanic and Atmospheric Administration was being launched by Martin Marietta and is the latest in a long line of problems for the company (see separate story). EOSAT is itself a joint venture between Martin Marietta and Hughes Aircraft Co. EOSAT had, at first, thought that the satellite had been launched into a correct orbit. The satellite separated properly from the Titan rocket after lift- off at the USAF Vandenberg facility, say USAF officials. Once launched, Landsat was to transmit data to ground stations in 12 countries after a period of testing at a 438-mile high orbit as part of a five- year, US$513 million contract. "We are told it is in a working orbit and that it can be brought back to its correct orbit if only we can make contact with it. It is a Catch-22 situation," said Kevin Corbley, a spokesman for EOSAT. MTV HITS 55 MILLION AND KEEPS ON GOING Figures released by MTV Europe show that over 55 million households in Europe are now able to tune into its 24-hour music programming channel. The channel now claims that with a potential audience in excess of 131 million people, it and its other regional counterparts, are close to becoming the largest satellite channel in the world. "MTV was launched in 1987 with two major objectives: first, to get into as many homes as possible and second, to produce home grown programming. MTV has exceeded our expectations in both areas and we are ready to address the many new challenges ahead of us," said William Roedy, managing director and CEO of MTV. Roedy also said that digital compression transmissions would be introduced onto the recently- acquired Eutelsat II-F1 transponder which is complementing transponders held on Astra 1A, 1B and Thor. With digital compression a number of different music services could be included on one transponder for redistribution through cable networks and to homes equipped with suitable satellite receiving and compression decoding equipment. The Astra 1B transponder is reputedly being assigned to VH-1, another MTV-related channel, for its launch in February 1994. MTV Europe has also signed an agreement with Rete Oro and Rete Umbria, two regional Italian terrestrial broadcasters, for redistribution broadcast rights of the MTV Europe service. Peter Einstein, director of marketing and network development at MTV Europe, said: "MTV's expanding reach in Italy with an increase of nearly 1.5 million households brings the total Italian homes receiving MTV Europe to 6.4 million. This is crucial to the channel's status as a truly pan- European TV station. Italy is a vibrant, youthful country -- the perfect place for MTV to be seen!" SPECIAL REPORT: WORLD'S LARGEST CTV OPERATOR TAKEN OVER BY TELCO. UK IN UPROAR OVER MOVES Bell Atlantic has taken over Tele-Communications Inc. (TCI), the largest cable television network operator in a multi billion dollar deal, subject to regulatory approval by the US Federal Communications Commission. Bell is particularly interested in exploiting interactive television services through existing cable television and fixed telephony circuits. The deal is worth around US$22 billion. The deal would see a synergy between a cable television network operator and a telephony service operator, enabling two-way interactive services to be provided along existing phone circuits. Additionally the deal would be the first full merger between a telco and a cable operator and is being viewed with awe and suspicion by observers. US Vice-President Al Gore issued a statement following the merger announcement. "The Administration believes that rapid deployment of the information infrastructure will create jobs, increase our standard of living, and provide a wide range of services in areas such as education, health care and entertainment," said the statement. "Today's announcement demonstrates the intense private-sector interest in the information infrastructure. The Administration supports any developments in the communications marketplace that is pro-competitive and fosters the development of an open, interactive information infrastructure. Subsequent formal reviews will determine whether this proposal meets those goals." "Developments in advanced technology over the past five years have meant telecomms networks can now handle not just telephone calls but video signals as well. But this extra capacity is now far in excess of what is needed by businesses, so telephone companies are turning towards consumers as potential customers for their high-speed services," said Graham Wilde, managing director of CIT, the London, UK-based consultancy. "That would put them squarely in competition with cable companies, but until today there has been no indication as to whether the US cable TV companies and telcos would work together or fight it out." The takeover, once approved, will also give Bell Atlantic a foothold into the UK cable television market, enabling it to possibly exploit its services at the expense of BT and Mercury. TCI has a 50 percent share in Telewest, which has around 67,000 customers in the UK and 53,000 cable telephony subscribers. Telewest is also partnered by US West, a rival telco to Bell Atlantic in some matters, and hence this may see Telewest being taken over by Bell at a later stage. "I imagine BT may be somewhat concerned by this. This may speed up their attempts to get into entertainment services in the UK, but they really have a long way to go," said Wilde. It is no secret that BT, the UK's largest telecomms company, is looking into sending films down telephone lines to customers. Figures leaked by company executives suggest that annual revenues of GBP2 billion could be raised from video-on-demand services by the end of 1999. It is understood that BT would be considering a initial connection charge of around GBP50, followed by a monthly rental of GBP8 for the line. Individual first-run films would be priced around GBP2.50, a comparable price to High Street video rental fees. A spokesman carefully declined to confirm the leaked predictions, saying that video-on-demand could provide quite substantial revenue, but not in the short time. The spokesman claimed that while BT had not actively gone out to raise interest in video-on- demand, the technology had become available and that BT was looking into it. Richard Woollam, director-general of the UK Cable Television Association, accused BT's video-on-demand as a spoiling tactic against the still fledgling cable television market in the UK -- owned on the whole by North American interests -- in an interview carried by Reuters. "It's a spoiling tactic because it is not a stand- alone product. Their network is 40-50 years old; we believe that somewhere between 50 and 60 percent of their telephone service into the residential marketplace is delivered off poles and they would have to look at rewiring their network to do it," said Woollam. James Dodd, telecomms analyst at Kleinwort Benson, said that the economic proposition offered by video- on-demand based on the leaked BT figures was dubious, especially if there is no differential between conventional cable television and video rental services. Investors on Wall Street were buying any stocks which seemed related to the TCI/Bell merger. "Anything with the taste or smell of communications or media, they are going for it. A lot of unrelated cellular phone stocks are up too," said Chris Swenson, a research analyst with Hancock Institutional Equity Services in Boston. Transcontinental Reality Investors, a firm un- connected with telecommunications, saw the price of its shares rise dramatically just because its stock ticker symbol was TCI. The New York Stock Exchange ceased trading in its shares for a while so that things could calm down. Meanwhile EON Corp and Capital Cities-ABC Inc. recently signed an agreement to form a joint development committee which will create interactive television programming for prime-time sports, news and entertainment programmes. EON, formerly known as TV Answer, says that this is the first public commitment by a major commercial broadcast network to develop interactivity as part of its mainstream programming strategy. Other interactive technology companies are expected to sign contracts with broadcasters, including ABC, but to date EON is the first to have a useable and marketable product. EON expects to have a 'live' consumer service in place by mid 1994 in nine cities in the US, marking the culmination of a seven-year, US$100 million research and development programme. And according to a statement by Stephen Weiswasser, president of Capital Cities-ABC: "We believe that interactivity will help us and our affiliates to cement our relationship with our audience." The EON box is slated to cost around US$450-500 and will transmit interactive data to central community hubs by local radio frequencies, which, in turn, relay signals by a VSAT network to the central computer system.