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WildBlue inks distribution pacts

High-speed Internet provider teams with DirecTV, Dish Network

Joyzelle Davis, Rocky Mountain News

Published June 10, 2006 at midnight

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WildBlue Communications, a satellite-based provider of high-speed Internet service to rural areas, announced its largest distribution agreements yet with the addition of DirecTV and EchoStar's Dish Network.

DirecTV and Dish are the nation's two largest satellite-TV providers, with a total of 27 million customers. The pact with Greenwood Village-based WildBlue moves both satellite companies closer to the ability to offer an Internet bundle to compete with cable rivals' triple play of phone, Internet and video.

"More and more people are embracing the convenience of getting their Internet service through their pay-TV provider, and EchoStar is pleased that we are now able to provide a high-speed Internet solution," said Nolan Daines, executive vice president of business development for Douglas County-based EchoStar.

WildBlue, which launched its service about a year ago, has about 60,000 customers and is adding about 10,000 per month. It's targeting customers and small businesses that can't be reached by DSL or cable-Internet service, estimated to be as large as 20 million U.S. homes.

John Malone's Liberty Media is privately held WildBlue's biggest investor.

WildBlue signed a similar agreement with AT&T, the nation's largest phone company, to provide broadband service in areas within AT&T's 13-state region that aren't served by DSL.

"Our agreements with DirecTV and EchoStar are a turning point for WildBlue," said David Leonard, WildBlue's chief executive officer.

As part of the agreements, WildBlue will be the only satellite-based broadband service that either DirecTV or Dish Network will offer their customers for the next five years. Other satellite services include HughesNet, which was formerly a part of DirecTV, as well as StarBand and Ground Control.

The companies didn't announce pricing details for the service, which will begin later this year. Financial terms of the agreement also weren't disclosed.

As a stand-alone product, WildBlue costs more than DSL, starting at $50 per month for a download speed of 512 kilobytes per second and $80 for 1.5 megabytes per second. By comparison, phone company Qwest sells 1.5 megabytes per second DSL for a $45 monthly rate, though it's currently offering a $27-a-month promotion for one year.

Telephone and cable companies spent billions in recent years upgrading their systems to offer high-speed Internet over cable modems and digital subscriber lines, also known as DSL.

Those investments have paid off, with more than 42 percent of U.S. homes subscribing to high-speed Internet, the Pew Internet Project said last month. Of those, cable subscribers account for about half of high-speed Internet connections and DSL provides 41 percent.

EchoStar tried launching its own satellite-TV service and was also one of WildBlue's first investors, putting in $50 million. But EchoStar wrote off its entire investment after deciding to focus on StarBand Communications, which filed for bankruptcy protection in 2002.

At a glance

• 60,000 customers; adding 10,000 customers a month.

• John Malone of Liberty Media is WildBlue's biggest investor.

• Signed distribution agreements with DirecTV and EchoStar's Dish Network.