Satellite Tv Service

Dish TV, a division of EchoStar Communications, was the third direct broadcast satellite (DBS) company formed in the United States. It was, however, the first such company that was formed from a parent company that was only involved in satellite television. As such it had made its name in customer service and technological innovation. Its rapid growth showed that their customers appreciated that approach.

The cable television companies were quick to realize that, to survive, they would have to become technological innovators again to compete with DBS companies. They began to add new technology to their services so that they could effectively compete with the Dish TV and the other DBS providers. High speed internet services were a natural for the high quality cable and fiber-optic networks that the Cable Television companies were using for their programming distribution networks. And with high speed internet came Voice over Internet Protocol (VOIP) telephone service. Cable Television companies were becoming true communications providers.

The telephone companies saw this as a threat to their business. They had large investments in their phone and data lines and they could not afford to loose too much of their business to the Cable Television companies. Neither could they complete head to head against them in providing television programming without endangering the high speed data services that they provided to business customers, a market that they still had little competition in.

DBS systems were essentially one way communication devices so high speed internet was technologically challenging unless it was going to be high speed one way. Dish TV was already using the phone lines for their limited interactive features. High speed data came in over the satellite feed and control data went out using the modems that were an integral part of the set top control boxes.

SBC and Dish Television had problems with the same competitor, Cable Television. Neither could afford to do what the other did, but they each needed the services that the other provided to effectively compete with Cable Television. One conventional solution, a buy-out, was almost certainly considered by each side, but new technology was looming on the horizon that might allow each of them to compete on their own. A short term solution was needed.

Of course, if Cable Television companies could bundle programming, internet and telephone, SBC and Dish Television needed to be able to do the same thing. If they could not do it on their own, and neither wanted to be bought by the other, maybe they could form a partnership to do the bundling. And that is what SBC and Dish Television did; they entered into a business partnership to bundle their services where they could.

In rural areas, far from the high speed switching systems, high speed internet was not available from even the phone companies, bundling did not work, but neither SBC nor Dish Network were competing with the Cable Television people there because of the high cost of stringing cable or fiber-optics. So bundling did not work, so what, it wasn't needed anyway. In major urban areas Dish could not compete with Cable Television because most people did not have room for their dish antennas, even the small ones. Besides, in urban areas SBC could afford to distribute programming, so they could compete with Cable Television in that market, so they did not need Dish Network.

The bundling agreements between SBC and Dish Television were never intended to be long term solutions to their problems. New technology is beginning to allow Dish Network and its DBS competitors to offer high speed internet connections over their satellite systems. Television networks and producers are putting more of their product on the internet where they have better control over the advertising revenues so SBC is facing a declining need to be a programming supplier.

For a relatively short period of time the SBC and Dish Television partnership worked for both companies. They both gained reputations in mediums that they had no access to previously. They bought time in their competition with Cable Television.