Apartment and condo dwellers who had pretty much written off direct broadcast satellite service as a luxury for homeowners may be in for a pleasant surprise. DBS dishes are slowly popping up on big residential buildings thanks to partnerships between the digital broadcasters and their analog cousins, satellite master antenna television companies - known by the catchy acronym SMATV.
DirecTV is the largest DBS operator, offering 175 channels to customers willing and able to put up pizza-sized dishes to nab its signal, and has been the most aggressive at getting into the apartment/condo market.
The company has hammered out deals with SMATV companies, which already provide satellite TV service to buildings, to install its dishes and resell DirecTV's digital service along with or instead of their own analog fare. DirecTV saves itself the trouble of trying to sell dishes to consumers who would have nowhere to put them, and SMATVs get a piece of the action.
The relationship is symbiotic and grows out of necessity. Apartment dwellers face several hurdles in getting DBS service. Their units must have a place with the needed southwestern exporsure where a dish can be bolted - assuming the building allows such installations at all.
The Federal Communications Commission is contemplating outlawing such installation restrictions, but that wouldn't squelch the inevitable tensions among neighbors, condo associations, and building owners.
DirecTV's SMATV gambit is an attempt to leapfrog these complications.
"It's just more efficient to do it this way," explained DirecTV spokesman Robert Mercer, who said the company has so far inked deals with about 170 buildings nationwide.
Of course, DirecTV could sidestep the SMATVs. But the firms often own the wiring that sends the signal to individual units, meaning DirecTV would have to either buy or lease the wiring or put in its own. Depending on local laws, a SMATV operator could refuse to sell the wiring. DirecTV would have to convince residents that weeks of construction in their hallways would be worth the competitive benefits of a second wire.
Such construction, of course, would be expensive. Interestingly, the FCC has proposed rules that would require the owners of inside wiring - whether SMATV operators or cable TV operators - to sell or abandon it upon the building's request. But the commission has yet to issue a decision.
Either way, these hassles are more than DirecTV wants on its plate.
"There are all kinds of variations to this thing," Mercer said. "It would be quite a major program to maintain the systems. It's a much more complicated process than standard, single-family homes." He said that regardless of the FCC's eventual decision on whether to preempt apartment and condo dish restrictions, "a lot of this works in our favor. No matter what happens, this program makes sense."
It may make even more sense for the SMATV industry, a subculture of the video marketplace that has managed to penetrate apartment and condo buildings while the cable TV industry was busy digging ditches on Main Street. Because SMATV operations don't cross public rights of way, they're also known as "private cable" systems. But with cable TV operators becoming more aggressive in urban markets and the uncertainty of the inside wiring rulemaking looming, the SMATV industry sees deals with DBS operators such as DirecTV as a necessary survival tactic.
DirecTV's most recent deal, made a couple of weeks ago with OnePoint Communications, will offer some DirecTV programming at six properties covering about 4,800 rental and condo units in Pennsylvania, Maryland, and Virginia. The idea is to give customers the ability to access DirecTV programming "without getting into a fight with their condo association or building manager," said John Lubetkin, OnePoint Executive Vice President of corporate development.
OnePoint will start a trial in Philadelphia before the end of October in which it will test various packages of services - including some bundling of telephone service through a resale agreement with Bell Atlantic to "see how it works out," Lubetkin said. The company also has plans to add Internet access service. But even Lubetkin acknowledges that the whole plan is nothing if not uncertain. "Anyone who says they know the marketing end of this is full of crap," he said.
