New high-speed Net services from space

This week the subsidiary of Hughes Electronics launched DirecWay, a package of satellite-delivered broadband services for homes and small businesses that can't get high-speed access through DSL or cable modem providers.

Using satellites perched above the Earth's orbit, Hughes Network Systems will transmit data, voice and video traffic to multiple sites through various service provider partners including America Online, Earthlink, Juno Online and Pegasus Solutions.

Hughes executives said the delivery speed will be comparable to that of cable modems.

Basic DirecWay service starts at $500 for the satellite dish, $200 for installation and a monthly subscription fee of between $60 and $70.

DirecWay is not the first satellite-based Internet service from Hughes. The company previously has offered its DirecPC service, which earlier this year introduced a two-way version. Prior versions only offered high-speed downloads, but required a slower dial-up modem for uploads.

Satellite Internet services are a potential alternative to cable modems and DSL (digital subscriber lines)--the two leading broadband Net access options. Satellite Net technologies offer an easier option for linking rural and hard-to-reach communities when compared with traditional terrestrial networks, such as cable and DSL. However, most industry analysts expect that satellite Net access will remain limited in use.

At $60 to $70 per month, Hughes' DirecWay is significantly higher priced than cable and DSL, both of which have seen recent price increases putting them at about $50 per month on average. Plus, the high up-front costs of equipment and installation for satellite Net access could force average city-dwelling and suburban consumers to shy away. Thus, DirecWay and other satellite Net options, some of which are expected in two to five years, may be most popular with remote consumers.

The company will initially focus on customers in regions that aren't being served by terrestrial DSL or cable modem networks.

"There is a significant market out there that's only available to satellite," Chief Executive Pradman Kaul said in a statement.

Hughes Electronics is the nation's largest satellite TV provider, serving more than 10 million subscribers through its DirecTV service.

News.com's Corey Grice contributed to this report.