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Satellite carriers contest TV set-top market

Already angling for cable customers, providers are looking to steal away even more subscribers with satellite-based digital set-top boxes in Europe, heralding similar activity in the U.S.

Advanced TV set-top boxes have another way to connect to the Net, as a satellite standard begins to compete with the cable specification in Europe, possibly heralding a similar push in the U.S.

Currently, in the U.S., the cable industry is coalescing around the OpenCable standard, led by CableLabs. This standard mandates that all of the new cable set-top boxes will be interoperable. CableLabs is a research and development consortium of cable television system operators.

Some U.S. companies, such as DirecTV, already offer satellite-based Internet connections, but these technologies are proprietary.

Europe, however, could provide a sign of things to come in the U.S market for digital broadcasting services. New products and services are emerging based on the Digital Video Broadcasting (DVB) standard which covers both satellite and cable standards.

Nokia, for example, one of Europe's largest provider of cable and satellite set-top boxes, has signed on Spyglass to add interactive capabilities such as Web browsing and video on demand to its next-generation devices.

The advantage for Nokia is that the standards process in Europe applies to both satellite broadcasts and cable service, meaning that with Spyglass technology, it can sell one digital set-top box in each market, saving time and development cost.

An Israel-based start-up called ComBox said it is demonstrating a DVB system that will allow companies to offer Internet access through the digital satellite dishes that are becoming a popular way to receive television service. Information is sent using ComBox's WebStream central office equipment, through a satellite, to a pizza-sized dish at the user's home or office. The dish is connected to the company's SatStream modem in a user's personal computer.

The company says that information can be downloaded from the Internet at speeds averaging around 1.5 megabits per second, similar to the speeds offered by cable and DSL (digital subscriber line) technology. The equipment is expected to be available by mid-March; no pricing was announced.

"With a compatible receiver in every home, it will enable a multitude of new services such as news, interactive gaming, and e-commerce," says Randy Little, vice president of marketing for Spyglass. Such services won't come as quickly to the DBS players in the U.S., though.

"The satellite guys are very interested in this next market, but one of the issues is the performance of the 'upstream' [home-to-broadcaster] connection. You might not see them as aggressive in this area until things worked out there," Little says.

In the U.S., there are similar products based on proprietary services. DirecPC by Hughes Network Systems, is already on the market. It offers wireless Net access at up to 400 kilobits per second.