Thursday, August 16, 2007

DirectTV/Broadband Powerline Alliance

DirectTV has made a wholesale distribution agreement with Current Communications Group to resell Current's Broadband Power Line (BPL) service. This will give DirecTV a broadband data and VoIP service components so that it can better compete with the triple play offerings from the Cable companies and the Telco IPTV services that it competes with.

Current is currently offering a 3 Mbps broadband service to 50 thousand homes in Cincinnati, Ohio. It is deploying a 10 Mbps broadband service in the Dallas Fort Worth area in Texas that is planned to cover 1.8 million homes over the next four years.

The satellite companies are in a tough position with only the video component of the triple play offerings from the cable companies and the Telcos. Sky in the UK has addressed this issue by acquiring a major broadband company there.

This looks like a pretty weak strategy that only addresses two major metro areas today. Current is working to add other power utilities to its service, but this will take time. It seems to me that the real answer to this would be for AT&T to acquire DirecTV or EchoStar. I think that a merger like that would be good for both companies.

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