Page 18 - Communication Commerce and Power The Political Economy of America and the Direct Broadcast Satellite

Introduction 5

company MCI (itself purchased in 1996 by British Telecom). In
Europe, News Corp and British Telecom are working with Canal
Plus and Bertelsmann - the largest mass-media corporations in
France and Germany - to standardize and subsequently control the
digital broadcasting standard for Europe. By design, News Corp
subsidiary News Datacom stands ready to manufacture the digital
conversion equipment that all households will require to receive this
new standard for digitalized signals. 11
Through its dominant position in European and Asian DBS, and its
plans to launch a 200-channel digital direct broadcast system with
MCI/British Telecom in the United States, News Corp is striving to
become the gatekeeper of the global information infrastructure. Of
course other transnational corporations hold these aspirations also.
Not coincidentally, the world's other leading digital DBS system is
making similar plans. DirecTV, owned by Hughes Communications
(a subsidiary of General Motors), has forged a partnership with the
largest telecommunications company in the world, AT&T, to develop
transnational DBS services capable of rivaling News Corp and its
partners. Another subsidiary of Hughes has merged with one of the
world's largest telesatellite service providers, PanAmSat, to provide
North, Central and South America with an integrated range of tele-
communications services, including DBS.
At this stage in the history of technological development, British
Telecom, MCI and AT&T all recognize DBS to constitute the best
vehicle through which household and business customers can be
provided with a range of integrated information services well before
their own terrestrial cable infrastructures are completed. DBS
provides these companies with an instantaneous global reach. More-
over, most still require several years of work and investment before
their domestic infrastructures, through fiber-optic cabling and other
modifications, are ready to handle large-scale digital transmission
activities. As such, by establishing a full-service digital network with
DBS, the potential for other telecommunications corporations or
established cable television companies (already possessing relatively
superior cable infrastructures) to control the future Gil marketplace
can be significantly reduced. For News Corp and Hughes, because the
owner of a DBS reception unit can only communicate to the direct
broadcaster through some form of cable or telephone connection,
British Telecom, MCI and AT&T provide the interactive capabilities
and marketing reach needed to compete against prospective cable-
based services.