Hoping to link its network of earth satellites directly to millions of American television sets, Communications Satellite Corp. has asked Sears, Roebuck & Co. to form a joint venture to provide direct satellite-to-home TV programming.
The two companies are discussing the use of a new type of high-powered satellite to beam programs directly to low-cost home satellite signal receivers.
A receiver to pick up television signals from satellites was listed for $35,000 in this year's Neiman-Marcus Christmas catalogue, but Cosmat and Sears are planning a system that would cost $200 to $300.
If the satellite television venture gets off the ground, it will put Comsat and Sears in direct competition with the three television networks and the rapidly growing cable television industry.
The two companies not only would build and launch the satellites and sell the receivers for the system, they also would provide as many as six channels of television programs to customers who pay a monthly fee.
Comsat last August announced its plan to develop a direct satellite-to-home video system and yesterday confirmed it is discussing a joint venture with Sears. Both companies said no final decision has been made to go ahead with the plan, and a Sears' spokesman denied reports that his company had agreed to finance development of the system.
The satellite television plan under discussion would be handled by Comsat General Corp., a subsidiary of Washington-based Communications Satellite Co.
Chartered by Congress nearly 20 years ago to develop an international satellite communications network, Comsat now has 16 satellites orbiting the earth. A galaxy of 10 Intelstat artifical moons handles international communictions. Three Marisats link ships at sea and three Comstar satelites are leased to American Television phone and Telegraph Co. to handle domestic telephone calls.
Comsat's satelles not carry communications ranging from network television feeds from abroad to test transmissions of electronic mail for the U.S. Postal Service.
The latest Comsat subsidiary is a partnership with Aetna Life & Casualty Co. and IBM Corp. called Satellite Business Systems that will carry phone calls, computer data, facismiles of written records and other information for businesses. The first SBS satellite is to be launched this year.
The move into direct home broadcasting via satellite would change the nature of Comsat's business radically. Until now, the company has operated much like a common carrier, providing sophisticated hardware for others to use. m
Since Comsat first announced its plans last summer, the television industry -- both cable and broadcast -- has questioned and criticized it.
Approval of the Federal Communications Commission would be required before any direct satellite-to-home system could be started. Even the FCC's professed dedication to deregulation of the industry could be challenged by a system with such far-reaching impact.
The Comsat-Sears plan in effect would provide pay television without the need for stringing wires to every home. It also would bypass the local television stations by broadcasting directly to the whole nation -- or would -- from a few satellites.
Comsat spokesman Robert Shwartz said there are no technical problems with creating the satellite video network. Satellite signal receivers, called earth stations, now cost a lot of money because they must pick up signals from a very low powered satellite, he explained. By building more powerful satellites, Comsat could broadcast stronger signals that could be picked up by a simple and inexpensive receiver, he said.
One such powerful satellite already has been launched and is being used for a test program of direct home broadcasts in Japan. Sony Corp. is selling earth stations for about $300 to pick up signals for that project.
Neither Comsat nor Sears will provide details of their joint-venture discussions. Comsat said it hopes to submit an application to the FCC sometime this year.
Operators of the joint venture apparently hope to capitalize on the ability of Sears, as the nation's largest retailer, to sell and service satellite receivers by the millions, just as it markets washing machines and deep freezes.
Neither Sears nor Comsat has experience in providing the television programs such a system could carry. Several entertainment industry firms reportedly have discussed filling that gap in the joint venture.