ViaSat to Phase Out WildBlue

Now we know why DirecTV Group Inc. (NYSE: DTV) has been giving WildBlue Communications the Voldemort treatment.

ViaSat Inc. (Nasdaq: VSAT), WildBlue's owner, is directing resellers to refrain from mentioning the service by name and to stop selling it altogether. It turns out to be because ViaSat is phasing out the satellite-based service as it phases in the much faster Exede service. (See DirecTV Cuts WildBlue From Its Broadband Future .)

ViaSat expects to complete the rollout of Exede by March 1, offering tiers that top out at 12Mbit/s downstream and 3Mbit/s upstream, a company official confirmed Thursday. As Exede becomes available in a given area, ViaSat will stop selling WildBlue, which offers 1.5Mbit/s down/256kbit/s up (it doesn't even quality as "broadband" in the Federal Communications Commission (FCC) 's eyes). (See FCC: Broadband Starts at 4 Mbit/s and ViaSat Acquires WildBlue.)

However, Exede's 12Mbit/s tier won't cover the entire U.S. There's a sizable gap in the more sparsely populated midwestern region (save for areas such as Denver and Phoenix) that's not accessible by ViaSat-1, the bird that powers Exede and was launched last fall and brought into service in January.

WildBlue, whose capacity has about dried up, serves about 385,000 customers. New ViaSat customers that aren't covered by the ViaSat-1 footprint will get access to upgraded gear that supports downstream speeds of up to 5Mbit/s.

ViaSat has already set up new distribution deals with Dish Network LLC (Nasdaq: DISH) and the National Rural Telecommunications Cooperative (NRTC) for Exede, which is fast but still prone to lag and subject to some fairly restrictive consumption caps. (See Dish, ViaSat Team on Satellite Broadband and ViaSat Reups With NRTC.)

So, when will DirecTV sign up? "We continue to work with DirecTV toward an updated distribution agreement" for the Exede service, ViaSat Chairman and CEO Mark Dankberg said Monday on the company's third-quarter earnings call. "We have a lot of issues to work through in terms of how we package [the service] and how we best suit them."

DirecTV might go with multiple satellite broadband partners, as it's rumored that HughesNet, now a wholly owned subsidiary of EchoStar Corp. LLC (Nasdaq: SATS), could be one of them. Last week, DirecTV would only say that it's exploring "opportunities with a variety of broadband service providers."

— Jeff Baumgartner, Site Editor, Light Reading Cable

Jeff Baumgartner 12/5/2012 | 5:43:00 PM
re: ViaSat to Phase Out WildBlue

It will be interesting to see what DirecTV's next move is here.  I'd guess that they will end up expanding their options and go with multiple satellite broadband partners to go along with its multiple wireline broadband/bundling partners. Just goes to show how important broadband has become to the satellite TV guys.  But it was hard to say how confident ViaSat is about those prospects near-term...seems like they are still confident they'll get a deal done, but I detected just a tinge of uncertainty there when the CEO said things with DirecTV are "proceeding pretty steadily" yet added that there are "a lot of issues to work through."  I take that to mean that DirecTV may just take longer to pull the trigger than Dish did or it's just being a tough negotiator.  JB


AESerm 12/5/2012 | 5:43:00 PM
re: ViaSat to Phase Out WildBlue

So ViaSat is upgrading. Faster service and new brand. Whole thing makes sense. More sense than thinking DirecTV's b'band strategy was going to be simply its co-marketing deals with AT&T and VZ. 

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