DirecTV (DTV) is looking at delivering broadband through its satellite system, according to FT.com. Liberty Media (LBTYA), which is taking a large stake in the satellite TV company, has extensive background in telecom and cable as well as a relationship with satellite broadband company Wild Blue. Wild Blue’s footprint covers the entire US and its service costs as little as $49.95 a month.
DTV moving into broadband would make competitive sense. With telecoms like Verizon (VZ) and AT&T (T) adding fiber-to-the-home to deliver TV and the cable companies offering TV, broadband and phone service, satellite TV could find its growth pressured.
But, from the point of view of Verizon and AT&T, a potential DTV broadband service could be very bad news. Verizon is spending $23 billion on its fiber initiative and the last thing it needs is another competitor. It already has its hands full with entrenched cable companies.
The $23 billion is looking a little more risky every day.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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