NEW YORK — Alphastar, the smallest, most precariously funded of the direct broadcast satellite distributors, finally ceased operation on Aug. 8, leaving high and dry about 51,000 satellite dish owners.
The shutdown came somewhat abruptly, because company officials were optimistic that Alphastar would find a buyer for its assets (which consist mainly of the subscribers, the uplink center and the various contracts with cable programmers). Alphastar had declared bankruptcy on May 27, and the Bank of Montreal had taken charge of selling the company. (Alphastar’s parent company, Tee-Comm Electronics, now in receivership, is based in Milton, Ontario.)
Battle lines are being drawn over who captures the discarded Alphastar dish owners. Margaret Parone, VP of communications for the SBCA (Satellite Broadcasting & Communications Assn.), says that the association’s DBS members — DirecTv, Primestar and Echostar — are planning to go after the customers that Alphastar has abandoned.
And sources say the National Cable TV Assn. has alerted cable operators to try to get these customers to scrap their dishes and become cable subscribers.
The Bank of Montreal is still looking for a buyer of Alphastar, says Jim Papa, VP of the Alphastar TV Network. But he acknowledges that unless a buyer surfaces soon, the rejected dish owners are likely to sign up with new program suppliers, lowering the value of the Alphastar assets.
All slots sold
When Aug. 5 came and went with no buyer, Papa says, Alphastar was forced to sell back its transponder slots to Loral Skynet based on an earlier agreement worked out between Loral and the Bank of Montreal. Any new buyer will have to repurchase these slots, he says.
According to Papa, Alphastar tried to distinguish itself from its competitors by transmitting a number of ethnic channels, including three Egyptian networks, the Asia TV network, and Spanish-language channels such as Telemundo, MTV Latino and GEMS TV.