LAS VEGAS – The advent of satellite-delivered broadband services is one of the most “exciting” developments in the industry, Chuck Hewitt, president of the Satellite Broadcasting and Communications Association (SBCA), told more than 5,000 people here.

Two-way, high-speed Internet delivery via satellite will be launched late this year, Hewitt said in his remarks opening the association’s annual convention. The question is whether the satellite dish dealers who dominate the SBCA’s membership will embrace the opportunity and convince their customers to buy Internet services.

More than a dozen companies have obtained licenses or are seeking them to provide Internet access via satellite, Hewitt said.

Charlie Ergen, chairman and CEO of Echostar Communications Corp. [DISH], told SBCA attendees that 1,000 of the DISH Network dealers who sell his company’s services nationwide are testing the Gilat-to-Home Internet service being developed by Echostar, Gilat Satellite Networks Ltd. [GILTF] and other companies including Microsoft Corp. [MSFT].

Ergen said Echostar, which has invested $50 million in the Gilat-to-Home company, has planned a major educational effort to sell the Internet access and interactivity that will be available with Gilat-to-Home.

Ergen described a recent visit to his brother, a physician, who had an Echostar DishPlayer. His brother did not understand that he could get free, personalized TV services for the next three years to enhance his viewing experience.

Ergen said he quickly explained the benefits, and his brother was on the phone to order the service within five minutes.

But the antenna dealers may be too focused on delivering simple television. Bob Phillips, president of the National Rural Telecommunications Cooperative, said he noticed that a large number of dealers walked out early from a panel discussion that was explaining satellite Internet services.

Phillips said he loves the ability of satellites to offer rural Americans the same services as those in big cities, but he doubted whether the antenna dealers feel motivated to market the services without having details of the commissions they could earn.

“I don’t think it’s real yet to the dealers,” Phillips said. The dealers probably need to hear details of Internet-via-satellite service and a commission structure that will give them a cut of the revenue, he added.

…The Challenges That Lie Ahead

Compelling new promotions and the advent of broadband and interactive services will boost DirecTv Inc.’s record-setting subscriber gains during the second half of the year, said Eddy Hartenstein, senior executive vice president of the Hughes Electronics Consumer Sector [GMH].

The number of subscribers is expected to jump 30 percent to 40 percent during the second half of the year compared with what DirecTv achieved during the first half, Hartenstein told the 5,000 people attending the conference here last week.

A window of opportunity has been left for satellite TV providers by the slow roll out of digital technology by cable TV operators, he added during a keynote speech Thursday. “We believe our industry has a competitively superior product over cable, particularly in light of the new interactive and broadband services DirecTv will introduce in the coming weeks and months,” Hartenstein said.

However, the new products will add a new layer of complexity to the competitive landscape, Hartenstein said. Satellite TV providers, dish dealers and retailers will face the challenge of providing simple, straightforward information to help consumers navigate the array of new offerings, he added.

The delivery of interactive services is a new battleground between cable and satellite TV providers, Hartenstein said. “Cable has made a big deal out of providing these services. But so far, they’ve only upgraded a fraction of their systems. With our nationwide footprint and some new services coming online, we can outshine them in this important area as well,” he said.

DirecTv, a subsidiary of Hughes Electronics, is the largest DBS or direct-to-home broadcaster in the United States, while Echostar is a strong rival.

DirecTv has 8.7 million subscribers and holds about two-thirds of the U.S. high-powered satellite TV market. Echostar holds the remaining market share. Both companies combine to serve one of every eight U.S. television households, Hartenstein said.

Helius Introduces Satellite/Terrestrial Convergence Router

With the lines between satellite and terrestrial broadband communications continually being blurred, Helius Inc. introduced a new product to offer commercial users the best of both worlds.

The company unveiled its new 9000 Series of Helius Satellite Routers here during the SBCA conference. The new Convergence Routers will integrate satellite-based and landline data access capabilities into a single unit.

A key selling point for the new router is its Virtual Technician remote capacity application. This will automatically kick in and re-route data traffic to the satellite in the event of a terrestrial line failure and vice versa.

“We believe satellite and land-based connectivity should be combined, allowing customers to leverage the unique strengths of each option,” said Myron Mosbarger, president and CEO of Helius. “Satellite is, without dispute, the best option for large file distribution and Internet streaming, while landlines are often better for applications such as Web hosting, e-mail and IP telephony.”

While the company has not set an official date for commercial availability of the Convergence Routers, it will offer demonstrations of the product. The company expects the routers to cost between $3,000 and $4,000, depending on the specific configuration, said Dan Broadbent, vice president of marketing for the Orem, Utah-based Helius.

Broadbent does not expect Helius to be the main seller of the product. The company is looking for system integration partners to sell the router as part of an overall solution, allowing Helius to continue its focus on product and technology development.