US$50 Million Invested in Satellite Venture

Microsoft invested US$50 million in Gilat-To-Home, a satellite-based Internet access service. Gilat-To-Home is designed for consumers outside of the range of wired broadband networks such as digital subscriber line (DSL) and cable. Users will hook up via specialized satellite dishes included with the service. Microsoft will sell the service as an extension of MSN Internet Access, initially through “store-within-a-store” outlets in RadioShack retail stores. This investment is the latest in a series that Microsoft has made in broadband network services, as it seeks to sell server software to network service providers and establish broadband options for MSN Internet Access customers.

Technically, Gilat-to-Home is a step beyond WebTV for Satellite, an existing Microsoft satellite service developed in conjunction with EchoStar. The WebTV offering provides television via a one-way satellite link, adding conventional dial-up Internet access through the regular phone line. The Gilat-To-Home satellite, in contrast, provides two-way data services, with no telephone line involved. It will supply Internet access to users at speeds up to 400Kbps for downloads and 56Kbps for uploads. (Though initially providing only Internet access, Gilat-To-Home could potentially be used later to also provide satellite television service.)