DirecTV Abandons Satellite Internet Plans

October 25, 2004

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DirecTV is giving up on its Internet-by-satellite service. In a filing with the Securities and Exchange Commission, DirecTV said it would take a charge of up to $1.6 billion to write down the value of its so-called Spaceway project.

At one time, DirecTV had planned to use three Spaceway satellites to deliver high-speed Internet to subscribers but now says it will use the spacecraft for high-definition television (HDTV).

DirecTV has been adding video content and emphasizing HDTV since it was taken over by Rupert Murdoch's News Corp. last year while backing off its earlier commitment to Internet services. It's thought that company plans to partner with telephone companies to offer DSL internet connections as part of a service bundle.

The Spaceway satellites, built by Boeing Co., are highly complex and touted as extremely advanced. DirecTV plans to launch of the birds next year, keeping the third one on the ground as a spare.

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