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Geocast Suspends Operations

3/12/2001 02:00:00 AM Eastern

MENLO PARK, CALIF. -Datacasting pioneer Geocast Network Systems suspended operations after failing to secure additional financing to keep the company running.

Geocast attempted to work with such consumer electronics firms as Thomson Consumer Electronics and EchoStar to develop datacasting systems that initially would have sent select Web content to PCs using alternative broadband pathways. The long-range plan was to develop the platform to send content over portions of broadcasters' Digital Television spectrum.

The company had planned to work with EchoStar to launch a broadband service to PC users in the third quarter of this year.

Geocast said it is currently looking to sell its assets.

Among companies that had financially backed the venture were A.H. Belo Corp., Electronic Arts Inc., Hearst-Argyle Television and Liberty Media Group.

Geocast planned to create a national multimedia service that would have been distributed by satellite to local markets and retransmitted by local DTV stations. Services would have included national content, such as financial information and music videos, as well as local news.

At last year's CES, Geocast and Thomson introduced a peripheral device that could capture data sent through the digital television airwaves, store it and display it on a PC. The $299 prototype GeoBox included multiple 8-VSB tuners, to receive several stations in a market simultaneously, and a large amount of disk storage to cache multimedia content.

Geocast initially raised over $200 million in funding, mostly from venture capital firms, and constructed a satellite uplink facility in California to beam its service across the United States. It had distribution deals with major broadcast station groups Hearst-Argyle, A.H. Belo and Allbritton Communications, and content deals with cable programming suppler Liberty Digital and game developer Electronic Arts.

Each station group has pledged part of their DTV spectrum-a daily average of 6MBps, with a minimum contribution of 2.5MBps-to the venture, giving Geocast coverage of 37 percent of the country. The company had been conducting field trials in Washington, D.C., Sacramento, San Francisco, Portland and San Jose, and planned to launch a terrestrial DTV service in the third quarter.

Geocast was looking to generate revenue from advertising and transactional fees by relying on a consumer's existing ISP as a backchannel for e-commerce.

However, Geocast broadened its scope beyond DTV in October by striking a distribution deal with DBS operator EchoStar for national coverage directly to consumers. Geocast was to get 12MBps of EchoStar's spectrum to distribute rich content to standard EchoStar DISH systems before being passed through to a GeoBox with a 40GB hard drive.

The company also planned to work with StarBand, a two-way high-speed satellite Internet access system partnered with EchoStar.

Analysts, who saw the satellite deal as a reaction to uncertainty over the U.S. digital television standard, questioned that move. Geocast, however, said the company's plan had always been to use multiple paths of delivery to the home.

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