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COMPANY TOWN : Chinese Wiring the Countryside for Satellite TV : Television: Program is the first experimental step in building a nationwide direct-to-home system.


For those with the money or technical know-how to receive and unscramble the signals, the skies over China are alive with broadcasts from a dozen satellites, beaming down at China everything from HBO and MTV to the Disney and Golf channels.

Indeed, China's cities are home to a thriving subculture of satellite TV aficionados who fiddle with electronic equipment for the high-tech rush of picking up satellite broadcast signals in a language they often don't understand.

"Really, nobody bothers us," said one such hobbyist, who now installs satellite dishes in Beijing for a living. He caters mostly to foreigners, Taiwanese and Hong Kong businessmen, and other urbanites who dare to defy the ban by planting dishes on unseen rooftops.

Many large compounds that house government employees ignore bans on receiving foreign satellite broadcasts, picking up whichever signals they please from their satellite master antennae and feeding them to their residents via cable networks.

As a result, many of China's elite have watched banned satellite broadcasts for years. Their channel of choice is usually Phoenix, a joint venture between Rupert Murdoch's Hong Kong-based Star TV and a consortium of Chinese companies. The station features Taiwanese soap operas, game shows and news coverage that sticks to the Communist Party line. Although officially illegal for Chinese to watch, Phoenix has gradually won a degree of tacit government approval.

While waiting for the day when DTH becomes available to paying urban customers--which analysts say could take several years--a host of domestic and foreign players are lobbying the government and jockeying for position to provide equipment and programming.

China's electronics industry, for example, is eager to provide low-cost satellite-related equipment, the manufacture of which is currently restricted to several dozen officially approved firms.

The market for broadcast satellites in China is dominated by three U.S. firms: Loral, Hughes and Lockheed Martin. In a recent deal, Milpitas, Calif.-based Divicom has supplied encoding equipment for the nascent DTH program.

CCTV has also purchased a foreign-made subscriber management system and plans to launch more digital broadcast satellites, which will give viewers a choice of about 30 domestic channels by 2000.

Once the DTH platform is in place, the crucial missing ingredient will, of course, be foreign programming. Barring major liberalization of Chinese media, U.S. companies such as HBO and MTV will be shut out.

And foreign programmers are skeptical that DTH in China can be commercially viable without their content.

Consumers are unlikely to pay for DTH unless it can deliver programming that is not available from China's 1,300 public cable networks, said Michelle Sie, president of Denver-based Encore International, which sells blocks of U.S. programming to CCTV.

"I don't see that digital broadcast satellite TV is about to take off," Sie said.

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