Microsoft teams on satellite broadband

Now that Microsoft has Windows 2000 out the door, the company can turn its attention to other projects. Among its goals: high-speed Internet access via two-way satellite.

Microsoft and Gilat Satellite Networks are co-developing two-way satellite broadband for consumer purposes, the pair said Wednesday.

Trials of the two-way satellite for high-speed Internet access are already underway, with the service expected to launch by year-end, representatives of the companies say. They claim the satellite service can deliver Internet connections at speeds ten times greater than normal modems, and does not require a second telephone line. The companies did not give the exact speed of transmission.

Gilat has already established a new company, Gilat-To-Home, to deliver the broadband two-way satellite service. Following necessary approvals, Microsoft expects to take an initial 26% stake in the company with an investment of $50 million, the companies say.

Microsoft also has plans to buy "a significant number" of Very Small Aperture Terminal (VSAT) units from Gilat-To-Home for at least four years, Microsoft and Gilat say. The companies did not specify how many units Microsoft expects to buy or how much each unit will cost.

Microsoft will in turn use the VSAT units for its MSN Internet Access broadband satellite service, the companies say. The hardware and service will be available through Tandy's Radio Shack stores. Prices for the hardware and two-way satellite service were not disclosed.

Gilat-To-Home is headed by Zur Feldman, formerly the executive vice president of operations at Packard Bell Electronics.