DirecTV Venture Tests Phone Plan

By a WALL STREET JOURNAL Staff Reporter
August 30, 2006; Page A12

EL SEGUNDO, Calif. -- A joint venture between DirecTV Group Inc. and Hicks Holdings LLC plans to test an Internet-based phone service that could represent a first step for DirecTV toward offering a package of Internet, phone and television offerings.

DirecTV and Hicks in May formed a venture called DirecPath to bring DirecTV's satellite entertainment service, along with high-speed Internet and related services, to apartment dwellers and residents of gated communities. The joint venture today will name Vistula Communications Services Inc. of New York as the provider of the Internet phone service.

The new phone service will be tried first in a small test and pilot program in Florida, said Rupert Galliers-Pratt, chairman and chief executive of Vistula.

About 27 million homes get satellite-TV service, but the industry's customer growth has slowed as rival cable companies have expanded into offering a full menu of entertainment, phone and Internet services that satellite hasn't been able to match. Phone companies also offer the combined services, known in the industry as the triple play.

"The whole triple-play market is really starting to take off and it's a great opportunity," said Mr. Galliers-Pratt. "The quality of the service is absolutely critical and they would like to make sure that it all works fine" before expanding, he said.

DirecTV is controlled by News Corp.