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Luxembourg-based Internet Satellite Project Fails

Ulrika Lomas, Tax-news.com, Brussels

17 October 2000

Europe Online Networks SA, Luxembourg-based provider of satellite-based Internet services, has announced that it is to exit the business, saying its platform can't handle increasing use among its customers.

Europe Online whad been operating Europe's first mass-consumer Broadband Internet Satellite Network, allowing businesses and consumers across Europe to receive broadband Internet via their PCs and televisions. However, the two-year-old company is to abandon its satellite-based consumer broadband offering and will relaunch it as an interactive TV service.

The problem for Europe Online is that its technology cannot handle huge amounts of traffic. Service slows considerably as the number of users rises. Also, data from the user's computer is sent through phone lines, a turn-off for some customers. Europe Online spokeswoman Simone Steinmetz said: 'High-speed Internet access simply does not work with satellite. It's a bad use of satellite capacity.'

Two US services, DirecPC from Hughes Network Systems and StarBand from EchoStar, Gilat and Microsoft, have satellite Internet plans in place. DirecPC has a one-way offering coming soon and is planning to launch a two-way service in early 2001. StarBand's two-way service debuts next month. Sandy Colony of StarBand said the Europe Online platform is far removed from the company's service: 'There are significant differentiators between their VSAT technology and our VSAT technology. We also have unique software. You can't compare them to us.'

Europe Online is a privately-held company with shareholders including Rockefeller& Co., Egerton Capital, Telfin Tractebel, CITA., Cregelux, and Eurédit. The company has deals with various content providers, amongst them Travel Channel and ZDNet.

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