ViaSat Plots WildBlue Deal for Satellite Internet Service

Apparently, aerospace equipment maker ViaSat has agreed to buy closely held satellite-services provider Wild Blue Communications for more than $565 million. The move is a bet by ViaSat that it can jump into the volatile market of delivering consumer broadband services via satellite. By joining forces, the two companies seek to reduce the long-term costs and risks of expanding Internet access via satellite. The spread of these services has been impeded by hefty start-up costs, as well as technical challenges that historically made it hard for satellites to compete with cable- and phone-based rivals on price and quality. The deal's ultimate success, these people said, will depend on how well ViaSat and Mark Dankberg, its chairman and chief executive, make good on promises to leapfrog existing technology by providing faster, more flexible and less expensive Internet connections than competitors. Wild Blue's capacity-strapped service, targeted primarily at customers in rural areas without terrestrial broadband access, will be able to rely on ViaSat's satellite assets and technical savvy. For ViaSat, based in Carlsbad, Calif., the anticipated acquisition allows a less risky way of entering the consumer market. ViaSat already has invested heavily to build a new satellite, scheduled to be launched in 2011, which the company intended to lease out on a wholesale basis. But with the acquisition, ViaSat would gain an established customer base, marketing organization and retail distribution network able to take advantage of that anticipated capacity.