“The question is, do they partner with those new forms of content or those new providers? Or do they sit on their hands and become less and less relevant,” said Jimmy Schaeffler, an analyst with The Carmel Group, a market research firm.

“Many people can’t get DSL and cable where they are and satellite provides them with that option,” said Sean Badding of the market research firm The Carmel Group. “It’s very, very attractive right now for people in rural areas.” The Carmel Group estimates that satellite service will capture 10 percent of the U.S. high-speed Internet market by 2005, with more than 3 million subscribers.

"Where it really helps is on the networking infrastructure side,” says Sean Badding, VP-business development at Carmel Group. “The deal is pretty expensive, but in the long run it’s going to work out for them in terms of really strengthening the broadband side of the market.”