ViaSat Buys WildBlue For $568 Million

Rural broadband access got a shot in the arm Thursday through the $568 million acquisition of consumer broadband provider WildBlue Communications by satellite gear producer ViaSat.

The deal will help WildBlue break out from its slowing growth and it will enable ViaSat to enter the consumer market with a hefty 400,000 WildBlue subscribers under its belt.

"WildBlue and ViaSat have been close partners for nearly a decade and today's announcement is the logical next step," said Mark Dankberg, ViaSat's chairman and CEO, in a statement. "By integrating ViaSat-1 and its ground network technology into the WildBlue operational and distribution platform, we believe we can meaningfully reduce our operational execution risks."

Dankberg noted that ViaSat is preparing to launch its high-capacity ViaSat-1 satellite in early 2011 with a tenfold increase in network capacity. The new satellite is expected to enable WildBlue to increase upstream and downstream user speeds by three to five times current speeds, enabling consumers to move from DSL speeds to broadband speeds of 8 Mbps downstream, competitive with current cable speeds.

"Our new satellite," said Dankberg, "will have nearly all of its capacity aimed at those areas where WildBlue growth is constrained by lack of cost-effective bandwidth."

Based in Denver, WildBlue primarily serves customers in rural areas. A typical WildBlue customer will have only dial-up service as competition.

Liberty Media owns 37% of WildBlue and will be able to appoint a member of ViaSat's board. Liberty Media is a media conglomerate that is controlled by John Malone.

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