Telekurs, A-T In Spat Over Responsibility For Satellite Deliver Costs

Systems integrator and market data feed redistributor A-T Financial Information Inc. is at odds with Telekurs (North America) Inc. over responsibility for the costs of satellite delivery to mutual customers in remote locations. As the dispute rages unresolved, A-T is threatening to terminate its agreement to redistribute Telekurs data to its customers.

A-T Financial says Telekurs is losing customers because the vendor is not able to deliver its Ticker feed to user firms directly via satellite. Telekurs officials counter by saying A-T Financial wants Telekurs to provide satellite transmission because the integrator is itself no longer willing to bear the cost of providing it.

A-T Financial president James "Buck" Andrews says A-T will drop Telekurs in March or April. "Our satellite network is a large expense," says Andrews, "even though we have quite a few customers up on it. Some customers will shift to [market data] vendors with satellite [capacity], and some will stay with Telekurs data and run direct land lines to us."

A source at Telekurs takes a different view, suggesting A-T has made its bed and now must lie in it. "The more customers on satellite," says the source at Telekurs, "the more attractive that option would be [for A-T Financial]. A-T is supporting a handful of customers, and it's costing them an arm and a leg. They would have liked to have seen us take it over, so they would not have to pay for the space segment. But we weren't ready to jump in when their contract lapsed."

"In reality," says the Telekurs source, "maybe we didn't move fast enough for A-T [with our own VSAT network], but they were burdened with a satellite contract. They had bought Ku-band space segment themselves, but it was very expensive. They would have liked us to take over the requirement so they would not have to provide satellite service."

To fuel its data distribution platform, A-T Financial redistributes data feeds from Knight-Ridder Inc., Reuters, S&P Comstock, Telekurs and other vendors. A-T Financial operates its own leased line and satellite network for delivery of third parties' market data services.

For A-T Financial, the Telekurs issue is coming to a head now because its own VSAT satellite contract with telecommunications vendor SpaceCom Systems Inc. is set to expire next month. Having decided for reasons of expense that it would not renew that contract, A-T Financial then turned to Telekurs, expecting the feed vendor to provide satellite capability. But Telekurs is not yet equipped to provide satellite delivery of the Ticker feed, so A-T Financial decided not to renew its contract to redistribute Ticker either.

If events continue in the direction they are headed now, A-T customers will have the option of receiving the Telekurs feed directly via land line from the Ticker vendor, or of switching to an alternative vendor offering satellite delivery.

Andrews says he knows of more than a dozen firms that will switch to competing vendors PC Quote Inc. or S&P Comstock, a unit of McGraw-Hill Inc., rather than install more costly land lines. Both these vendors are able to deliver their data via satellite.

Currently, A-T Financial is linked to Telekurs via dedicated land lines and uses the satellite portion of its network to deliver Ticker and other vendors' market data to remote sites. But once A-T's satellite deal with SpaceCom lapses, remote customers still desiring Telekurs data will have to agree to bear the higher cost of direct terrestrial transmission.

Andrews says the difference in cost between satellite delivery and installing a land line can be dramatic. A-T now charges $75 per satellite installation per location to receive the Telekurs data feed. If land lines are the only option -- and if the customer is not a local call to Telekurs, Andrews says the telecommunications cost to a remote location can run $800 to $900 per month, "up to 50 percent of the cost of the entire package."

Based on discussions with Telekurs, Andrews says it was his understanding that Telekurs would be supplying its own satellite uplink by the end of the first quarter. But with the first quarter waning, the vendor is only just beginning to investigate the options, according to Telekurs president Ken Marlin. Telekurs has hired a satellite consultant, and the company is exploring 56 kilobit/second Ticker satellite service.

"We are seriously looking at satellite service," says the Telekurs source, "and we've come up with some relatively attractive approaches." But Marlin emphasizes that the investigation of the satellite option remains in its preliminary stages.

Telekurs had considered putting in a 19.2 kilobit/second VSAT feed, according to the source at the company, but decided 56 kilobit/second satellite delivery would mirror the company's emphasis on the 56 kilobit/second terrestrial Ticker feed. Telekurs is also evaluating the advantages of two-way VSAT delivery versus a one-way broadcast of Ticker data via satellite. The two-way capability would permit users to interactively request specific pricing files on an on-demand basis.

"There's probably no [technical] advantages to my existing customer base from switching to satellite," Marlin says. "Satellite is simply a cost-effective way to deliver the data. It's a question of physical location. We have nodes [for the terrestrial leased-line network] in most major cities, but I don't, for example, have a node in Kansas City or Oklahoma City."

Aside from redistributing third-party data services, A-T Financial sells Microsoft Corp. Windows-based display software providing a single user interface for market data from multiple sources. Telekurs' Ticker, meanwhile, is also handled by a number of other value-added resellers like Stockmate Financial Systems Inc., American Real-Time Services Inc. (ARTS), MarketView Software Inc. and Market Vision Corp.

The bulk of A-T Financial's network consists of 56 kilobit/second landlines provided by WilTel Inc. The 19.2 kilobit/second Ku-band VSAT portion of the hybrid A-T network is operated and maintained by SpaceCom, a division of United Video Inc. based in Tulsa, Okla.