Shearson Eyes Interactive VSAT For Branch Network; ADP Market Data Feed Will Be Delivered By Satellite

Shearson Lehman Hutton, Inc. may be the next major brokerage firm to commit to an interactive satellite network to handle branch communications and market data. Already committed to a broadcast satellite approach for delivering its forthcoming Automatic Data Processing quote feed, SLH will soon decide whether to augment or replace broadcast with an interactive network.

With its recent acquisition of E.F. Hutton & Co., Shearson inherited a network of 300 two-foot Contel ASC (Equatorial) dishes being used to deliver hoot 'n' holler broadcasts and other data (MTR, January 1988). Shearson's short-term plan is to expand that network to cover the remaining 300 SLH branches. The data bandwidth of the satellite channel is 19.2 kilobits/second, which is enough to handle the planned 16.8 kilobit ADP market data feed.

"For the moment we're proceeding with the Equatorial system," says SLH communications executive Andrew Sokolov, but "we may essentially displace all of that with larger VSAT antennas, where we would not only combine the market data but also combine in effect all of our interactive data requirements."

For the past six months Shearson has been testing interactive Ku- band satellite technology from Hughes Communications, a source says, but is now being pitched by Tridom Corp., recently acquired by AT&T, which provided a branch network to Prudential-Bache Securities (MTR, October 1986). "In the next couple of months we'll decide whether or not we'll deploy VSATS and whether they will coexist [with Equatorial]," says Sokolov.

If Shearson decides to install an interactive network, it may or may not scrap the broadcast pipeline. Arguing in favor of parallel systems, says Sokolov, is reliability. Arguing against are cost and rooftop real estate issues.

While not too thrilled with the idea originally, ADP now seems reconciled to living with its customers' satellite systems, although Pru-Bache has yet to integrate its satellite network and its ADP FS Plus branch system. "Merrill Lynch, Bache, and Shearson are each trying something a little different," says an ADP source who asks not to be identified. Nonetheless, "it's not a proven technology."