Congressional Bill Threatens Satellite Viewers

The legal wrangling over television broadcasting got much more complicated last week with the introduction of a bill to the US House of Representatives that would allow direct broadcast satellite (DBS) services to beam local TV stations' signals into the stations' own territories. The practice is currently banned by Federal Communications Commission regulations, despite the fact that cable companies have carried local signals since the beginning of the cable industry.

"Local-into-local," as the practice is called, is being touted as a means of promoting competition between cable companies and DBS providers and between competing DBS services. One recurring complaint from current and potential satellite customers is the lack of local programming---a fact that gives cable providers a marketing advantage. Satellite customers get around this by installing rooftop antennas or by becoming cable subscribers as well. However, having both satellite service and cable is illegal in some communities, for unknown reasons.

One purported goal of the bill, which is supported by the National Association of Broadcasters, is to offer consumers more choice by encouraging competition. However, an amendment by North Carolina Republican Howard Coble and California Democrat Howard Berman would have the paradoxical effect of cutting off network programming to possibly millions of viewers. Berman and Coble have been closely involved with telecommunications legislation, and their amendment would prevent any DBS service from transmitting network signals into an area once a competitor began carrying two or more local channels.

The assumption is that local channels are network affiliates, who would thereby provide viewers with a source of network programming as well as plenty of advertising from local businesses. The flaw is that once the two-station minimum is reached, access to other networks could be denied. For example, if EchoStar agrees to broadcast local ABC and CBS affiliates, DirecTV customers would no longer get Fox or NBC.

Satellite services typically relay network signals picked up from distant stations to customers in rural or semi-rural areas that are poorly served by local stations. These are the customers most likely to be deprived as a result of the bill, whereas viewers in metropolitan areas might gain by having a greater choice of services. In many cities, cable, satellite, and so-called "wireless cable" systems compete with local broadcasters for the same customers. Rural viewers have satellite service or nothing. (See related stories 1 and 2.)

According to a spokesman for DirecTV, which has not yet agreed to carry local channels, Coble and Berman's proposal "disenfranchises existing legitimate distant-signal network subscribers and basically makes the equipment they purchased useless for purposes of getting network programs." EchoStar has announced plans to begin phasing in local broadcasts in the nation's 70 largest markets over the next few years.

Berman suggests that DirecTV put another satellite in orbit to accommodate the increase in re-transmitted stations. As a DirecTV executive points out, the problem with this solution is that signals from this satellite would not be receivable by existing subscribers, because it would have to be in a different position in the sky. Unlike large-dish antennas, many of which are equipped with automated orienting systems that allow them to pick up signals from a number of satellites, small-dish antennas of the type used by DBS customers are fixed in one position.

Apparently, Berman doesn't know the difference. Multiple satellites would require new, more complicated dishes and receivers---placing the financial burden of congressionally mandated competition on consumers rather than on the enterprises selling to them.