House Passes Satellite Broadcasting Reform Bill

Direct broadcast satellite (DBS) television service might soon gain a competitive edge against cable, thanks to broadcasting-reform legislation passed by the US House of Representatives on Tuesday, April 26. The bill, which won near-unanimous approval in a vote of 422 to 1, lifts restrictions on the transmission of local television signals by satellite services, which is one of the primary advantages held by cable companies. Representative Robert Brady (D-PA) cast the sole dissenting vote. So-called "local-into-local" retransmissions are banned by the Federal Communications Commission, whose arcane regulations have been upheld by Federal judges, as happened in Miami last month in a case brought by major networks against DirecTV.

Lack of local programming is often cited by potential satellite subscribers as a drawback to signing on with one of the services. Some communities have restrictions on the simultaneous subscription to both satellite and cable, and there is a little-known and seldom-enforced provision in Federal law that requires cable customers to wait three months after canceling their cable service before they can sign up with a DBS provider.

At present, cable systems are local monopolies serving large metropolitan areas, whereas rural areas have primarily been served by DBS providers. Territorial disputes have erupted for years between the two and have been resolved to almost no one's satisfaction by rulings such as those made by the Miami judge.

The new legislation imposes a "must carry" requirement mandating that any DBS service (such as EchoStar and DirecTV) that offers any local signals must offer all local programming in those markets. The regulations will be in effect by 2002. "This will level the playing field between cable and satellite," says Representative Howard Coble (R-NC), chief sponsor of the legislation. "With this new competition will come better services at lower prices." Coble and Howard Berman (D-CA) are the most active congressmen in telecommunications legislation reform.

Similar bills are expected to be presented in the Senate next month. Satellite-industry spokespeople say they are "generally pleased" with the legislation, but consumer advocates characterize it as a modest beginning. "It's a small step in the right direction," says Gene Kimmelman, co-director of the Washington office of Consumers Union.