UPDATE: DISH, DirecTV: High Costs For Rural Satellite TV
October 07 2009 - 1:52PM
Dow Jones News
It would cost DISH Network Corp.(DISH) $100 million to beam
local television signals into the 29 U.S. markets it currently
doesn't serve, according to testimony offered to the U.S. Senate
Commerce Committee Wednesday.
Local television broadcasting for satellite subscribers in all
210 designated U.S. TV markets is a priority for lawmakers who are
renewing a complex satellite licensing system. The compulsory
license expires this year and renewal is considered a
"must-pass."
DISH Executive Vice President Stanton Dodge said at a hearing
that unserved markets are sparsely populated, making it difficult
for satellite providers to justify a business case for offering
service.
"The decision to provide a local NBC affiliate to a few thousand
subscribers precludes DISH from providing a new national service, a
high definition channel, or an international Spanish-language
offering to 13 million subscribers," Dodge said.
DirecTV Group Inc. (DTV) offers local service into about 152
markets. DirecTV Senior Vice President Robert Gabrielli said it
would cost roughly $2 million to expand service into each unserved
market.
DirecTV and DISH, the two largest satellite providers in the
country, are in talks with Congress and the National Association of
Broadcasters to come to agreement on some type of cost sharing
arrangement for beaming local TV stations into unserved
markets.
NAB disputes that it would cost upwards of $100 million to bring
local TV via satellite into all U.S. markets. Earlier this year,
the chairman of the House Energy and Commerce Telecommunications
Subcommittee, Rep. Rick Boucher, D-Va., estimated that it would
cost roughly $30 million collectively to extend satellite service
to unserved markets.
NAB is insistent, however, that distant channels be beamed into
markets only in the most isolated of cases, saying it would harm
local TV stations to compete with duplicative signals.
DISH also is hoping lawmakers will lift a federal court order
barring it from broadcasting network signals that originate from
outside a subscriber's area. That order stems from an earlier
lawsuit involving Echostar Corp. (SATS), which is now an equipment
provider for DISH and other telecom firms.
Echostar spun off from DISH in 2008, and the two entities
largely operate as two different companies, but they share the same
CEO. Echostar was accused by broadcasters in the suit of illegally
providing distant channels to its subscribers.
DirecTV isn't operating under a similar court order.
Federal law allows satellite companies to provide rural
subscribers with distant broadcast networks if they can't otherwise
obtain a local broadcast channel.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263;
fawn.johnson@dowjones.com