House OKs sat carriage, but Senate may stuff it

WASHINGTON — Satcasters are now one step closer to their goal of offering local TV channels. The House voted Tuesday night 411-8 to change current law to allow DBS companies to offer local channels to their subscribers.

While the House vote was overwhelming, a wrinkle for the legislation has developed in the Senate, where Finance Committee chairman Phil Gramm (R-Texas) has vowed to block the bill unless a key provision is changed.

Gramm objects to a $1.25 billion loan guarantee which was added in as an effort to promote the carriage of local channels via satellite in rural areas.

Neither DirecTV nor EchoStar currently has plans to offer local channels in small- or medium-sized markets. Instead, the two leading satcasters plan to concentrate their local channel offering in the top 25 or so markets, where 50% of the nation’s television viewers live. Rural senators demanded that the loan guarantee be included in the bill to ensure that their constituents were not left out of satcasting’s so-called local-in-to-local benefits.

Weblets left out for now

or at least the next two years, satcasters will only carry the major broadcast webs, leaving local UPN and WB affils in the dark. But on Jan. 1, 2002, satcasters will be obligated to carry all the channels in markets where they are required to carry one. Satcasters insist that this is technically impossible, but for the time being, that debate has been postponed.

Although industry sources said that Gramm’s objections can be overcome, there is the possibility he block the bill’s passage. That was certainly his stated intention on the Senate floor Tuesday: “I want to make it clear that if the bill comes to the floor of the Senate and it has that loan guarantee in there … it will not become law in this millennium.”

Deadline looms

If Congress does not take any action on the satellite copyright issues, satcasters are in even bigger trouble. Their so-called compulsory license, which allows them to retransmit TV station signals from one market to subscribers who do not have access to local feeds, will expire on Dec. 31. If that happens, almost 10 million satellite subs will lose access to network programming.

The House passed the bill Tuesday night with the hope that satellite services with local channels will create a competitive force to keep cable’s soaring monthly bills in check.

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