WASHINGTON — Congressional leaders reached a final agreement Thursday that will allow DirecTV and EchoStar to offer local broadcast channels to their subscribers by Christmas.
The legislation will allow satcasters to offer local channels as long as they get permission from broadcasters to retransmit their signals. The bill will give satcasters six months to negotiate a deal with stations, but at the end of the phase-in period, the satcasters must have a contract or turn the signals off.
EchoStar strenuously objected to the provision, insisting that it should have at least a year to close a deal with broadcasters. The satcaster would face a fine of $25,000 per day for each unauthorized broadcast signal it uplinks in violation of the law.
Satcasters are ready to roll out local service in the nation’s top 20 or so markets. Congress hopes that adding local stations to the satellite lineup will herald a new era of competition for cable.
The bill has now been passed twice by the House, but the Senate had yet to take action late Thursday.
The House had to take the unusual step of voting on a bill it had already approved after the legislation became bogged down by Senate infighting. During the delay, several changes were made to the bill that required the House to vote on it again.
Senate Finance Committee chairman Phil Gramm (R-Texas) blocked the legislation because it included a provision that would have provided government-guaranteed loans to companies that provide satellite-delivered local service in rural areas. Gramm objected to the provision on jurisdictional grounds: He said it had not been approved by his committee.
The rural loan guarantee was stripped from the bill, but supporters won a promise from House and Senate leaders that the provision would be considered again by March 30.
The weeklong delay caused by Gramm’s objections did lead to a setback for Hollywood and other copyright owners. Shortly before the House held its vote last week, congressional staffers discovered a provision that would have made it explicitly illegal for online service companies to transmit broadcast signals over the Internet.
During the week that the legislation languished in the Senate, Internet Service Providers such as America Online went on the attack. They succeeded in having the language removed from the bill over the objections of the studios, broadcasters and sports leagues.
The sports leagues pushed for the language out of concern that the Internet could weaken their ability to sell regional rights packages. Those concerns were shared by the other copyright-rich industries. If broadcasts from local stations became widely available on the Internet, it could wreak havoc on the way sports and entertainment copyrights are sold.
Rep. Rick Boucher (D-Va.) told Daily Variety that tearing the copyright language out of the bill was the right thing to do. Boucher accused the copyright owners of inserting the language “under the cover of darkness,” adding that it should have never been in the bill in the first place.
One entertainment industry source said it is appropriate to hold hearings on the issue. The source noted that the copyright office had already found that the Internet industry does not enjoy the same kinds of compulsory licenses to broadcast programming that the cable and satellite industries now enjoy. “We have been down this road before, and we are happy to have this debate on its merits.”