Satellite companies DirecTV and Echostar have hauled the federal government into court over a law that the companies say would do serious damage to their business.
Speaking at a press conference in New York organized by the Satellite Broadcasting and Communications Assn., the lobbying arm of the satellite industry, Dave Baylor, executive VP of DirecTV, said the law in dispute — called must-carry — states that DirecTV and Echostar can’t pick and choose which TV stations to transmit in any given market.
Chuck Hewitt, president of the SBCA, said at the briefing that because DirecTV and Echostar have limited satellite capacity, they have so far made deals to carry only the owned TV stations of ABC, CBS, NBC and Fox, plus a few selected WB and UPN outlets, in the 34 big-city local markets where the distribs are offering over-the-air stations.
But on Jan. 1, 2002, according to the must-carry clause in the Satellite Home Viewer Improvement Act, DirecTV and Echostar will have to carry every single one of the 23 TV stations in Los Angeles, the 23 in New York, 22 in San Francisco, 18 in D.C. and 16 in Chicago, etc.
And these additional TV stations could get their satellite carriage gratis: All they’d have to do is demand it. By contrast, the satellite companies have to pay the Big Four TV stations compensation for the right to carry their signals.
Broadcasters say DirecTV and Echostar shouldn’t be able to give the back of their hand to an independent TV station that doesn’t happen to be affiliated with the Big Four networks.
Smaller markets lose?
But the must-carry stricture, said Andrew McBride, the lead attorney in the suit, would end up as a disservice to satellite-dish owners in mid-sized and smaller cities because DirecTV and Echostar would have to use their limited capacity to take a home-shopping TV station in Los Angeles instead of the NBC affiliate in Richmond, Va.
By not being able to extend their carriage of local TV stations beyond the current top-34 cities, McBride said, DirecTV and Echostar would continue to suffer a competitive disadvantage with cable in markets smaller than No. 34.
The plaintiffs in the suit, filed in federal court in Alexandria, Va. are the SBCA, Echostar and DirecTV. The defendants are the FCC and its five commissioners, the copyright office of the Library of Congress, and the United States of America.
McBride said he expects a decision within the next six to eight months.