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House wraps up satellite package

Bill marks victory for EchoStar

WASHINGTON — In a vote that some members called “revolutionary” the House approved a bill that would allow satcasters to offer programming packages that include local TV channels.

The bill is a huge victory for EchoStar, which already offers, under questionable legal grounds, local programming in 13 markets. DirecTV, the only other major DBS provider, has no plans to cover local programming. The Senate could pass similar legislation as early as next week.

The broader goal of the bill is to give the satellite industry the ability to offer a competitive product to cablers. EchoStar CEO Charlie Ergen claims that 80% of potential DBS customers cite the lack of local programming as the main reason for deciding against purchasing a satellite dish.

The legislation is the result of tough negotiations between broadcasters and the satellite industry. Broadcasters supported the bill in the end because they wanted to stop the satcasters’ current practice of picking up the signal from an affil in one market and using it as a national feed for all of its subscribers.

DBS subscribership has expanded to more than 10 million customers in the past five years, and local stations were worried that the signals from distant markets could siphon away viewers and potentially impact advertising revenue.

Distant market signals cut

In a compromise between satcasters and broadcasters, the House legislation cuts off the distant market signals for viewers in the central part of a television station’s market on June 30. The so-called grade A subscribers will, at least in theory, not suffer because they will have the ability to replace the distant signals with their local channels albeit for an extra fee.

The bill allows satcasters to pick and choose which channels to air, but establishes mandatory must-carriage for all the channels in the market by Jan. 1, 2002.

Viewers on the fringes of the television market will be given more time to keep their network signals. That is because satcasters claimed so-called Grade B viewers don’t receive a high-quality over-the-air picture and thus should be allowed to subscribe to a crystal-clear digital signal delivered via satellite.

The House bill directs the FCC to come up with a method for predicting which homes receive adequate over-the-air signals and which do not. In the meantime, the Grade B homes will be allowed to keep their distant signals.

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