WASHINGTON — President Clinton signed into law Monday legislation that will allow satcasters to offer local TV stations, kicking off what many hope is a new era of competition for the cable industry.
DirecTV reacted to the news by announcing that it would DirecTV– still just the major four networks — for free to subscribers in Los Angeles and New York. Eventually, DirecTV plans to charge up to $6 per month for the local channels. EchoStar plans to begin sales in 13 local markets, including L.A. and Gotham.
“The availability of local channels ushers in a new era for DirecTV, and we are excited to commence our local channel offerings in the nation’s two largest markets,” said the satcaster’s president Eddy W. Hartenstein.
EchoStar has 3.1 million subscribers, DirecTV 7.8 million. But both satcasters expect a surge of new customers thanks to their newly granted right to offer local programming. Clinton signed the bill just in time for the companies to take advantage of the holiday shopping season — by far their most important time of year for signing up new customers.
Under the new law, satcasters have a six-month grace period to offer local channels without permission; they must reach deals with TV stations for permission to retransmit their signals by the end of that period. If retransmission consent deals are not in place by the end of the phase-in period, satcasters face stiff fines if they continue to retransmit the channels.
DirecTV has signed deals with three of the four major networks. EchoStar, which has taken a much more aggressive position with broadcasters, has a deal with Fox Television Stations.
EchoStar and DirecTV are expected to press Congress to eliminate a requirement that they offer all local channels in 2002. The satcasters claim they do not have the channel capacity to offer all the local stations; instead, they want to offer only the most popular broadcast webs.