No news is bad news

Mike and Cheryl Scott are full-timers who live and travel extensively in their RV throughout the year. To stay tuned into their favorite TV programs, the Scotts recently subscribed to a satellite broadcast service from DirecTV Inc. and had expensive reception equipment, installed in their RV

What has disappointed the Scotts no end is that, although they can receive an abundance of TV and music channels, they have been denied access through their satellite service to local network TV programming (ABC, CBS, NBC, etc.) because the networks and cable companies have, through court action, prevented satellite subscribers from viewing network programming unless their home addresses are in areas not normally serviced by broadcast signals.

Unfortunately, the Scotts don't live in the area of their mailing address, which is located in Jefferson, Oregon, near the city of Portland. Like many full-timers, they subscribe to a mail-forwarding service because of their mobile lifestyle.

The Scotts, like other RVers, are caught in the middle of a struggle between the TV networks/ cable operators and the satellite companies. Obviously, they cannot subscribe to cable services, since they're on the road; they travel to areas where broadcast reception does not exist, and their mailing address precludes them from receiving network programming. It's a no-win situation.

What the Scotts didn't realize when they signed up with DirecTV is that a battle royal is raging between digital broadcast satellite (DBS) services, such as DirecTV and Echo Star Communications Corporation's Dish Network, and the powerful television networks and cable companies. At stake in this tussle are the rights of DBS companies to carry local network programming along with their normal channel offerings, such as A&E, TNT USA Network, HBO, etc. Since DBS companies first began beaming their digital signals via satellite to diminutive Frisbee-shaped reception dishes on rooftops around the country, the line in the sand has been deeply drawn between them and cable companies that had previously held a virtual nationwide monopoly with 67 million subscribers.

Trying to sort out the relevant facts in this clash of communications heavyweights and where the consumer stands in all this is a mind-bender. There are more players in this dust-up than in a Cecil B. DeMille movie, and enough arcane twists and turns to make the savviest of telecommunications industry insiders scratch their heads. Combatants and their allies consist of influence-peddling lobbyists, a Who's Who array of powerful federal politicians, including heads of the U.S. Senate Judiciary and Commerce committees and some of the sharpest legal minds in the business. No later than February 28, nearly 1.5 million DBS subscribers, including many fulltime RVers, may have the plugs pulled on their network-program feeds.

Since 1988, the DBS television industry has been unduly controlled by the Satellite Home Viewer Act (SHVA), which regulates, among other things, how and to whom service may is provided. This protectionist act was a direct result of intensive lobbying by cable companies and their allies at the network level. They foresaw the potential for their sizable subscription base and advertising profits to be progressively eroded by the popularity of newly forming satellite companies. Specifically, cable companies were dealing with the loss of paying customers: networks and local affiliate stations that base client-advertising rates on the number of viewers they reach. Even with SE IVA in place, satellite companies, until recently, have been liberally interpreting its intent; the companies have been providing subscribers with network channels along with the remainder of the channel spectrum. Before the most recent lawsuit, if customers could not receive regular broadcasts via antenna and had not received cable service for 90 days, they qualified for a package of network and local-access channels.

What has set this latest brouhaha in motion is a lawsuit filed last year by CBS and Fox in a federal court in Miami, Florida, against Prime Time 24 (PT-24). This company packages and distributes network programming to satellite companies such as DirecTV Echo Star and others. The suit alleged PT-24 had been violating SHVA by providing network signals to areas already serviced by local affiliate stations. NBC, ABC and the National Association of Broadcasters (NAB), which is the main lobbying body for the networks, have also had direct influence in putting the kibosh on PT-24's activities.

Last July, the federal court in Miami issued an injunction that originally ordered PT-24 to cut off local network feeds to satellite companies by October 8, 1998. The court also required DBS providers to hire a "third-party verification service," which is a nonpartisan group of arbitrators that maintains a computer database with local broadcast signal strengths in most areas of the country. Signal-strength information is cross-referenced by ZIP code, which has been established as a rather arbitrary standard by which service is authorized. Arbitrators can make exceptions for people whose "physical service addresses" fall outside local broadcast areas. As a final alternative, people who have been denied network programming by thirdparty panels may solicit a waiver from each individual network in their local area. Obviously, the burden of proof is on the back of the consumer.

What makes this convoluted process so grossly unfair is that it fails to consider that not all people in a given ZIP code receive the same broadcast-signal strength. It may be possible in the Great Plains states, where things are pretty flat. However mountainous regions, such as the Appalachians, Rockies and Cascades, have enough broadcast-signal dead spots to more than invalidate the ZIP-code theory. And how about the Scotts, who live in their motorhome? Should theybe prevented from receiving network programs via satellite just because the address of their mail-forwarding service happens to have a ZIP code where broadcast service is available? RV owners find that objectionable.

Interestingly, the federal court's timing on the date of the original network cutoff order created a collective shudder among many U.S. senators and congressmen who were running for reelection in November. The last thing these politicians wanted was disgruntled constituents who owned DBS systems blaming them for the lights suddenly going out on Rosie O'Donnell or Sam Donaldson in midsentence.

Furthermore, the major networks' executives have played turtle, trying to pull their heads in as much as possible. They likewise hope to shed blame for terminating service to as many as 1.5 million DBS subscribers. Remember, satellite users are also network customers. Losing the goodwill of these people is definitely not in the best interests of the broadcast networks under any circumstances.

Attempting to delay network cutoffs until after the November elections, NAB et al. worked out a deal with the court to establish February 28, 1999, as a revised cutoff date. This would help the freshly elected senators and congressmen dodge the wrath of disgruntled DBS viewers and allow time to prepare for their 1999 legislative session in an attempt to draft laws and guidelines that would be more amenable to all concerned.

A leading advocate of leveling the playing field for DBS companies is Senate Commerce Committee Chairman John McCain (R-Arizona). At a NAB convention last summer in Las Vegas, Nevada, Senator McCain expressed his opinion that, "Right now, there is little or no competition to cable." He further indicated that the best way to improve competition is to let DBS companies air local television signals and to reduce the fees they are required to pay for the right to air network programming. In another 1998 case in which a large telecommunications conglomerate attempted to buy its way into the satellite business, Assistant U.S. Attorney General Joel I. Klein reflected a similar view of the cable industry when he stated, "Cable is one of the most powerful and durable monopolies in this country."

In a legislative move directly counter to DBS interests, Senator Orin Hatch (RUtah) waded in on the side of the NAB and cable broadcasters with a brickbat of proposed legislation. His bill, if enacted, would force DBS services to abide by the same "full-must-carry" regulations as cable companies, which require the carrying of all stations in a given service area. Up until now, DBS providers have not been held to this standard because of their more limited channel capacity (number of channels they can physically provide). It doesn't take much to figure out that cable outfits would prefer to see DBS companies out of business altogether. However, since they are realistic enough to know they can't totally prohibit satellite concems from competing, they have used the next best gambits of roadblock, delay and obfuscation to thwart DBS expansion.

So where does all this legal squabbling between broadcast networks, cable companies and satellite services leave the DBS consumer? Probably in technological and legal limbo without local-access programming. That is, unless Congress can roll up its collective sleeves and draft relevant legislation that was actually promised in 1998. Politicos, legal eagles and lobbyists of all actions are now marshaling for a final showdown sometime this year. The prime issue to be undertaken is the drafting of a comprehensive satellite television bill, which, among other things, should determine once and for all whether or not DBS systems may carry network and local affiliate programs as part of their service.

In the interim, Echo Star's Dish Networkhas recently dropped PT-24 and contracted with another provider not under injunction to carry local broadcast stations from New York, Los Angeles and other major metropolitan areas. Contracts have been drawn up with these broadcasters to supply their signals as long as customers meet the proper ZIP-code criteria. But will this service be cut short as well if legislation goes against it? Only time will tell.

Another topic which must be addressed by Congress is whether or not to deregulate cable television's upper programming tiers. Chances are, without continued government regulation, rates will jump significantly. Also up for consideration are DBS copyright licenses, which are due to expire December 31. Copyright holders, including Major League Baseball and the Motion Picture Association of America, are pushing hard for increased fees.

Under present guidelines, if the Scotts and other RVers who travel full-time wish to qualify for local and network programming as part of their satellite services, they should first make sure they establish their official physical residences or mailing addresses well outside areas considered served by conventional broadcast networks. This information is available from the satellite TV providers and listed by ZIP code. Presently, the Dish Network will consider two addresses per subscriber, which allows them to establish an alternative address in a qualifying location if necessary

The best-case scenario for all televisionviewing consumers would be for Congress to pass legislation that would unfetter satellite companies and establish a competitive free market with the television and broadcast industries. In particular, satellite TV companies should be allowed to offer local programming in direct competition with cable with at least modified "full-must-carry" provisions. Copyright issues should also be resolved, which would not drastically impact DBS subscribers who now pay approximately $42 million in copyright fees annually.

Finally, if satellite companies are to be regulated in how they distribute local and network broadcasts, at least a realistic and workable set of criteria other than the subjective ZIP-code scheme should be developed. Furthermore, a more flexible system should be devised by which people may qualify for service, particularly an estimated 30 million RV enthusiasts like the Scotts, whose homes have the potential of changing locations on a regular basis. The most productive course of action right now for people who are concerned with receiving local network programming via digital broadcast satellite systems is to contact their U.S. senators and congressional representatives by mail and telephone. It wouldn't hurt either to drop a line to ABC, NBC, CBS and Fox to let them know how you feel on this very important issue. Unless many people loudly express their concern, legislation might be passed this year that could lock in guidelines that limit satellite companies and the content of their services for many years to come.

Copyright T L Enterprises, Inc. Feb 1999
Provided by ProQuest Information and Learning Company. All rights Reserved