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Hatch Bill Would Extend Satellite Act

2/01/2004 7:00 PM Eastern

Sen. Orrin Hatch (R-Utah) has introduced legislation that should set the stage for a massive lobbying battle between local broadcasters and satellite carriers over distribution of ABC, NBC, CBS, and Fox programming in HDTV format.

The bill would extend for five years a provision of the Satellite Home Viewer Improvement Act of 1999 (SHVIA) that allows direct-broadcast satellite carriers to import network signals to subscribers who can't get the local network affiliates with an off-air antenna.

Without the extension, EchoStar Communications Corp. and DirecTV Inc. would be barred from further network importation after Dec. 31, 2004, a cutoff that would affect millions of DBS subscribers.

Hatch — the Judiciary Committee chairman who has routinely sided with the National Association of Broadcasters against EchoStar — has not yet scheduled a hearing.

His bill is expected to be referred to the Senate Commerce Committee — whose chairman, Sen. John McCain (R-Ariz.), has clashed with Hatch in the past in earlier NAB-EchoStar disputes.

ERGEN: CHANGE LAW

EchoStar chairman and CEO Charlie Ergen has said he wants the law changed so that he can import HDTV network signals and distribute them to anyone who can't get an HD signal from the local affiliate, even if the subscriber's antenna could pick the local affiliates' analog signal.

HDTV is picking up steam as an issue for EchoStar because cable companies are marketing their distribution of local TV stations in HDTV and saying DBS does not offer the same thing.

Ergen is pressing the HDTV importation-issue because he claims DBS can stimulate demand for HDTV in markets where TV stations have been slow to transition to digital, or have taken advantage of FCC rules that allow DTV stations to operate at low power levels, meaning the signals do not blanket all households in their markets.

In a statement, Hatch did not refer directly to the HDTV importation issue, saying he recognized "there are likely to be other issues" that "warrant consideration."

EchoStar didn't criticize the bill for not addressing the HDTV issue.

"[The Hatch] bill is a good start of the debate of the terms by which the SHVIA could benefit the American public," EchoStar spokesman Steve Caulk said.

National Association of Broadcasters president Edward Fritts released a statement indicating that broadcasters would fight DBS importation of HDTV signals.

"Our ultimate goal is to see 'local-to-local' extended to all television stations in all 210 markets, and we strongly oppose attempts by satellite providers to bypass carriage of local stations," Fritts said on Jan. 22.

NAB members have sued EchoStar before over the illegal importation of analog signals. Local affiliates claim that importation shrinks their audience, leading to lower advertising revenue.

Broadcasters are expected to push for a provision that would ban importation of network signals in any market where DBS carriers retransmit local-TV signals. That ban, if in effect today, would apply to roughly the top 100 markets.

MURDOCH FACTOR

The wild card in the debate is News Corp.

Chairman Rupert Murdoch's media empire — which now controls DirecTV, in addition to 35 TV stations — has its feet in both camps. News Corp. quit the NAB several years ago over an unrelated regulatory issue.

Broadcasting sources said it was unclear whether or not Murdoch would team with Ergen in the battle with NAB.

September