Satellite : DISH, DirecTV: High Costs For Rural Satellite TV

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DISH, DirecTV: High Costs For Rural Satellite TV

By Fawn Johnson
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--It would cost DISH Network Corp.(DISH) $100 million to beam local television signals into the 29 U.S. markets it currently doesn't serve, according to testimony offered to the U.S. Senate Commerce Committee Wednesday.
Local television broadcasting for satellite subscribers in all 210 designated U.S. TV markets is a priority for lawmakers who are renewing a complex satellite licensing system. The compulsory license expires this year and renewal is considered a "must-pass."
DISH Executive Vice President Stanton Dodge said at a hearing that unserved markets are sparsely populated, making it difficult for satellite providers to justify a business case for offering service.
"The decision to provide a local NBC affiliate to a few thousand subscribers precludes DISH from providing a new national service, a high definition channel, or an international Spanish-language offering to 13 million subscribers," Dodge said.
DirecTV Group Inc. (DTV) offers local service into about 152 markets. DirecTV Senior Vice President Robert Gabrielli said it would cost roughly $2 million to expand service into each unserved market.
DirecTV and DISH, the two largest satellite providers in the country, are in talks with Congress and the National Association of Broadcasters to come to agreement on some type of cost sharing arrangement for beaming local TV stations into unserved markets.
NAB disputes that it would cost upwards of $100 million to bring local TV via satellite into all U.S. markets. Earlier this year, the chairman of the House Energy and Commerce Telecommunications Subcommittee, Rep. Rick Boucher, D-Va., estimated that it would cost roughly $30 million collectively to extend satellite service to unserved markets.
NAB is insistent, however, that distant channels be beamed into markets only in the most isolated of cases, saying it would harm local TV stations to compete with duplicative signals.
DISH also is hoping lawmakers will lift a federal court order barring it from broadcasting network signals that originate from outside a subscriber's area. That order stems from an earlier lawsuit involving Echostar Corp. (SATS), which is now an equipment provider for DISH and other telecom firms.
Echostar spun off from DISH in 2008, and the two entities largely operate as two different companies, but they share the same CEO.
Echostar was accused by broadcasters in the suit of illegally providing distant channels to its subscribers.
DirecTV isn't operating under a similar court order.
Federal law allows satellite companies to provide rural subscribers with distant broadcast networks if they can't otherwise obtain a local broadcast channe