News

Bcasters Settle Suit with DirecTV

3/14/1999 7:00 PM Eastern

Washington -- Under pressure from Congress, the major
broadcast networks and DirecTV Inc. announced last Friday that thousands of dish owners
will lose access to distant-network signals June 30 as part of a broad out-of-court
settlement of their high-profile dispute.

The deal requires DirecTV to stop providing Fox, CBS, NBC
and ABC by June 30 to dish owners who live close to TV transmitters -- in the so-called
grade-A zone. Grade-A residents can apply for cutoff waivers from the local stations or
buy off-air antennae at a discount from DirecTV.

According to House and Senate sources, grade-A dish owners
will be hit hardest by the agreement. About 75 percent of the 2.2 million dish owners who
were to lose Fox and CBS signals by April 30 under a federal court injunction reside in
the grade-A zone.

Dish owners living further out -- in the so-called grade-B
zone -- won't lose service until Dec. 31. Grade-B dish owners may also seek cutoff
waivers or try to qualify as legal subscribers under a new signal-strength model recently
adopted by the Federal Communications Commission.

The agreement does not include EchoStar Communications
Corp., which, according to broadcasting sources, serves approximately 400,000 dish owners
with distant-network signals.

"In our view, [EchoStar] ought to be held to the same
standard in the marketplace that DirecTV has agreed to," said Jim May, executive vice
president of government relations for the National Association of Broadcasters.

NAB lawyers said they have already notified the federal
judge in Miami who issued the injunction about the agreement, and they expect to file the
settlement by the end of next week.

Broadcasters secured a restraining order against DirecTV
last month to stop the importation of distant-network signals, which TV stations claim is
robbing them of advertising revenue in violation of the Satellite Home Viewer Act.

The agreement came just four days after House Commerce
Committee chairman Rep. Tom Bliley (R-Va.) put the brakes on legislation aimed at helping
dish owners, but warned broadcasters and the satellite industry to reach an agreement
quickly in order to avoid a legislative solution that neither would like.

NAB president Edward Fritts said a privately negotiated
deal should take pressure off Capitol Hill lawmakers who did not want to take sides in the
dispute.

"Broadly speaking, this is a member of Congress'
dream," Fritts said. "It takes them out of sitting between two warring
parties."

May said he hoped that the deal would be incorporated in
pending House and Senate legislation that would, among other things, permit DBS services
to provide dish owners with their local TV signals. DBS must-carry rules would not take
full effect until Jan. 1, 2002, under several of the bills.

"In the coming weeks, it wouldn't surprise me to
see final legislation done either just before or just after the upcoming Easter
break," May said. Congress leaves for a one-week break March 26.

DirecTV spokesman Bob Marsocci could not say how many
DirecTV subscribers would be affected by the network cutoffs. He added that last
week's settlement with the broadcasters does not eliminate the need for congressional
aid.

"We'll continue to lobby Congress to ask the FCC
to set new signal-reception standards and a more accurate predictive methodology,"
Marsocci said.

Marsocci said DirecTV alone will subsidize the cost of the
antenna-discount offer, and broadcasters will not participate financially. He added that
the terms of the offer have not been finalized, such as whether subscribers needing
rooftop antennae would be given larger discounts than those who could get by with rabbit
ears.

EchoStar declined to comment specifically on the deal,
saying that it had not seen the terms. But the company pledged to continue to work with
Congress and the FCC to help meet the "needs of consumers."

Want to read more stories like this?
Get our Free Newsletter Here!
September
October

VR 20/20

The Times Center, New York, NY