With regulators watching closely, EchoStar Communications Corp. and DirecTV Inc. don't plan to raise the price of local TV stations — even though both face a federal mandate to add hundreds of broadcasters by Jan. 1.
In some markets, the decision to hold rates steady would be a real boon for DBS subscribers if measured on a per-channel basis. In New York City, for example, Dish Network subscribers pay $4.99 for seven local TV stations and an extra $1 for the PBS feed.
On Jan. 1 — when Dish Network must provide all 18 New York-area TV stations — the company plans to keep the price of the package at $5.99. (Under federal rules, PBS cannot be sold à la carte if the other stations are sold in a tier.)
Depending on the market, some subscribers will need a second dish, though. "If the customers want those more obscure local channels, we will provide them the second dish and the installation at no charge," EchoStar spokesman Marc Lumpkin said.
DirecTV subscribers won't need any new equipment. Nor will they see a rise in the $5.99 price for the local signal package.
"We're charging $5.99 and we're going to continue, so all of those channels will be added at no additional charge," spokesman Robert Mercer said.
Although permitted to do so by the Federal Communications Commission, DirecTV is not planning to sell local TV stations à la carte. Lumpkin was unsure of EchoStar's à la carte plans.
Under the Satellite Home Viewer Improvement Act of 1999, DBS carriers won the right to provide local TV signals for the first time. But to avail themselves of that right, they were required to agree to carry all local TV stations in markets where they elect to carry any one station as of Jan. 1, 2002. EchoStar is in 36 local markets; DirecTV is in 41.
Over the last two years, EchoStar and DirecTV have been allowed to carry any local TV station, with the permission of the station owner. The DBS firms said more than half of their new subscribers sign up for the local-station package, which typically includes the four major broadcast networks and some strong independent stations.
Today, DirecTV is carrying 171 local TV stations. On Jan. 1, the company will add 221 stations, aided by the recent launch of a spot-beam satellite.
EchoStar's Lumpkin would not disclose the number of local TV stations his company plans to add on Jan. 1.
In October, EchoStar agreed to acquire DirecTV in a $25.8 billion deal that would create a DBS giant with at least 14.9 million subscribers. The merger is expected to undergo a tough review by the FCC and the Justice Department because it will shrink the DBS market from two major players to one.