DBS Local-Market Bill Derailed


Washington -- Senate Commerce Committee chairman John
McCain (R-Ariz.) made a final push last week to move his bill (S. 2492), which would help
to open up local TV markets to direct-broadcast satellite operators.

But McCain's attempt failed when the satellite industry
refused to endorse changes supported by broadcasters.

"We supported this revised legislation, but our
understanding is that because of a split in the satellite industry, the train came off the
tracks," National Association of Broadcasters spokesman Dennis Wharton said.

Andy Paul, senior vice president of public affairs for the
Satellite Broadcasting and Communications Association, said broadcasters deliberately
endorsed a change that they knew the SBCA would not accept.

"When we went through it, it just didn't work for
us," Paul said.

With Congress set to adjourn within days, industry and
Capitol Hill sources said legislation designed to improve DBS' competitive position
vis-à-vis cable would have to wait until next year.

"There were too many industry differences to resolve
on broader legislation," a House Commerce Committee spokesman said.

However, Capitol Hill sources said there was hope, based on
House action last week, that President Clinton will sign into law a measure that would
repeal a sharp increase in copyright fees on DBS carriers when they sell superstations and
distant-network signals to home-dish owners.

McCain's bill was changed to include a provision that
barred satellite carriers from serving more than 3 percent of households on the fringe of
local TV markets with distant-network signals.

Paul said the 3 percent figure was unworkable because it
could prevent satellite carriers from serving dish owners in TV markets with hills and
mountains that could block reception of the local affiliates.

Karen Watson, chief Washington lobbyist for EchoStar
Communications Corp., said EchoStar chairman Charles Ergen did not split with the SBCA and
DirecTv Inc. on McCain's latest proposal.

"We stood with the industry," Watson said.
"We did not think that this bill was consumer-friendly."

McCain's bill tackled the must-carry and
distant-network-signals issues, while Senate Judiciary Committee chairman Orrin Hatch
(R-Utah) moved a bill (S. 1720) out of his committee two weeks ago that would authorize
DBS carriers to carry local TV signals in local markets.

There were reports early last week that Hatch was planning
to move ahead without McCain's legislation, but a Judiciary Committee source said Hatch
decided to abandon that plan.

"We worked with the Commerce Committee, but we
couldn't come to closure with the satellite community," a Judiciary Committee source

While Senate negotiations were occurring, the House passed
by voice vote Oct. 7 a bill that would roll back DBS copyright fees to 1997 levels.

Since Jan. 1, DBS operators have been paying 27 cents per
signal, per month, per subscriber to sell the four major networks and superstation WGN to
home-dish owners.

Under the bill (H.R. 2921), the old rates of 6 cents for a
network and either 14 cents or 17.5 cents for a superstation will remain in effect until
Dec. 31, 1999, retroactive to Jan. 1, 1998.

Senate sources said at least one member has placed a
"hold" on the bill, that is to use his perogative to stop it from progressing.

A Senate bill (S. 2260) passed in July would restore the
old rates retroactive to Jan. 1, 1997, but it would allow the 27-cent rate to take effect
March 31, 1999.

Rep. Billy Tauzin (R-La.), chairman of the House
Telecommunications Subcommittee, as well as Rep. Edward Markey (D-Mass.) and other
lawmakers who spoke on the House floor last week, said they were committed to using next
year to pass a bill that would allow DBS companies to beam local TV signals into their
home markets.

Tauzin said DBS competition with cable was "not
real" until DBS could package local TV signals with popular cable networks.