New York -- DirecTV Inc. president Eddy Hartenstein told
the SkyFORUM conference here that his company is prepared to send local broadcast channels
in the top 20 markets to subscribers using the direct-broadcast satellite receivers and
18-inch dishes that are already in the field -- after Congress passes favorable
Hartenstein called the lack of local channels "the
last remaining barrier to closing [DBS] sales."
The company had been expected to air most of its local
channels -- except the Los Angeles and New York stations that also serve eligible
distant-network subscribers -- from the 119 degrees west spectrum it acquired through a
transaction with PrimeStar Inc.
The decision saves DirecTV from a big capital expense,
Credit Suisse First Boston analyst Ty Carmichael said.
Now, DirecTV, with more than 5.5 million high-power DBS
subscribers, won't need to spend millions of dollars to swap out equipment for
customers who want broadcast feeds.
Many of those subscribers lost access to
satellite-delivered distant-network signals over the summer, following a shut-off imposed
by a Federal District Court in Miami.
EchoStar Communications Corp. could face a similar shut-off
order from the Miami court as early as this week, industry insiders said last week.
Hartenstein said DirecTV has been "squirreling away
bandwidth" at its 101 degrees west orbital slot, from which it already provides a
robust channel lineup, including dozens of pay-per-view movies and subscription sports
packages. Advances in compression algorithms will help to free up more channel capacity.
The company will also gain capacity from the higher-power
replacement satellite it expects to launch at 101 degrees next month.
DirecTV could have an 80-channel, local-market service
ready within days of a Congressional go-ahead, Hartenstein said, adding that the company
would advertise the new service aggressively as soon as it's available. Pricing has
not been set.
EchoStar CEO Charlie Ergen, a longtime proponent of
satellite-delivered local channels, said last week that he's pleased to see DirecTV
support this aspect of the business.
"That fact that they'll go out and advertise
local to local is good for us," Ergen said, because the publicity will spill over to
the company's own local market push.
"We've got a tough job ahead of us," he
added, "because cable has spent the past few years telling people that local channels
are not available on satellite."
EchoStar is already selling local channels on a limited
basis in several markets.
Because most of the local stations are broadcast from
satellites other than those used by its core service, most current local-channel
subscribers need second dishes. That's likely to change once the company migrates its
core service to a different location and rolls out new dishes that can see satellites at
both locations. Current Dish Network receivers can access programming from any of
The National Rural Telecommunications Cooperative -- which
controls the rights to sell DirecTV programming on 27 of the 32 current transponders in
certain rural markets -- wants the DBS industry to ensure that all broadcast markets
across the country have access to local broadcast channels via satellite.
But NRTC CEO Bob Phillips said he still favored
DirecTV's news. Some rural subscribers might choose to buy local-station packages
from the nearest top-20 market if new legislation allows it, he added.
Getting the appropriate retransmission consents should not
be an issue for DirecTV, which has already begun negotiations with broadcasters,
But Ergen called for legislation that would mandate
equitable retransmission-consent agreements for all multichannel-video providers.