Ergen, NAB Clash Over HDTV

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EchoStar Communications Corp. chairman and CEO Charlie Ergen is scheduled to pay a visit here Thursday (March 4) to deliver a speech in which he will seek support for a legal change that has the TV-station establishment in an uproar.

Ergen has a knack for annoying the National Association of Broadcasters. The trade group, which is dominated by hundreds of independent affiliates of ABC, CBS, NBC and Fox, has invested a small fortune in trying to get the courts to punish Ergen's Dish Network for allegedly violating federal copyright law on massive scale.

PACKAGE PLAN

So far, Ergen has fought the NAB to a draw in a case that is still on appeal.

Ergen's latest plan is tailored to meet consumer demand for high-quality programming in the rapidly growing digital-TV marketplace. What he wants is the authority to take HDTV feeds from network affiliates in New York and Los Angeles and sell them in packages to consumers around the country who can't pick up the same programming locally, via an off-air antenna.

The plan would, if adopted, represent a sizable expansion of the Satellite Home Viewer Improvement Act of 1999 (SHVIA), which already allows satellite importation of distant analog network signals but only to a limited class of consumers.

Local TV affiliates fear that importation will erode their audience base and cut their ad revenue — worries which make them hostile to schemes that threaten their lifeline.

The affiliates are especially concerned about Ergen, whom they consider a renegade who has knowingly sold distant signals to hundreds of thousands of legally ineligible consumers.

In testimony before a House Judiciary subcommittee last Tuesday, EchoStar senior vice president and general counsel David Moskowitz argued that TV stations who've been loaned valuable spectrum by the federal government have failed to shift to DTV expeditiously, leaving millions of households without access to network HDTV fare.

Allowing EchoStar to provide network HDTV programming to the "digitally unserved" would take consumers off the high-definition starvation plan and motivate local TV stations to ramp up their HD efforts, Moskowitz added.

Technically, Moskowitz testified on behalf of the Satellite Broadcasting & Communications Association, which includes DirecTV Inc. EchoStar sources said DirecTV supports Ergen's HDTV plan. A DirecTV spokesman did not respond to a reporter's question.

For Ergen's plan to succeed, Congress needs to change copyright law. Current statutes generally say that if a consumer can pick up an affiliate's analog signal with an off-air antenna, the consumer is ineligible to buy a distant-signal package — whether in standard-definition or HDTV format.

In his testimony, Moskowitz explained that direct-broadcast satellite's HDTV opportunity is substantial because "more than a thousand broadcasters" have defaulted on their commitment to make their DTV signals available to every household within their markets.

The NAB wants nothing to do with Ergen's plan, scoffing at the notion that 1,000 stations (out of nearly 1,400) haven't met their DTV commitments.

In his testimony, Robert G. Lee, president and general manager of CBS affiliate WDBJ in Roanoke, Va., said 92% of U.S. households today have access to off-air DTV signals.

Lee, who appeared on the NAB's behalf, said Ergen's plan was a trap because it would put local TV stations in an untenable position: Consumers would erupt and demand congressional action when told that the availability of HDTV programming locally meant they had to drop their out-of-market HD package.

"This proposal is a recipe for mischief," Lee told House Subcommittee on Court, the Internet, and Intellectual Property.

Subcommittee chairman Rep. Lamar Smith (R-Texas) told reporters he would introduce a bill within several weeks that would extend the current distant-signal license for at least another five years. Without renewal, hundreds of thousands of DBS customers would lose access to network programming after Dec. 31, 2004, and would no doubt express their displeasure to lawmakers.

NO ROOM IN BILL

Smith indicated Ergen's plan would not be included in the original bill.

"It's unlikely we will get into the digital white area," Smith said. That does not mean it won't be added later in the House or Senate.

Smith was noncommittal on a related policy clash between the NAB and EchoStar. Both EchoStar and DirecTV at present offer local TV signals in more than 100 markets that include nearly 85% of U.S. households.

The NAB wants current law changed to bar satellite carriers from offering distant network signals in markets where they provide local signals.

Jimmy Schaeffler, a DBS analyst with the Carmel Group, believes the day is not far off in which all satellite consumers will be able to use an on-screen program guide to click on TV stations from various out-of-town markets. But for now, the NAB is too powerful a force for Ergen to overcome.

"It's just to early for that kind of major change," Schaeffler said.

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