House Eyes Distant-Signal Cutoff

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Washington -- With pressure building on Congress to act,
House Commerce Committee chairman Tom Bliley (R-Va.) said last week that he wants to begin
work immediately on a bill that will allow home-dish owners to continue watching
distant-network signals.

Bliley, who might be serving his final term as chairman,
told reporters that he wants to start on the bill "just as quickly as I can."
The chairman said last month that the bill was his top legislative priority in the 106th
Congress, which began last week, but which is not expected to begin serious work until
Jan. 19 at the earliest.

The stakes got higher last week, after a federal judge in
Miami ordered PrimeTime 24 to terminate distribution of distant-network signals of CBS and
Fox to ineligible home-dish subscribers in a two-step process that begins Feb. 28 and ends
April 30.

The cutoff date, according to the Satellite Broadcasting
and Communications Association, could result in 2.2 million dish-owners losing access to
the primetime sports and entertainment programming of CBS and Fox, and the backlash felt
on Capitol Hill could be profound.

One direct-broadcast satellite analyst predicted that
dish-owners would flood Congress with complaints.

"It will be nuts. You'll never see another thing
like this," said Jimmy Schaeffler, a DBS analyst with The Carmel Group.

Rep. Billy Tauzin (R-La.) -- who was re-elected last week
as chairman of the House Telecommunications Subcommittee -- would not predict when he
would begin work on the satellite bill, which entails revisions to the Satellite Home
Viewer Act.

Any bill, Tauzin said, would have to address the feud
between local broadcasters and satellite companies about the importation of
distant-network signals; authorization of DBS carriers to beam local signals into their
home markets; and must-carry obligations when a DBS carrier elects to provide local-TV
signals in same local market.

Tauzin said he doubted that the pending Federal
Communications Commission rulemaking would clear up who in a TV market can't get a
clear over-the-air TV signal and, therefore, who is eligible under the SHVA to buy
distant-network signals from DBS distributors of PT24.

"My guess is that they will make a cut at it, and it
will not be adequate," Tauzin added.

Rep. Rich Boucher (D-Va.) -- who represents a mountainous
region in southwest Virginia, where local-TV signals aren't always clearly received
-- said he was counting on the FCC to ensure that a huge cutoff does not occur.

He added that Congress could not pass a controversial piece
of legislation before the Feb. 28 and April 30 termination dates.

"I am counting on the FCC to get this done,"
Boucher said. "[FCC chairman William] Kennard needs to understand that he must get
this done."

"I think that everyone is sort of looking in the
[FCC's] direction right now," said Andy Wright, the SBCA's vice president
of government and legal affairs.

The FCC is in a tight spot because the National Association
of Broadcasters is vigorously opposed to a decision that would shrink the audience size
(and advertising base) of local network affiliates due to the importation of identical
network programming from a distant market.

"No one elected the NAB," Boucher said, in
response to a question about the chances of overcoming that association's lobbying
clout.

The NAB's television board -- which is meeting this
week in Naples, Fla. -- is expected to review its policy position on satellite
legislation, especially with regard to must-carry obligations, an NAB source said.

Like the cable industry, the NAB last year eventually
agreed to a phase-in of must-carry, rather than insisting upon full and immediate carriage
of local-TV stations in a market.

But EchoStar Communications Corp.'s acquisition of
additional spectrum in its satellite deal with News Corp. could undermine EchoStar's
position from last year that it did not have the channel capacity to comply with full
must-carry on the day that it initiated service.

"If they have more spectrum to carry the programming,
perhaps it makes it easier for us to resolve" the must-carry issue, Tauzin said.

An EchoStar source noted that the company does not believe
that it has to comply with full must-carry at the outset because it lacks market clout.
Furthermore, the source explained, EchoStar plans to use the additional spectrum to offer
multiple services, including data and high-definition TV.

Cable-industry sources said last week that their position
from last year has not changed: They will support a local DBS bill with a phased-in must
carry plan, but the legislation must include a date-certain for carriage of all local-TV
signals in a market.

And cable sources said they would still reserve the right
to oppose satellite legislation if it became a vehicle for new a round of cable-rate
regulation, new program-access rules and government mandates on cable carriage of
digital-TV signals.

If those conditions are met, and broadcasters and satellite
carriers can resolve their distant-signal battle, one cable-industry source predicted that
"the bill will move" through Congress.

Rep. Richard Burr (R-N.C.) -- a Commerce Committee member
who reintroduced his local-DBS legislation last week -- said he would prefer to steer
clear of cable-regulation measures in his bill.

"If the right satellite bill is passed, there is no
need to regulate cable, because the competition will be there," Burr said.

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