Martin Backing DirecTV Against NAB

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Washington – Federal Communications Commission chairman Kevin Martin appears to be siding with DirecTV in a dispute with the National Association of Broadcasters over satellite distribution of local TV signals in rural markets.

In a recent to letter sent to Capitol Hill, Martin noted that a 1999 law did not require DirecTV and Dish Network to offer local TV signals in any market. The law, he added, only mandated carriage of all local stations in any market where any local station was carried via satellite.

Martin’s was replying to a letter he received from a House member who had asked the agency to force DirecTV to provide local TV signals in every market as a condition upon the transfer of News Corp.’s 38.4% controlling interest in DirecTV to John Malone’s Liberty Media.

In his letter, Martin didn’t endorse an all-market merger condition.

“Unlike the cable 'must carry' statute that requires all cable systems to carry all local stations [sic], Congress chose not to require satellite operators to carry local broadcast signals in every market,” Martin’s letter said.

Martin noted that DirecTV served 144 markets today and planned to add six more in the near future. He explained that in markets not served via satellite, DirecTV would deploy a set-top box that would receive digital local TV signals and integrate them seamlessly into tiers that included satellite-delivered channels.

“DirecTV has represented to the [FCC] in the license transfer proceeding involving Liberty Media that it is fully committed to offering local broadcast signals in all 210 [local markets] by 2008, either via satellite or via the integration of digital tuners into set-tops boxes,” Martin wrote.

Martin’s letter comes amid a dispute between NAB and DirecTV at a time when Liberty is trying to get the FCC to wrap up its review of the deal. Martin said on Feb. 8 he wanted to approve it by Feb. 26.

The NAB wants DirecTV to use its satellite capacity to distribute local signals in every market, claiming News Corp. promised to do so in 2003 when the FCC agreed to let Rupert Murdoch’s media conglomerate take control of the satellite TV giant.

For its part, DirecTV is insisting that it never promised to serve every market via satellite. Instead, DirecTV is developing a set-top box that can directly receive local digital TV signals at no extra cost. DirecTV is hoping to use the set-top strategy in the country’s smallest 50 or 60 markets, which include about 5% of the total U.S. population.

In a Feb. 19 letter, the NAB called on the FCC to force DirecTV to provide “local-into-local” service in every market by the end of the year because the FCC and “the television industry understood the original commitment to be a promise to deliver local television stations in their markets by means of satellite.”

DirecTV, now offering local TV service via satellite in 144 markets, has told the FCC that the NAB’s understanding of the five-year-old News-DirecTV merger conditions was inaccurate.

“[The FCC] did not impose any condition that would have required DirecTV to provide local-into-local service by satellite in all 210 markets,” DirecTV told the FCC last year in a filing.

Support for DirecTV’s position can be found in a statement issued in 2003 by FCC Democrat Jonathan Adelstein, who voted to reject News Corp.’s takeover of DirecTV because of an absent local-into-local requirement that covered every market.

“I felt strongly that the [FCC] should require DirecTV to provide real local-into-local service, meaning every local broadcast television signal, over satellite to all 210 television markets across the country by 2006,” Adelstein said.

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