MSOs: DBS Offer No Cause For Alarm


Seth Morrison, the Cable & Telecommunications Association for Marketing senior vice president of marketing, said the newly announced local-into-local campaign by DirecTV Inc. and EchoStar Communications Corp. shouldn't overly alarm cable operators, particularly because the digital-broadcast satellite duo already delivers local channels in most larger cable markets today.

That could be wishful thinking, DBS analysts say.

"For some systems and MSOs to say DBS is not an issue is unbelievable," B.G. Marketing Inc. president Barbara Rhoerig said. "Local-into-local into 210 markets is going to make a huge difference."

Local-into-local packages have proven to be an important strategic and marketing tool for DBS, Alpert & Associates president Mickey Alpert noted. "People want their local services in addition to the national general entertainment, and it's much easier to get it all from one place rather than to put up an off-air antenna."

Cable One president and CEO Tom Might said the local-channel proposal should be popular. But he sounded confident, overall.

"It will certainly make the [DBS] product slightly more attractive," Might said. "But we've already got the local channels, so it just brings them closer to our level."

Like other cable operators, Cable One has used local-channel availability as a marketing edge over satellite.

In some markets, Cable One will still offer more local channels than DBS, because in its non-rural towns, it often brings in network feeds from many directions, Might noted.

Cable One, with a focus on "big towns and small cities," offers cable-modem service in 91 percent of its footprint, Might said, although the company's average head-end serves 17,000 customers.

Cable still has an important weapon against satellite: high-speed Internet access. Some systems with as few as 5,000 homes have cable-modem availability.

Despite what the DBS companies might say, "they're going to have a hard time" offering broadband anywhere there's a competitive offering, including some parts of small-town America, Might said.