Cable operators should not be excluded from a $1.25 billion federal
loan-guarantee program designed to provide local TV service in rural markets,
according to the National Cable & Telecommunications Association.
The Agriculture Department's Rural Utilities Service is charged with
administering a new program that allows the federal government to guarantee up
to $1 billion in loans to providers of local TV signals in unserved and
underserved areas in the United States.But the RUS is concerned that EchoStar
Communications Corp.'s merger with DirecTV Inc. parent Hughes Electronics Corp.,
if approved, might moot the loan program because the merged firm is promising to
providing local TV signals in all 210 markets within 24 months of approval.
The NCTA said satellite providers with national reach are in solid position
to attract financing without government assistance and indicated that cable
operators with limited footprints might be less able to gain financing.
'Cable operators should be fully able to participate in the loan program on
an equal footing with other technologies,' the trade group said in its
three-page comments. 'Qualifications for the loan should be judged on the
relative merits of the project proposed, not the technology that proposes to
The loan program was established in 2000 under the Launching Our Communities
Access to Local Television Act (LOCAL TV).
In separate comments, EchoStar told the RUS that the merger with DirecTV
'would indeed virtually fulfill the goals of the statute without need for
monetary support from the U.S. government.'
The National Rural Telecommunications Cooperative -- a DirecTV reseller that
opposes the merger with EchoStar -- told the RUS it should implement the law on
the assumption that the merger won't be approved and, thus, that service to all
210 markets won't occur.