Senate Bill Clears the Way For Local TV Over DBS

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Washington -- The U.S. Senate passed legislation last week
to allow direct-broadcast satellite carriers to beam local TV stations to dish owners,
removing a key regulatory barrier between DBS and market-dominant cable operators.

The bill (S. 247) passed unanimously with only perfunctory
debate Thursday night, as the Senate hurried to finish its business before heading home
for the weekend.

"We're pleased by the passage of this important
satellite legislation," Satellite Broadcasting and Communications Association
president Charles Hewitt said.

Speedy Senate consideration was also helpful to the cable
industry because it prevented cable-rate-regulation amendments from popping up out of the
blue.

Since 1988, satellite carriers have had the legal right to
beam distant-network signals to dish owners who were unable to receive the same
programming from their local network affiliates with off-air antennas.

With advances in technology, satellite carriers said they
are now able to serve many local markets with their local TV stations

The House overwhelmingly passed similar legislation April
27. The bills are not identical, so a House-Senate committee will have to draft a unified
version for both chambers to approve before the measure could go to the White House.

When the House bill (H.R. 1554) was awaiting floor action,
the White House announced general support for the bill, although Clinton administration
officials identified a few provisions that they wanted to see changed or removed.

Senate Judiciary Committee chairman Orrin Hatch (R-Utah),
the legislation's sponsor, guided his bill through the Senate under rules allowing
expedited consideration. Hatch moved the bill after adding an important amendment
sponsored by Senate Commerce Committee chairman John McCain (R-Ariz.).

Hatch, in a prepared statement, said the bill included some
technical changes, but he didn't identify them

Besides permitting DBS carriers to beam local TV signals
for the first time, the bill would require carriage for all local stations in a served TV
market beginning Jan. 1, 2002 -- a phase-in schedule opposed by small cable operators and
TV stations that are unaffiliated with the "Big Four" major networks.

The must-carry mandate applies only to the extent that a
DBS carrier has opted to offer any local TV signals in a local market.

In other key provisions, the Senate bill would:

• No longer require former cable subscribers to wait
90 days before buying network signals from a satellite carrier;

• Cut the monthly superstation copyright fee from 27
cents to 18.9 cents per signal, per subscriber, and cut the distant-network fee from 27
cents to 14.85 cents;

• Permit satellite retransmission of local TV signals
without any copyright fees under a permanent compulsory license; and

• Extend the distant and superstation compulsory
license for another five years, ending Dec. 31, 2004.

While the bill is intended to promote competition to cable,
much of the legislative debate has centered on a dispute between DBS and broadcasters
regarding which dish owners are legally eligible to purchase distant-network signals
because they are unable to receive quality off-air pictures.

The broadcast industry won an important court case against
DirecTV Inc. and PrimeTime 24 last year, in which a federal judge found that the DBS
carriers were serving several-hundred-thousand dish owners illegally and ordered the
service terminated.

The National Association of Broadcasters has been fighting
to stop the spread of illegal service and to prevent any new law from protecting service
for those whom the court has said should have their service terminated.

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