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EchoStar and DirecTV Dispute Affiliates' Concerns Regarding SHVERA

EchoStar and DirecTV are circulating to members of the House Commerce and Judiciary Committee a three-page point-by-point response to broadcast affiliates' concerns about importing local stations into markets that straddle state lines.

According to a copy of the document supplied to B&C, the satellite companies ask the legislators to "Support TV Choice" and not to let broadcasters "continue to hold TV viewers hostage."

DirecTV and Echostar identify what they say are broadcaster myths, including that consumers have a choice of local channels, that blacking out network programming is a solution, that broadcasters will be driven out of business, that they would lose retransmission consent bargaining leverage, that the current Nielsen DMA system makes sense, and that local markets make geographic sense.

Instead, they argue, consumers must "take what they are given," blacked-out channels are not consumer friendly, local broadcasters would get more retrans compensation, broadcasters would retain their "advantageous" bargaining position, and many consumers live nearer to a neighboring market.

At issue is whether satellite companies will be allowed to import signals from adjacent markets in DMA's that cross state lines. The satellite companies say there are 45 states where some viewers, by law, get out-of state signals rather than in-state ones.

The heads of the affiliate associations have told Congress that allowing such importation would weaken broadcasters' retrans position, would decrease the value of programming that is supposed to be exclusive, and is unnecessary because local news and sports programming can already be imported, so long as the duplicative network and syndicated programming is blacked out. Granting importation of adjacent-market signals to the split markets, they argued, would constitute "a free copyright license to televise the same, duplicating broadcast entertainment and sports programming that local television stations buy in the open market."

Affiliates pulled out all the stops, invoking the economic crisis, the broadband stimulus package and suggesting multichannel video would rule the media universe.

Prodding the flurry of letters on the subject is the draft of a bill floating around from Rep. Mike Ross of Arkansas that would allow multichannel video providers, cable as well as satellite, to retransmit in-state TV signals in split markets. The bill would waive the non-duplication rules in that instance, and would not allow retrans deals to be written so as to prevent distant signal importation to adjacent "underserved" areas.

The Communications Subcommittee and the Judiciary Committee in the House are currently considering the proposal as part of the re-authorization of satellite companies' blanket license to retransmit distant network TV station signals (The Satellite Home Viewer Extension and Reauthorization Act, or SHVERA).

House Communications Subcommittee Chairman Rick Boucher (D-VA), has not ruled out allowing cable operators to also import adjacent-market signals in similar circumstances as part of any changes to the blanket license, though he has not ruled it in, either.