Broadcasters Fight SHVERA Modifications
The debate about which broadcast signals satellite operators can carry into
each designated market area continued this week on Capitol Hill. Broadcasters
want to keep a lid on signal importation from outside markets to protect
incumbent stations. Satellite operators can import distant signals to
households that have no local, over-the-air reception, but they want more
flexibility for several reasons, including leverage in retransmission
negotiations with broadcasters.
This distant signal issue has been at the heart of each renewal of the
Satellite Home Viewer Extension and Reauthorization Act--SHVERA--due again this
“If a cable or satellite system serving one community is permitted to import
the same programming from distant, out-of-market stations, the viewing audience
of the local station will be fragmented--advertising rates will plummet--and
the ability of local television stations to provide costly local news, weather,
emergency information, and local public affairs programming will, plainly, be
diminished,” Paul Karpowicz told the Senate Commerce communications
subcommittee during a hearing on Wednesday.
Karpowicz (pictured right) is chairman of the TV board of the National Association of
Broadcasters and president of Meredith Broadcasting’s 11-station group. He
urged the subcommittee to reject market-modification proposals that would allow
DirecTV and Dish Network from importing duplicate, distant signals. He said the
DBS operators were already allowed to negotiate with stations directly for
carriage of local news and public affairs programming with no change to SHVERA
law. Cable operators do so, but DBS operators so far have not, he said.
“Our station in Atlanta has signed an agreement with a cable operator in
northwest Georgia to allow it to carry non-duplicating, locally originated
programming to Georgia residents in the Chattanooga, Tennessee, market,”
Karpowicz testified. “Similar in-state carriage arrangements with local
television stations exist across the country. Regrettably, satellite carriers
have refused to participate in these carriage arrangements.”
The wholesale importation of distant signals would interfere with contractual
agreements between stations and networks, he said.
For satellite operators, adhering entirely to broadcast market boundaries is
somewhat complicated. The service is typically distributed via East and West
Coast feeds. Current law directs DBS to “carry one, carry all” broadcast
signals in a given market, but lawmakers have pushed the industry to carry
“local-into-local” signals in all 210 DMAs. Neither DBS operator has completed
the task. DirecTV provides local stations in 152 markets; Dish, 182.
The broadcast lobby supports the completion of local-into-local in all markets,
but DBS executives say its cost prohibitive. Dish Executive Vice President and
General Counsel Stanton Dodge told the subcommittee that the DBS had 29 markets
remaining, and it would cost around $35 million to build the infrastructure for
delivering local TV signals. Recurring costs would be around $15 million a year.
“Our ability to recoup this substantial investment is constrained by the small
size of many of the remaining markets. For instance, there are fewer than four
thousand households in the Glendive, Mont. designated market area. This
provides very few potential households to subscribe to our service to help
defray those costs, yet the costs to provide a local-into-local service are
largely fixed,” he said in prepared testimony.
“Launching 29 additional markets would require us to find or create capacity
for approximately 100 additional channels on a system that is effectively at,
or near, full capacity today.”
Dodge went on to note that in 26 of those 29 markets, at least one of the big
four broadcast network affiliates--ABC, NBC, CBS and Fox--is unavailable as a
primary fee. He urged lawmakers to allow DBS operators to serve these “short
markets” with imported signals.
Karpowicz countered that secondary broadcast digital feeds should instead be
“KBAK-TV, the CBS affiliate in Bakersfield, California, now carries Fox network
programming on a multicast channel and presents separately originated local
news and other localized program services on that channel as well. With the
switch to digital last June, this trend will continue and the number of short
markets should be substantially and rapidly reduced,” he testified.
DBS operators also want the right to import distant broadcast signals to
households that don’t receive in-market stations over-the-air. The only problem
is that the digital transition made obsolete the old analog metric for
determining eligible households. Robert Gabrielli, senior vice president of
program operations for DirecTV, said that 45 percent of the addresses now
ineligible for distant signals can’t receive over-the-air signals, according to
an evaluation from TitanTV.
“Consumers prefer local service and the law rightly reflects this. But we
cannot yet deliver all of the thousands of local broadcast stations in every
market. Where our subscribers cannot receive local service, the law should let
us give them distant signals instead,” Gabrielli said.
Until a new digital metric is determined, Karpowicz suggested grandfathering in
distant signals allowed by the previous determination.
“In the spirit of compromise, we will not oppose satellite carriers retaining
their existing lawful distant signal subscribers who were unable to receive a
Grade B analog signal from a local network station--even though those
subscribers may now receive a perfectly good digital network signal from that
same local network station,” he said. “We also would not oppose allowing
satellite carriers to deliver a distant network signal to subscribers in
non-local-into-local markets who would qualify under the new digital service
standard, but who previously did not qualify to receive a distant analog signal
under the Grade B analog standard. In short, in this respect, the satellite
carriers will receive the best of both worlds.”
SHVERA has passed through the Senate Judiciary Committee and now awaits
Commerce Committee approval. A slightly different version, H.R. 2994,
was passed by the House Communications subcommittee in June and also awaits
full Commerce Committee approval.
-- Deborah D. McAdams
July 15, 2009: “Congressman
Bows Bill to Import TV Signals”
Arkansas Democrat Mike Ross is pushing legislation to overturn the current
rules governing which broadcast signals satellite and cable operators can
carry. Ross is member of the House Energy and Commerce Committee, where he
intends to refer the so-called “Local Television Freedom Act of 2009.”
June 25, 2009: “SHVERA Passes House
The only changes to the legislation as it was written in 2004 were the date and
the provision to measure digital signal coverage using the Longley-Rice model
employed by the FCC. The bill renews satellite carriage of certain
out-of-market broadcast signals for another five years.
June 16, 2009: “Broadcasters Battle for
The broadcast lobby is playing the localism card in a big way as Congress
considers the renewal of the Satellite Home Viewer Extension and
May 8, 2009: “ACA Says Retrans is
Squeezing Too Hard”
The cable industry has not yet rolled over on retransmission consent, whether
or not it comes up in pending satellite copyright legislation. The American
Cable Association this week released a summary of how broadcasters reaped hefty
retrans fees from cable operators in the first quarter of this year.
March 30, 2009: “Network Affiliates Urge
Lawmakers to Preserve Distant-Signal Limits”
CBS and NBC are urging key lawmakers to maintain restrictions on what TV
stations cable and satellite operators can carry in a given market.
(Image by bobthemtnbiker)