Satellite companies could experience a three-fold increase in sales in the next year if the bill becomes law, experts say. Some predict that satellite competition will hold down or even reduce fast-rising cable TV subscription rates.Satellite companies would be able to start providing local stations’ programming as soon as the bill becomes law. They then would have six months to reach required retransmission agreements with the TV networks. By 2002, companies that carry any local broadcast stations would have to carry all of them in a given market.
“When we launched the business two years ago, the major barriers were price and local channels,” said Bob Marsocci, spokesman for DirecTV, which has 7.7 million subscribers across the country. “The price of the units then was $700.
Now, the price is around $100. We really feel that this will eliminate the final barrier for consumers.” Marsocci said DirecTV, owned by General Motors’ Hughes Electronics, will offer local channels within 48 hours of the time Clinton signs the bill.
The number of satellite dishes in Michigan is booming. As of last month, about 526,000 Michigan television watchers had satellite dishes, according to the Satellite Broadcasting and Communications Association in Alexandria, Va. That represents a 154-percent increase over December when 207,000 Michiganders had satellite dishes.
Those numbers mean that 14.4 percent of the state’s television watchers have satellite dishes. The national average is 12 percent. Satellite dishes reach as many as 30 percent of homes in states with high rural populations, which often don’t have access to cable.
Mike Allan, who operates the Satellite Guy, a dish system and installation business in Addison, Texas, said his customers have been frustrated for years by their inability to get local stations easily. Many, he said, get basic cable to go along with their satellite dishes.
“We have been waiting for this for years and it seems like it’s about time,” he said.
The Satellite Guy’s customers have plenty of company. Satellite service providers such as DirecTV and EchoStar, the biggest satellite broadcasters, have tens of millions of subscribers across America.
Robert Rini, a Washington telecommunications attorney, said the measure should not only give cable televisions companies more competition, but also lower prices for both cable and satellite subscribers.
“Consumers get a better choice, more value and a more competitive price,” he said.
But only one of the two satellite giants is happy about the bill. EchoStar CEO and Chairman Charlie Ergen said the bill is “anti-consumer, anti-competitive to cable, and is a sellout to the special interests of network broadcasters.”
His main complaint was that the bill does not provide a framework for satellite companies to use when negotiating with the broadcast networks.
“The bill provides no language for broadcasters to deal fairly with satellite providers in negotiating the rights or fees to retransmit their signals,” he said. “Unlike large companies like General Motors, smaller companies like EchoStar are at a disadvantage when it comes to paying higher prices than cable for network programming.”
Sen. Patrick Leahy, D-Vt., a co-sponsor of the Senate version of the bill with Republican Sen. Orrin Hatch of Utah, said he hopes the measure clears Congress this year, although opposition from Texas Republican Sen. Phil Gramm may prevent that.
“This bill will level the playing field for cable and satellite dish companies by encouraging head-to-head competition, and that should lead to lower cable bills for all consumers in the long run,” said Leahy.
Gramm objects to a provision buried in the bill that provides $1.25 billion in loan guarantees for satellite companies to build the infrastructure to serve rural communities.
A Gramm spokesman said the senator will block the bill from consideration in the Senate if the provision remains. Supporters of the bill said they can bypass Gramm’s opposition, but it won’t be easy.
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