Satellite TV bill passed by House; Vote is 411-8; Senate expected to act by week's end; DBS surging in popularity; Law could pave way for the dish to compete fully with cable


The House of Representatives passed legislation last night that would allow satellite companies to carry local TV channels and become more competitive with cable providers, allowing millions of satellite television viewers to watch local TV news, weather and sports broadcasts, just as cable owners now do.

The measure passed by a vote of 411-8.

The Senate is set to act on the matter before it recesses this week until January.

Proponents said the proposed law could pave the way for satellite companies such as DirecTV and Echo- Star to compete fully with cable television providers, but skeptics said it fails to go far enough.

Satellite television, sometimes referred to as direct broadcast satellite technology or DBS, has rocketed in popularity in recent years.

In mid-1994, there were 70,000 DBS customers. There are now more than 7 million, with 30 million expected within eight years.

This proliferation of pizza-size satellite dishes has come in no small part as a result of popular disenchantment with cable TV companies, many of which have developed reputations for poor customer service.

However, there was a major barrier standing in the way of DBS: the satellite companies were legally barred from carrying local broadcast stations.

This put DBS at a disadvantage in its battle against cable providers, which are permitted to carry broadcast channels.

This bill "is designed to put satellite on a competitive equal footing with cable," said Rep. Billy Tauzin, the Louisiana Republican who chairs the House Commerce telecommunications subcommittee.

The measure would protect hundreds of thousands of satellite subscribers who now get the broadcast channels but were slated to have that service cut off. It requires that satellite companies that carry any local broadcast stations carry all of them by 2002.

This so-called "must-carry" provision is what compels cable companies to carry all local stations rather than merely cherry-pick the most popular ones and devote the remaining channel space to more lucrative cable networks.

Broadcasters would have preferred that satellite companies conform to must-carry rules sooner rather than later. "We've had to swallow hard and accept a delay on must-carry," said Dennis Wharton, a spokesman for the National Association of Broadcasters in Washington.

The cable industry, not surprisingly, had the same complaint, but saw the legislation as a way to silence critics who say cable has a monopoly on subscriber-TV service.

"There should be no question about the competitiveness of the multichannel video marketplace once this passes," said National Cable Television Association spokesman Scott Broyles.

Yet, not everyone feels the bill goes far enough to even the scales. EchoStar Communications Corp., a Littleton, Colo.-based DBS company, objected vehemently that the legislation would force it and other satellite providers to pay more for network programming than cable companies do. Echo- Star's stock fell $4.50 to $73.50 yesterday.

Gene Kimmelman, the co-director of the Washington office of Consumers Union, said in a statement that the bill "does not ensure that cable's competitors have access to local channels under comparable prices, terms, and conditions. That makes it more difficult for these upstarts to compete effectively against cable monopolies."

The Associated Press contributed to this article.

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