Before the
Department of Commerce
National Telecommunications and Information Administration
Washington, D.C.
In the matter of
Rural and Small Market Access to
Local Television Broadcast Signals
Docket No. 000208032-0032-01
COMMENTS OF
THE ASSOCIATION OF LOCAL TELEVISION STATIONS, INC.
The Association of Local Television Stations, Inc., ("ALTV") hereby submits its comments in response to the assistant secretary's request for comment in the above-captioned proceeding.(1) ALTV is a non-profit, incorporated association of licensee's of local television stations not affiliated with the ABC, CBS, or NBC television networks. Thus, ALTV's membership includes not only traditional independent stations, but also local television stations affiliated with the Fox, PaxTV, UPN, and WB networks.(2)
ALTV applauds the assistant secretary's interest and present involvement in assuring access to the signals of local television stations. ALTV has been a steadfast supporter of efforts to provide widespread availability of local television stations' signals in their market areas. ALTV supported the recently enacted Satellite Home Viewer Improvement Act. With respect to off-air reception, ALTV was instrumental in efforts to modify the Federal Communications Commission's ("FCC") DTV technical rules to allow local television stations - and UHF stations, in particular - to maximize their facilities. ALTV also called upon the FCC to seek comment on the petition filed by Sinclair Broadcasting reporting problems in reception of 8VSB DTV signals and seeking modification of the FCC's technical standards to permit stations to employ at their option COFDM modulation of their DTV signals.
ALTV also is fully aware that the development of multichannel video program distributors ("MVPDs") like cable television and DBS has enhanced consumer access to the signals of local television stations.(3) Indeed, ALTV has supported continuation of the statutory copyright license under which cable systems may retransmit the signals of local television stations and, as noted above, supported legislation creating a new statutory license under which satellite carriers may enjoy the same privilege. ALTV, therefore, supports the assistant secretary's inquiry into means of providing the signals of local broadcast television stations to viewers in rural areas and small television markets.
Hand-in-hand with ALTV's interest in expanding the reach of local television stations has been its insistence that all local television stations in each market, not just those momentarily the most popular, be made available to consumers in a nondiscriminatory fashion. In ALTV's view, neither government policy nor self-serving behavior by MVPDs should diminish consumer access to the signals of all of their local television stations.(4) Only if all local television stations remain available to viewers served by MVPDs may competition flourish and the diversity of program choices provided by free broadcast television be preserved. Recent history roundly confirms this. In the wake of the 1992 Cable Act and the Supreme Court's decision upholding the must carry, many stumbling stations found new lives as affiliates of the emerging networks. The viewing public in community after community enjoys better programming from more stations, stronger stations, and additional broadcast networks. The last several years have seen the emergence of PaxTV, the seventh national broadcast television network. Meanwhile UPN and WB have emerged and gained a toehold in the market, and Fox has become established as a fourth major network. Each of these new networks has developed despite heavily UHF affiliate bases. Never would this have been possible if cable systems had been permitted to slough off carriage of weaker stations. ALTV, therefore, has been and remains at the forefront of efforts to assure that governmental policies and MVPD behavior comport with the imperative that the viewing public be provided access to the signals of all local television stations.(5)
With these objectives in mind, ALTV offers the following comments:
I. Comments on Questions 1, 2, and 3. Technical Feasibility/Trade-Offs/ Appropriateness of Particular Technologies
No television viewer need be denied access to the signals of all the local television stations in the market in which they reside.(6) Current technology is well up to the task of providing the signals of all local television stations to all viewers in their respective markets. Initially, the off-air broadcast signals of the stations provide service to the vast majority of viewers. Every television market - whether large or small - by definition is served by at least one local television station. Even the market ranked 199 among 210, Casper-Riverton, Wyoming, has five local commercial broadcast television stations.(7) Furthermore, broadcast television signals themselves are ubiquitous. However, due to distance, terrain, interference, or station facilities, some signals in a market may not be available to all viewers in the market.(8) Therefore, exclusive reliance on local television stations' broadcast signal coverage in many markets would leave some viewers without access to the signals of all local television stations.(9)
Various technologies have been employed to fill out coverage or fill in gaps in coverage.(10) Each has shown to be a feasible means of enhancing access to the signals of local television stations. First, many local television stations have relied on translators to provide their signal in areas where terrain or distance has prevented reliable reception of their original signal.(11) In the Denver, Colorado, market, for example, the Front Range of the Rocky Mountains impedes propagation of local station's signals to the area in the market west of the continental divide. There, stations have employed translators to extend their signal to communities on the other side of the mountains.
Second, cable television now is available to approximately 90 per cent of the nation's television households (i.e., these homes are passed by cable and could subscribe). Cable television originally developed as a means of providing the signals of local television stations to areas where terrain features prevented propagation of the local stations' signals. Although cable systems now provide a plethora of other non-broadcast services, they hardly have forsaken their role as conduits for local television stations' signals.(12) Cable systems now provide MVPD service to the majority of households in nearly every television market in the country. Size of market has not proven a crucial consideration in cable development.(13) In theory, it may be technically feasible to extend cable service to every household in the country, including rural as well as urban and suburban areas. Cable can be buried in mountainsides or laid under water to reach isolated mountain and island dwellings. It can be extended for miles and miles between homes in areas of low home density. ALTV will leave it to the cable industry to explain why it has been satisfied to pass some 90 per cent of the nation's television households, leaving the remaining 10 per cent to look elsewhere for local television and MVPD services. One might reasonably suspect that at a certain point of low home density, cable television simply is not an economically efficient means of distributing video programming.
Third, satellite carriers now can - and may - retransmit the signals of local television stations to viewers in the stations local markets. Little doubt may exist that a satellite carrier is technically feasible means of delivering the signal of a local television station to almost any household, regardless of location. Satellite carriers presently utilize satellites that provide nationwide "footprints," i.e., their satellite signals may be received virtually anywhere in the country. In the future, they will employ satellites with spot beams that are directed at more discrete areas, such as individual television markets. They are limited only by natural and man-made obstacles that obstruct the "look" at the satellite from certain households.(14) For example, a suburban home may lie adjacent to a forest, such that tall trees rise between the home and the satellite. Because satellites use relatively low power high frequency signals, their signals are subject to attenuation by physical obstacles (even a hard rain). Therefore, in terms of technical feasibility, a satellite carrier could provide the signals of local television stations to nearly every home in every television market, regardless of location.(15)
Fourth, other technologies also may provide technically feasible means of retransmitting the signals of local television stations to viewers in rural areas and smaller television markets. The FCC is considering, for example, whether to authorize subsidiary terrestrial use of the 12.2-12.7 GHz band now used to provide DBS service.(16) The technical feasibility of such frequency sharing has been a controversial question and remains under consideration. Similarly, video dial tone services offer much the same promise as cable television as a technically feasible means of delivering local television stations' signals. Indeed, with respect to such signal carriage, video dial tone services are regulated like cable systems. They enjoy a statutory copyright license and are subject to the same rules as cable systems with respect to broadcast signal carriage. What they apparently have not enjoyed is success in the marketplace as an over builder of incumbent cable systems.(17) Nonetheless, in terms of technical feasibility, video dial tone or open video systems offer at least the same capabilities as cable systems.
In sum, several existing technologies offer the capability to deliver local television stations' signals to viewers in their home markets.
II. Comments on Question 7. Legal Measures
ALTV submits that the current rules governing cable systems' and satellite carriers' retransmission of the signals of local television stations should be maintained. In essence, this includes a statutory copyright license accompanied by rules assuring that cable systems and DBS provide the signals of all local television stations to viewers in the markets they serve. This will assure that a diverse array of free broadcast television programming from local television stations will remain available to all viewers. This is precisely what Congress intended in enacting the rules. Furthermore, maintaining the current regulatory regimes will foster satellite delivery of local television station signals to viewers in small, as well as large markets.(18)
No more controversy rightfully may exist about the benefits of rules that assure that local television stations suffer no discrimination at the hands of MVPDs in their markets.(19) The continued availability of a full menu of local television stations, providing free, ubiquitous service to all viewers, not just those who subscribe to an MVPD, is a substantial government interest that supports imposition of local carriage rules. As the FCC repeatedly has acknowledged:
Broadcast television's universal availability, appeal, and the programs it provides -- for example, entertainment, sports, local and national news, election results, weather advisories, access for candidates and public interest programming such as education television for children -- have made broadcast television a vital service. It is a service available free of charge to anyone who owns a television set, currently 98% of the population.(20)
Indeed, the Court's decision in Turner Broadcasting Company v. Federal Communications Commission, 1997 LEXIS 2078, 23-24 (1997)[hereinafter cited as Turner II], underscores that preserving and promoting free, universally available, local broadcast service is an important government interest, particularly with respect to the interests of viewers who rely completely on free, over-the-air television.(21)
Reality continues to reflect the Court's quite accurate perception of broadcast television service. In the words of Al DeVaney, president of Newsweb Broadcasting, licensee of television stations in Chicago and Denver:
All of us define ourselves first as local television stations. All of our programming decisions reflect our efforts to serve our particular local communities. Every minute of programming on our stations, be it public affairs, entertainment, or news or sports, appears on our schedules because we consider it most responsive to the needs, interests, tastes, and concerns of our local communities. Our ability to reach and engage our local audiences is the key to our success.
The point is we are still a hometown station. We are their local source. Our studio is up the street. Our antenna is down the road. We share the same concerns about government, about schools, about local teams, about the weather. As much as every local station serves its community, it is a part of that community, as well.(22)
Thus, Congress, in enacting the Satellite Home Viewer Improvement Act, found it significant that "television broadcast stations provide valuable programming tailored to local needs, such as news, weather, special announcements and information related to local activities."(23)
Significantly, the Congress, with the Court's blessing, would not be satisfied with carriage of some core or rump group of local television stations. When it enacted the Communications Act of 1934, Congress sought to engender a system of local broadcasting, where as many communities as possible had their own station or stations. Consequently, the Federal Communications Commission ("FCC") has allotted television channels in such a way that provides larger communities with more stations, but also assures that many smaller communities have their own station or stations, as well. (24) Thus, for example, while Denver and Chicago have multiple stations, many smaller communities still have at least one or two channels assigned to them. Over 30 years ago, when the FCC allotted channels to hundreds of communities across the country, it had a dream and hope that each and every channel someday would host a vibrant local television station. Today, we can safely say that that dream has come true.
To protect that dream come true, Congress has required cable systems and DBS systems to comply with local carriage rules that assure that in any given market, all local stations are carried. As the court observed in Turner II:
Congress' evident interest in "preserving the existing structure," 512 U. S., at 652, of the broadcast industry discloses a purpose to prevent any significant reduction in the multiplicity of broadcast programming sources available to noncable households. To the extent the appellants question the substantiality of the Government's interest in preserving something more than a minimum number of stations in each community, their position is meritless. It is for Congress to decide how much local broadcast television should be preserved for noncable households....(25)
Congress made the same decision in the SHVIA, pointing out that, "[A]bsent must-carry obligations, satellite carriers would carry the major network affiliates and few other signals." In essence, the whole point of local carriage rules is assuring that all local television stations are not prevented from reaching their audiences.
Local carriage rules preserve free, locally-oriented broadcast television service by preventing intermediary MVPDs from interdicting the signals of local television stations and thereby depriving local television station's access to the viewing audience in its market. In preserving access to audience, they preserve the ability of a station to succeed - if it provides programming found responsive to the needs, tastes, and demands of its local audience.(26) Station revenues, of course, are directly proportional to a station's audience.(27) Moreover, the ability of a station to produce or acquire quality programming to attract an audience depends on revenue.(28) If a satellite carrier or cable system could deprive a station of access to a portion of its potential audience, that station's service to its community would suffer. In a worst case, the station could fail.(29) Ultimately, the viewing public suffers a decline in the quality and quantity of free broadcast television service.(30) This is what Congress has sought to prevent in enacting local carriage requirements for both cable systems and satellite carriers.(31) Therefore, local carriage rules provide demonstrable benefits to the public.
Arguments that local carriage requirements, when applied to satellite carriers, pose a barrier to provision of local-into-local service in smaller markets are too pretty and too pat to be credible. Satellite carriers argue in essence that local carriage requirements will devour capacity in larger markets, leaving none left over for local-into-local service in smaller markets. This statement, however, speaks only to the demand for satellite capacity. If satellite capacity were finite and fixed, then satellite interests might have a point. Given their economic interest in serving the largest markets first, that capacity would be exhausted more quickly (i.e., over fewer markets) if all stations in those markets were carried, rather than four or five stations per market. Carriage of only a few stations serves the satellite carriers economic interests because the carrier - with no expansion of its capacity - could serve more markets. The marginal cost of adding additional markets in such case is, indeed, minimal. Recent experience has proven that this is just what the satellite carriers would do. They are using existing capacity to provide local-into-local service, consisting of four or five signals in the largest markets.(32)
None of this speaks to the supply side of the matter. The implicit assumption of their argument is a finite and fixed supply of satellite capacity. Indeed, in the absence of local carriage requirements, existing satellite carriers would have no incentive to invest in new satellite capacity and deploy advanced technologies like spot beams to provide a truly nationwide local-into-local service. As long as they believed they could get away with providing just the signals of the biggest stations in the biggest markets, this sort of cream skimming would continue. Local-into-local service would consist of four or five of the most popular stations in the largest markets. Absent a public policy spur to deploy widespread and complete local-into-local service, technology and capacity would have stagnated primarily at the expense of small market and rural viewers.(33)
The new local carriage rules have provided that spur. With a local carriage requirement looming over them, however, both DirecTV and EchoStar have moved quickly to expand capacity. (34) This capacity expansion will involve not only more satellites, but also more technologically advanced spot-beam satellites. Spot beam satellites direct signals to discrete areas. Their footprint may be limited to only a few local markets. This presents the opportunity for re-use of frequencies and greatly expands the capacity of a satellite. No incentive to expand capacity and use improved technologies would have existed in the absence of the local carriage rules. Consequently, the development of capacity to provide carriage of all signals in all markets would have been stymied.
Therefore, for the myriad of reasons described above, ALTV reiterates its support of local carriage rules, not only as an essential means of preserving the benefits of free broadcast television service, but also of promoting development and deployment of satellite and other technologies to provide a full array of local television station signals to all television households.
Respectfully submitted,
James J. Popham
Vice President, General Counsel
Association of Local Television Stations, Inc.
1320 19th. Street, N.W., Suite 300
Washington, D.C. 20036
(202) 887-1970
April 14, 2000
1. 65 Federal Register 7362 (Monday, February 14, 2000).
2. Among the independent stations are local television stations with specialized formats (e.g., foreign-language, ethnic, religious, etc.). ALTV also takes this opportunity at the outset to emphasize that number of local stations with home shopping or infomercial-heavy formats is very small and declining. Information available to ALTV indicates that fewer than 25 such stations still exist. Moreover, most of the remaining home shopping stations already are scheduled to convert to conventional program formats at the conclusion of their existing affiliation agreements with home shopping networks. ALTV makes this point because such stations have been demonized by some and their numbers greatly exaggerated by others in the course of the many discussions of satellite delivery of local television stations. When all is said and done, such stations represent a diminutive and declining number of the local television stations in operation today. Notably, the home shopping format on broadcast stations largely was a product of the lack of must carry rules prior to the 1992 Cable Act. Many new and marginal stations, which were refused carriage by local cable systems, turned to home shopping as a means of survival. Since the new must carry rules for cable became effective, many of these stations have gained sufficient economic strength to discontinue their home shopping formats. Of these, many have become affiliates of the emerging UPN and WB networks. In short, they have gained a foothold and begun to provide an increased diversity of informative and entertaining programming to their communities.
3. ALTV does continue to take issue with the notion that cable carriage of local UHF station signals has eradicated the so-called UHF handicap.
4. The economic interests of MVPDs does not extend, for example, to assuring that viewers who do not subscribe to an MVPD service retain the benefits of full diverse array of free, local broadcast television service. Indeed, to the contrary, their interests tend towards weakening competition from free media. See Haring, John, Strategic Policy Research, The Economic Case for Digital Broadcast Carriage Requirements (October 13, 1998), a copy of which is attached hereto.
5. See Section II, infra.
6. By television market, ALTV means the "designated market area" or "DMA." The well-known television ratings firm, Nielsen Media Research, assigns every county in the country to a DMA, based on viewing patterns in the county. Thus, for example, if stations in Washington, D.C., garner the largest share of viewing in Montgomery County, Maryland, then Montgomery County would be (and is) assigned to the Washington, D.C. DMA. Some markets are named for a single community ( again, e.g., Washington, D.C.), whereas others are so-called "hyphenated" markets, named for several communities with stations in the same DMA (e.g., Dallas-Fort Worth, Texas).
7. Television and Cable Factbook 2000 at A-4.
8. In the simplest terms, station coverage is a function of power, antenna height, and frequency. Lower frequency signals travel farther, all other things' being equal. Thus, UHF (ultra high frequency) broadcast television signals provide smaller coverage areas than VHF (very high frequency) broadcast television signals. Greater power and/or greater antenna height also will provide greater coverage.
9. The conversion of broadcast television from analog to digital may alter the equation slightly. As is well known, as analog signals weaken with distance, the picture quality tends to decline. This factor has led to the contretemps over what is an "unserved household" for purposes of determining eligibility to receive satellite delivery of out-of-market network affiliate signals. Digital broadcast signals, however, are subject to a "cliff effect." Digital signals either provide a perfect picture or no viewable picture at all. However, the coverage provided by a digital signal, like that provided by an analog signal, is a function of distance, terrain, interference, and station facilities. Concerns have arisen recently, too, that digital signals broadcast in compliance with the FCC's current digital broadcasting transmission standard may be less robust than anticipated, i.e., they have proven in some instances unable to provide a viewable picture due to propagation characteristics common to television signals. Specifically, so-called multipath signals have overwhelmed the primary digital signal and prevented proper processing of the digital signal into a viewable picture. (N.B. In an analog environment, multipath signals cause "ghosts.") Multipath signals result from echoes of the original signal off buildings, terrain, etc., thereby creating a second (indeed, a multiplicity) of weaker signals. Solutions to these problems currently under investigation include improvements in receiver processing capability and an alternative modulation standard (COFDM), which has not shown susceptibility to multipath problems. See also Haring, supra, at 12 ("While the FCC has sought to address signal coverage problems by increasing power authorizations for some stations, the significance and impact of the multipath problem remains unknown. Similarly, uncertainties remain about ease of digital broadcast reception using a simple indoor/set-top antenna. The standards embodied in the ATSC digital system specifications contemplate use of an outdoor antenna for reception of digital broadcasts. An outdoor antenna is a hassle for consumers; indeed, for many use of an outdoor antenna is forbidden by community planning covenants.").
10. A distinction must be made between "unserved" areas, which may exist on the periphery of larger, as well as smaller, markets, and smaller and rural markets, which would include small urban or community core areas, as well as peripheral "unserved" areas. The concern expressed by the assistant secretary appears to focus on the availability of local television station signals in smaller and rural markets (including core and unserved areas within those markets) and in unserved areas, which, again, may exist in larger as well as smaller markets.
11. Translators receive the station's signal either directly from the station or from another translator. The translator then 'translates" the signal to another frequency (in order to avoid interference between the signals) and broadcasts the station's programming on the new frequency.
12. Indeed, when they tried to be selective in carrying local signals, Congress rebuked them by requiring essentially that they carry all local signals. (The rules do include exceptions in cases of duplicate signals, capacity constraints, and small cable systems.).
13. Many smaller markets enjoyed cable service long before the larger markets because cable offered an expanded array of local (and distant) signals in smaller markets. In larger markets the larger number of broadcast signals and greater variety of broadcast programming left little demand for a cable service consisting primarily of retransmitted broadcast signals.
14. A household desiring satellite service must be able to locate the receive antenna or "dish" where it has an unobstructed view of the satellite. All DBS satellites reside in geostationary orbits over the equator. Therefore, an unobstructed view to the south typically is essential. Furthermore, as one moves to the north, the look angle becomes smaller. Thus, for example, in the environs of Cornersville, Maryland, the look angle to EchoStar's primary Dish Network Satellite is approximately 27 at an azimuth of 240. A 27 look angle is, of course, more horizontal than vertical, and, therefore, is more easily obstructed by ground features than a receive dish with a look angle of, for example, 40.
15. This, of course, assumes that adequate spectrum has been allocated to satellite services for DBS service. It also sidesteps for the moment the issue of economic feasibility. But see Section II, infra.
16. Notice of Proposed Rule Making, ET Docket No. 98-206 (released November 24, 1998).
17. 17 The same might be said of so-called "wireless cable systems," which use point-to-multipoint microwave transmissions to transmit video.
18. As noted above, satellite carriers provide service within markets indiscriminately. All homes in the market lie in the satellite signal footprint and the vast majority enjoys an unobstructed look at the satellite signal. The issue, therefore, in the case of satellite carriers is extension of their local-into-local service into smaller markets. In any market served by a satellite carrier, any local-into-local service provided by the satellite carrier would be available to all households, served, under served, or unserved.
19. Such rules currently apply to cable systems and open video systems. They will go into effect for satellite carriers on January 1, 2002. The rules applicable to satellite carriers differ in several significant respects from the rules applicable to cable systems and open video systems. The cable television "must carry" rules require all cable systems (except those exempt as small systems) to carry all local television station signals in the market they serve on their basic tier, subject to a channel capacity cap of one-third of their activated channels and exceptions for duplicative stations, etc. Satellite carriers (as of January 1, 2002) will be required to carry all local television stations' signals in a market only if they have elected to provide local-into-local television service in that market and actually retransmit at least one local television station signal pursuant to the statutory copyright license. See 145 Cong. Rec. S14711 (November 17, 1999). Furthermore, they may (and do) charge extra for their local-into-local service. For ease of reference, the satellite and cable television rules will be referred to collectively as "local carriage rules."
20. Fifth Report and Order, MM Docket No. 87-268, 12 FCC Rcd 12808 (1997), at ¶27. The Commission at one point recently seemed to discount the significance of free, local broadcasting, in pointing out that:
Broadcasting may not be the only source of local programming as cable operators have developed local news channels and public, educational, and governmental access channels, which provide highly localized content, have multiplied in the past six years.
Notice of Proposed Rule Making, CS Docket No. 98-120, FCC 98-153 (released July 10, 1998at ¶16. Such statements tend to expose the Commission to a charge that it has missed the point -- and a very large point at that. Broadcasting is different from cable is several critical respects. When a local broadcast station provides programming of local interest, addressing local events, issues, interests, and concerns, that programming is universally available to its community and it is free for all.
21. Turner II, 1997 Lexis 2078 at 19-20 (" As noted in Turner, must carry was designed to serve 'three interrelated interests: (1) preserving the benefits of free, over the-air local broadcast television, (2) promoting the widespread dissemination of information from a multiplicity of sources, and (3) promoting fair competition in the market for television programming.' 512 U. S., at 662. We decided then, and now reaffirm, that each of those is an important governmental interest. We have been most explicit in holding that 'protecting noncable households from loss of regular television broadcasting service due to competition from cable systems' is an important federal interest.' Id., at 663 (quoting Capital Cities Cable, Inc. v. Crisp, 467 U. S. 691, 714 (1984)). Forty percent of American households continue to rely on over-the air signals for television programming. Despite the growing importance of cable television and alternative technologies, 'broadcasting is demonstrably a principal source of information and entertainment for a great part of the Nation's population.' Turner, supra, at 663 (quoting United States v. Southwestern Cable Co., 392 U. S. 157, 177 (1968)). We have identified a corresponding "governmental purpose of the highest order" in ensuring public access to 'a multiplicity of information sources, 512 U. S., at 663.)' Id.
22. Hearings before the Subcommittee on Telecommunications, Trade, and Consumer Protection on Delivery of Broadcast Signals by Satellite Providers, February 24, 1999 (Statement of Al DeVaney) at 2-3.
23. 145 Cong. Rec. S14708 (November 17, 1999). As the Court repeatedly and consistently has observed, "[B]roadcasting is demonstrably a principal source of information and entertainment for a great part of the nation's population." Turner II, 1997 U.S. LEXIS 2078, 19, 23, 46. (" Even aside from that, the evidence overlooks that the broadcasters added by must-carry had ratings greater than or equal to the cable programs they replaced. Second Meek Declaration P23 (App. 1863) (ratings of broadcasters added by must-carry "are generally higher than that achieved . . . by their equivalent cable counterparts"); Meek Declaration P21, at 11-12 (Record, DAE, Vol. II.A., Exh. 2); see also Hearings on Cable Television Regulation, at 880 (statement of James Hedlund) ("in virtually every instance, the local [broadcast] stations shifted are more popular . . . than the cable program services that replace them"); JSCR PP 497-510 (App. 1505-1509) (stations dropped before must-carry generally more popular than cable services that replaced them).")
24. Sixth Report and Order, 41 FCC 148 (1952). The Commission essentially reaffirmed this system by allocating digital channels in precisely the same manner that the current analog or NTSC channels were allocated. Sixth Report and Order (DTV), 12 FCC Rcd 14588 (1997).
25. Turner II, 1997 Lexis 2078 at 25-26.
26. In other words, the rule offers no guaranty of success. They simply assure that if a station fails it will do so on the merits of its programming, not on a competitor's decision to deny it access to a goodly portion of its local audience.
27. See Turner II, 1997 Lexis 2078, 50-54.
28. Even where revenue reductions are less than fatal, they still affect a station's ability to provide the best practicable service to the public. See Memorandum Opinion and Order, 8 FCC Rcd 8270, 8294, n.64 (1993), affirmed sub nom. Capital Cities/ABC, Inc., v. FCC, No. 93-3458 et al. (7th. Cir., decided July 12, 1994) [citations omitted]("[W]e believe that ... enhancing the financial well-being of independent stations... inevitably helps to support local programming efforts.... [S]uch efforts further enhance program diversity.")
29. Such cases were not unheard of in the interim between judicial vacation of the cable must carry rules in 1986 and the reimposition of the rules by Congress in 1992.
30. As already had been demonstrated by EchoStar's initial foray into local-into-local service, satellite carriers will carry the signals of the major network affiliates in the largest markets voluntarily. They will not carry local emerging network and independent stations unless and until they are required by law to do so. A station that is not carried is at a marked competitive disadvantage in the local. This disadvantage will grow as satellite penetration increases. Consequently, many emerging network affiliates and independent stations (e.g., many of which have Spanish-language or ethnic program formats) will lose audience share and suffer concomitant revenue declines. This will undermine their ability to broadcast quality programming responsive to the demands of their local audiences. It likewise will pull the props out from under efforts to establish new television networks to compete with the major entrenched networks. Thus, program quality and diversity will suffer -- with particularly adverse effects on the television service available to viewers who continue to rely exclusively on free broadcast television.
31. In resisting application of local carriage rules satellite carriers have argued that whereas cable systems have enormous market power, serving over 60 per cent of television households, satellite carriers serve over 10 per cent of the nation's television households. Therefore, if a local station is excluded from carriage on a DBS service, the impact would be negligible. Injury is injury, whether it is a trickle of blood from a minor scratch to a gushing artery from a slash to the bone. Even where revenue reductions are less than fatal, they still affect a station's ability to provide the best practicable service to the public. At best, a local station which a satellite carrier refuses to carry would be placed at a demonstrable disadvantage vis-a-vis competing broadcast television stations which are carried. Furthermore, is anyone in the DBS business to stagnate? The whole point of this effort to gain use of local signals is to enhance the competitive appeal of DBS service vis-à-vis cable television. Indeed, DBS providers hope to attract not only noncable households in remote areas, but also cable subscribers in core market areas. Indeed, they would hope to supplant cable as the home's multichannel video provider. One easily may anticipate the day when nearly all television households are served by a multichannel video provider, most likely cable or DBS. Together, they will serve the vast majority of television households, and each will have a sufficient market share, such that if either of them failed to carry some local stations, the stations' viability would be threatened. Recent growth figures bear this out. See, e.g., "DBS Has Record Year, Reaching 11.5 Million Households," Communications Daily (March 29, 2000) at 7.
32. Suggestions that availability of national feeds of emerging network signals is an adequate substitute for carriage of the local affiliate are specious. First, from the viewer's perspective, critical elements of local service would be lacking. A national feed or the signal of a distant affiliate of the network offers no local programming, whether public affairs or entertainment programming, news, information, or weather, all selected because it responds and appeals to local needs, tastes and interests. Indeed, on most emerging network stations, the majority of programming is non-network programming. Second, the damage to the local affiliate is compounded. Instead of making any effort to watch the local affiliate, viewers searching for network programming likely will take the path of least resistance and watch the readily available satellite-fed station or national network feed. Third, networks thrive on the strength of their affiliates. Strong affiliates attract larger audiences for the network. A national network feed or a distant affiliate offers the network none of the boost provided by a popular local and locally attuned affiliate station. Nothing could strike more cruelly at the heart of our nation's system of local broadcasting. See 145 Cong. Rec. 14711 (November 17, 1999). Also demonstrably inadequate is the concept of providing local analog signals via an off-air antenna sold and installed in conjunction with a DBS dish. Off-air viewers might enjoy none of the benefits of digital picture quality, none of the benefits of inclusion in the DBS on screen program guide, and none of the benefits of seamless surfing.
33. Purported technological limits on satellite channel capacity result from poor planning rather than inherent limitations on satellite distribution technology. Nothing stopped EchoStar from designing its system to accommodate local signals. Satellite systems may be configured to provide for carriage of all local signals. Capacity becomes an issue, however, when satellite systems have been designed with limited capacity for local signals. EchoStar, currently employing only CONUS and half-CONUS footprints for local-into-local, is a prime example. In contrast, Capital Broadcasting system will be configured to provide local carriage via use of spot beams. Spot beams, of course, provide signals to geographically isolated areas and, thus, permit re-use of frequencies in multiple areas. Such systems permit efficient use of spectrum, which expands capacity to the extent that full carriage of local signals in all served markets can be accomplished. EchoStar's system never was designed to operate with comparable efficiency. Even when EchoStar carries local signals, they are transmitted all over the country. This is an enormous waste of spectrum. A system designed to provide nationwide and regional services necessarily would claim capacity shortfalls in the context of providing local services. In reality, however, this really boils down to a matter of system design rather than inherent technological constraints on satellite system capacity.
34. See "EchoStar Announces Construction Plans for Three New Satellites to Serve Dish Network's Fast Growing Satellite Service," attached hereto as exhibit A. EchoStar's stock price soared at the news, raising its market capitalization to over $25 billion. AOL Investment Snapshot - DISH (US) (February 28, 2000). EchoStar also today announced a two-for-one stock split. "EchoStar to Split Stock 2 for 1 After Ninefold Rise," Bloomberg News (February 28, 2000); "DirecTV Orders First Spot Beam DBS Satellite," Communications Daily (December 9,1999) at 5-6.