Testimony of Assistant Secretary Rohde on Providing Loan Guarantees to Providers to Carry Local Broadcast Signals to Residents of Small, Rural Local Broadcast Markets

Thank you Mr. Chairman for inviting me to testify before this Committee on providing loan guarantees to providers to carry local broadcast signals to residents of small, rural local broadcast markets. The Administration believes that the question of how consumers in small and rural markets receive local news and information is very important and deserving of Congressional attention.

I can recall well the night that the Senate passed the Omnibus Appropriations Act and the Senate discussed a proposal to provide loan guarantees for carriers to provide local-into-local broadcast coverage to small and rural markets. I was struck by the fact that when this Administration took office in 1993, there were no operational direct broadcast satellites (DBS) providing service to viewers. In 1993, there never could have been a debate like that which embroiled the Senate last November over the question as to how small and rural markets would get local-into-local service over satellite systems. Today, there are more than 11 million DBS subscribers. DBS companies are providing local-into-local service in 24 markets and are currently negotiating for the rights to deliver local-into-local broadcasting in 20 more. The question remains, however, as to how viewers in the remaining 200 or more television markets obtain access to local-into-local service.

The Administration strongly supported the provisions in the Satellite Home Viewer Improvement Act (SHVIA) that provided authorization to satellite providers to carry local-into-local broadcast programming. The Administration believes that authorizing local-into-local service not only promotes greater access to local television signals for all Americans, but also strengthens DBS providers' ability to provide meaningful competition to cable with comparable program offerings. Unfortunately, markets in which local-into-local broadcasting over satellite systems is not offered will be less likely to enjoy the same competitive benefits. Moreover, in some rural areas, there is no multichannel video programming supplier offering local broadcast signals and many of these communities lay outside of the signal coverage area of their local broadcast stations.

For these reasons, the Administration believes that it is important to find ways to ensure that consumers in rural and small markets have access to local broadcast programming. The Administration is prepared to work closely with the Congress on any proposal to address this issue, including a loan guarantee proposal. We believe that these three principles should guide such legislation. First, the Administration believes that any new program should be technology neutral in recognition of the fact that different technologies may best be suited to deliver local broadcasting services to unserved areas in different parts of the country. Technology neutrality can spur innovation and the application of new technologies to address this problem. Second, the program should be crafted to ensure that it promotes competition in the multichannel video programming market and encourages future private investment in infrastructure. Third, the program should demonstrate fiscal responsibility by conforming to Federal credit program policies, which minimize Federal exposure to loss and ensure the least expensive, most efficient financing of Federally guaranteed loans.

The Administration also believes that the discussion over ensuring local-into-local broadcast programming in the digital era should not be limited to the loan guarantee approach. Thus, NTIA recently announced that it will publish a Federal Register Notice to solicit public comments and suggestions as to how viewers in small and rural markets can receive local broadcast signals. All comments will be posted on NTIA's web site (http://www.ntia.doc.gov). As part of this effort, I intend to host a roundtable discussion in early March with various stakeholders: consumers, industry representatives, policy makers, and technology experts, to explore ways in which small and rural markets can have access to local programming via satellite and other technologies. Our efforts in this area are intended to complement the Congressional action and efforts by the Federal Communications Commission to examine this question as required under SHVIA. Our intent is to help raise visibility on this issue and contribute to the debate.

Extending the reach of local broadcasting and its vital news and information has been a longstanding goal of NTIA. The agency administers the Public Telecommunications Facilities Program (PTFP), which provides grants to establish and extend the reach of local public television and radio stations into unserved areas. Since 1962, the program has been a major factor in the nation's success in bringing local public television stations to rural areas - - through the establishment of full power stations, as well as the construction of television translators and repeaters. PTFP estimates that approximately 94 percent of all Americans can receive at least one free, over-the-air public television signal from a local PBS member-station.

The preservation of local broadcasting in the digital era is vitally important and ensuring that viewers in small and rural markets are included in this new age is critical. The Administration pledges its support to advance the goal of extending the reach of local broadcasting to all Americans and looks forward to working with Congress on the loan guarantee proposal as well as exploring other approaches to this issue. We would appreciate the opportunity to provide comments on any specific legislative proposal.

Thank you for the opportunity to testify and I would be happy to respond to your questions.