DBS must-carry stands

Broadcasters and satellite-TV carriers have been competing to alter rules governing carriage of local channels, but last week the federal regulators said no to both sides.

On Jan.1, direct-broadcast satellite must offer carriage to all local stations in a market when any receive carriage. Late last year, the FCC implemented a law requiring satellite must-carry.

The law has already survived at least one court decision: A federal district judge in Alexandria, Va., earlier this year upheld the statute. Appeals of that decision and the FCC's rules are pending in the federal appeals court in Richmond, Va., which hears oral arguments Sept. 25.

In the meantime, DirecTV asked the FCC to toughen its "good-quality signal" standard, which requires local broadcasters to provide similar quality over-the-air transmission as they provide cable operators. The DBS carrier argued that stations should be required to deliver a signal of quality equal to one delivered via fiber optics, which broadcasters complain is a nearly impossible standard for many weak-signal stations. Leasing a fiber-optic line to deliver a signal to a DBS provider could cost $14,000 a year, according to DirecTV.

"Imposing an exacting standard that exceeds the level necessary would inhibit many local stations' ability to qualify for carriage," the FCC said.

Indeed, broadcasters have already accused DBS carriers of denying carriage without undergoing costly tests to prove their signal is adequate. The FCC virtually eliminated that practice by insisting that DBS provide carriage without tests unless there is evidence a signal won't be adequate.

"We're disappointed because this will increase our costs, but we'll abide by the decision," said EchoStar regulatory counsel David Goodfriend.

To prevent DBS carriers from making it more expensive for customers to receive lower-rated local stations, DBS carriers also are prohibited from requiring a second dish for a portion of the local-channel lineup. They are permitted, however, to require a second dish for the entire local package.

Broadcasters lost their bid for more-favorable treatment. The commission dismissed a demand by the Association of Local Television Stations that satellite carriers be allowed to offer a local market's stations only as an entire package and eliminate the station-by-station "à la carte" option currently permitted. "This flexible approach ... promotes consumer choice in programming," the commission said.

The FCC did make some small changes:

• Allowing a station to negotiate a retransmission-consent deal with one DBS carrier and demand must-carry with another.
• Limiting stations' right to switch from retransmission consent to must-carry after the deadline for an election cycle.
• Forbidding DBS carriers to require payment for basic reception equipment.