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Rule irks all players

Satellite TV companies say FCC blackout rules are too tight; sports leagues counter that they are too loose 1/07/2001 07:00:00 PM Eastern

Satellite TV providers are crying foul over new sports blackout rules they say will hurt their coverage of athletic events, one of their biggest subscriber draws. Sports leagues aren't happy either.

Under FCC rules issued in November, satellite carriers will be required to black out networks and superstation sports programming in local markets if a sports team or league's rules bar the local broadcaster from airing the event. Similar rules have long applied to cable systems, but the DBS requirements are a little more lenient because the national footprint of satellite signals makes it harder for them to tailor programming to specific markets.

But leading DBS carriers DirecTV and EchoStar's Dishnetwork say the FCC rules are still too stringent and will force them to bear too heavy a burden while providing only small protection to teams' exclusive-distribution rights.

"The FCC had discretion to account for the national coverage of DBS signals but didn't do enough," said Pantelis Michalopoulos, EchoStar's Washington attorney.

The blackout provisions were part of the rules package issued two months ago to implement the 1999 Satellite Home Viewer Improvement Act. The law paved the way for satellite carriers to offer local network affiliates, but, as a trade-off, they were forced to honor sports blackout rules for broadcast networks and six superstations that offer their programming nationwide via cable and DBS. The satellite carriers also were forced to stop offering network signals from distant markets to households that could receive the local affiliate.

Home teams generally require blackouts in their local markets when games have not been sold out.

The blackout rules are unfair, DBS carriers complain, because the FCC isn't requiring teams to give sufficient notice to adjust for schedule changes.

But most troubling, they say, is a rule that requires DBS providers to apply blackouts to network signals even though very few households in the targeted markets would receive network signals anyway. That's because the rules have a practical effect only when the DBS carrier is importing a network signal from a distant market rather than offering the signal of the local affiliate.

If the carrier is offering a local affiliate, the station already would be required to offer alternative programming, and the DBS carrier would need to take no extra action. Only the few viewers in the market with over-the-air reception poor enough to entitle them to distant signals would need a sports program blacked out. DBS carriers say that provision would force them to create a cumbersome two-tiered screening process, first for homes ineligible for distant signals and then, within that subscriber group, for those within the team's blackout area.

"The commission ignored the complete lack of proportion between the formidable burden imposed on satellite carriers and the marginal 'benefits' conferred upon sports rights holders," EchoStar said in its comments.

DBS carriers say the FCC should have used the discretion Congress provided to exempt network signals. Because superstations aren't covered by the local-into-local rules, DBS carriers are complaining about how the general blackout requirement would be applied to them.

But they do say both network and superstation sports coverage would be hurt by a provision that requires them to honor blackouts of rescheduled athletic events as long as notice is given within 48 hours of the time change, no matter how close the game day. The satellite companies say they need a long lag time to adjust for schedule changes on both networks and superstations: 60 days.

Finally, the DBS carriers are complaining that they have only 120 days to carry out the new rules.

Sports organizations, on the other hand, say the FCC rules are too lenient.

They say, in some cases, home teams may not be able to protect their exclusive rights when parts of the rule's local 35-mile protected zone also fall into the outer portion of a superstation's traditional coverage area. That means Chicago superstation WGN may be able to carry Milwaukee Bucks or Brewers into some blacked-out portions of Wisconsin markets when those teams play home games against the Chicago Bulls or Cubs.

The leagues also say requiring them to notify carriers within 48 hours of any schedule change will force an array of announcements that ultimately will confuse carriers.

"The Commission's apparent effort to 'give' something to the satellite carriers ... would create more problems for the carriers, to say nothing of creating considerable additional unnecessary work for the leagues," wrote Washington attorney Philip Hochberg on behalf of the NBA, NFL, NHL and the NCAA's Division 1-A schools.

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