Ergen: SHVERA Reforms Could Lead To Universal Local-Into-Local By 2010

Dish Network chief talks to Congress about satellite reforms

"The digital age has arrived," says Dish Network Chairman Charlie Ergen, "and the laws need to catch up." That would include not making satellite operators pay to carry any TV stations or, absent that, Congress coming up with a single retransmission consent rate that applies to all broadcasters and pay TV providers. It also means revamping the satellite carriage regime and what constitutes a local signal.

"Treat a monopoly like a monopoly," says Ergen. "Satellite providers already pay a fixed, per-subscriber copyright royalty rate, and we see no reason why a similar concept can't work for retransmission consent."

In prepared testimony for a House hearing on reauthorizing the Satellite Home Viewer Extension and Reauthorization Act (SHVERA), Ergen listed four fixes he says should be made in the law, which essentially provides the rules of the road for satellite delivery of local TV station signals.

Those fixes, says Ergen, would address the problems of 1) consumers unable to get local news and sports from their home state because of the way markets are configured (almost half cross state lines, according to one satellite lobbyist); 2) rural communities not having all four major nets; 3) retrans fights that deprive local consumers of station signals, and 4) must-carry stations with little or no local content, but which satellite operators are required to carry.

Ergen argues that pay TV providers should be able to import neighboring broadcast stations, with consumers getting to make the call about what local means.

For example, in a market that straddles two states, the ABC affiliate may carry local news, or the games of the college in one state, while viewers in that split market would prefer to get the games of a nearby college that happens to be in an adjacent market.

Ergen says that Dish provides local-into-local service in 178 of Nielsen's 210 markets, or about 97% of TV households. In most of the rest, he says, there are three or fewer network affiliates, which makes it uneconomical to serve because viewers won't want the service it is missing, say, the local NBC affiliate, and DISH is prevented from important a nearby NBC affiliate.

To help remedy that, he says, Congress should step in and allow pay TV providers to import stations from adjacent markets. "If broadcasters won't invest in their local communities," he argues, "pay-TV providers should be able to treat a nearby affiliate as the local affiliate."

At a press conference with reporters before his appearance before the House Communications, Tech & Internet Subcommittee, Ergen said that if Congress institute his suggested broad reforms, that the marketplace would drive either his company, or competitor DirecTV to serve virtually all those 210 markets, and by as early as next year. "I would predict that, based on what we're proposing, it is highly likely that you would get all 210 DMA's with all the DBS players without it being mandated by Congress, and you would probably get it by 2010."

Ergen also argues that 1) retransmission consent reform is needed because broadcasters have too much leverage when they can play a multiplying number of multichannel video providers off one another and that the FCC should set a 20-hours-per week minimum of local programming as a threshold for TV stations to get must-carry status, saying satellite operators are forced to carry "hundreds of stations today that have little or
no local content.."