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New Smoothing Out SHVERA - 12-October-2009, 01:10

Smoothing Out SHVERA
Lawmakers, Stations Work Through Split-Market Issue
by John Eggerton 10/12/2009 2:00:00 AM

Washington Commercial broadcasters and satellite operators continue to spar over carriage issues, but noncommercial stations and those same providers say they may be near a carriage deal for high-definition and multicast channels.

Those updates emerged from a Senate Communications Subcommittee hearing on reauthorizing the Satellite Home Viewer Extension and Reauthorization Act, the law that grants satellite-TV providers Dish Network and DirecTV the compulsory license to deliver distant network-affiliate TV-station signals into local markets.

Issues raised last week mirrored those from earlier hearings on the bill in both the Senate and House. The measure must pass by year-end or the compulsory license will sunset.

Among the issues discussed: importing TV stations from adjacent markets in Nielsen-designated DMAs that cross state lines; what carriage rights should accrue to multicast offshoots of broadcast stations; and how to encourage or mandate that satellite providers carry local TV stations in all 210 U.S. TV markets.

On the signal-import topic, National Association of Broadcasters TV Board chairman Paul Karpowicz, president of Meredith Broadcasting Group, said at the hearing that bringing distant signals into so-called split markets would divide the ad revenue in that market, to devastating effect.

Distant-signal importation isnt necessary anyway, he added, as local stations are already willing to allow adjacent broadcasters to import their local newscasts and weather reports into affected markets just not the network and syndicated programming they dont hold the rights to.

After Sen. Mark Udall (D-Colo.) raised the issue of split markets in his state, Karpowicz said he had a letter from KOAT-TV in Albuquerque, N.M., that granted Dish and DirecTV the ability to carry its local news and weather and public affairs programming.

But DirecTV senior vice president of program operations Robert Gabrielli and Dish executive vice president and general counsel Stanton Dodge cautioned that the solution isnt that easy.

Dodge said that he was not confident that broadcasters held all the rights to content within their local news, as newscasts sometimes integrate bits and pieces of national reports from outside sources. And Gabrielli added that spot-beam targeting posed a technical issue.

Satellite operators and broadcasters also squared off over multicast channels. Gabrielli said they were not new local channels, did not have must-carry rights, and should not count in terms of determining eligibility for distant signals.

Karpowicz disputed him, saying those channels had local news and sports, and that with broadcasters using their digital multicast channels to fill in coverage gaps with secondary nets in the digital age, it was important that those channels have the same rights as primary stations.

It is doubtful fixing split markets will wind up in the final bill given the time crunch and contentiousness of the issue. Amendments to the Senate Judiciary version were scrapped so it could pass out of committee.

Getting local service into all 210 DMAs is likely to be in the bill, though. A compromise that would have at least Dish delivering to all those markets is in the House bill, and Senate committee chairman John Kerry (D.-Mass.) made clear at the hearing that it was an important issue on his side of the chamber as well.

In past Congresses we have not required satellite services to offer local channels to every market in the country, he said. I do think we need to talk about how to remedy this situation.

While the satellite operators were squaring off with NAB, they were circling the wagons around an agreement with noncommercial broadcasters in hopes of heading off any mandates.

Both sides said they expect to have a deal on carriage of noncommercial stations HD signals soon.

The Federal Communications Commission has set a timetable for phasing in HD carriage over the next four years, but APTS has worked out deals with cable, Verizon and DirecTV and have been pushing Dish to do the same.

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