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S. HRG. 111–506 

REAUTHORIZATION OF THE 

SATELLITE HOME VIEWER EXTENSION 

AND REAUTHORIZATION ACT OF 2004 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMUNICATIONS, 

TECHNOLOGY, AND THE INTERNET 

OF THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

OCTOBER 7, 2009 

Printed for the use of the Committee on Commerce, Science, and Transportation 

( 

(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

JOHN D. ROCKEFELLER IV, West Virginia, Chairman 

DANIEL K. INOUYE, Hawaii 

JOHN F. KERRY, Massachusetts 

BYRON L. DORGAN, North Dakota 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas 

CLAIRE MCCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

TOM UDALL, New Mexico 

MARK WARNER, Virginia 

MARK BEGICH, Alaska 

KAY BAILEY HUTCHISON, Texas, Ranking 

OLYMPIA J. SNOWE, Maine 

JOHN ENSIGN, Nevada 

JIM DEMINT, South Carolina 

JOHN THUNE, South Dakota 

ROGER F. WICKER, Mississippi 

GEORGE S. LEMIEUX, Florida 

JOHNNY ISAKSON, Georgia 

DAVID VITTER, Louisiana 

SAM BROWNBACK, Kansas 

MIKE JOHANNS, Nebraska 

ELLEN L. DONESKI, Staff Director 

JAMES REID, Deputy Staff Director 

BRUCE H. ANDREWS, General Counsel 

ANN BEGEMAN, Acting Republican Staff Director 

BRIAN M. HENDRICKS, Republican Chief Counsel 

SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, AND THE 

INTERNET 

JOHN F. KERRY, Massachusetts, Chairman 

DANIEL K. INOUYE, Hawaii 

BYRON L. DORGAN, North Dakota 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

MARK PRYOR, Arkansas 

CLAIRE MCCASKILL, Missouri 

AMY KLOBUCHAR, Minnesota 

TOM UDALL, New Mexico 

MARK WARNER, Virginia 

MARK BEGICH, Alaska 

JOHN ENSIGN, Nevada, Ranking 

OLYMPIA J. SNOWE, Maine 

JIM DEMINT, South Carolina 

JOHN THUNE, South Dakota 

ROGER F. WICKER, Mississippi 

GEORGE S. LEMIEUX, Florida 

JOHNNY ISAKSON, Georgia 

DAVID VITTER, Louisiana 

SAM BROWNBACK, Kansas 

MIKE JOHANNS, Nebraska 

(III) 

C O N T E N T S 

Page 

Hearing held on October 7, 2009 ............................................................................ 1 

Statement of Senator Kerry .................................................................................... 1 

Statement of Senator Ensign .................................................................................. 30 

Statement of Senator Klobuchar ............................................................................ 32 

Statement of Senator Pryor .................................................................................... 35 

Statement of Senator Udall .................................................................................... 37 

Statement of Senator McCaskill ............................................................................. 39 

Statement of Senator Thune ................................................................................... 42 

Statement of Senator LeMieux ............................................................................... 43 

Statement of Senator Begich .................................................................................. 45 

WITNESSES

Robert M. Gabrielli, Senior Vice President, Program Operations, DIRECTV, 

Inc. ......................................................................................................................... 3

Prepared statement .......................................................................................... 5 

R. Stanton Dodge, Executive Vice President and General Counsel, DISH 

Network L.L.C. ..................................................................................................... 13 

Prepared statement .......................................................................................... 14 

Paul A. Karpowicz, President, Meredith Broadcasting Group on behalf of 

the Television Board of the National Association of Broadcasters .................. 16 

Prepared statement .......................................................................................... 18 

Lonna Thompson, Acting COO, Senior Vice President and General Counsel, 

Association of Public Television Stations ........................................................... 22 

Prepared statement .......................................................................................... 24 

APPENDIX

Hon. John D. Rockefeller IV, U.S. Senator from West Virginia, prepared 

statement .............................................................................................................. 51 

Response to written questions submitted to Robert M. Gabrielli by: 

Hon. John D. Rockefeller IV ............................................................................ 51 

Hon. Maria Cantwell ........................................................................................ 52 

Response to written questions submitted to R. Stanton Dodge by: 

Hon. John D. Rockefeller IV ............................................................................ 53 

Hon. Mark Pryor ............................................................................................... 55 

Hon. Maria Cantwell ........................................................................................ 56 

Hon. Tom Udall ................................................................................................ 59 

Response to written questions submitted to Paul A. Karpowicz by: ...................

Hon. John D. Rockefeller IV ............................................................................ 60 

Hon. Tom Udall ................................................................................................ 61 

Response to written question submitted by Hon. John D. Rockefeller IV 

to Lonna Thompson ............................................................................................. 64 

(1) 

REAUTHORIZATION OF THE 

SATELLITE HOME VIEWER EXTENSION 

AND REAUTHORIZATION ACT OF 2004 

WEDNESDAY, OCTOBER 7, 2009 

U.S. SENATE, 

SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, AND

THE INTERNET, 

COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 10:04 a.m. in room 

SR–253, Russell Senate Office Building, Hon. John F. Kerry, Chairman of the Subcommittee, presiding. 

OPENING STATEMENT OF HON. JOHN F. KERRY, 

U.S. SENATOR FROM MASSACHUSETTS 

The CHAIRMAN. The hearing will come to order. Thank you all. 

I apologize for being a few moments late. 

The Satellite Home Viewer Extension Reauthorization Act has 

one of those fancy Washington acronyms, SHVERA, and it is definitely not the best-known piece of communications legislation. It is 

also probably not the most appreciated or understood. But, in living 

rooms all across our country, there is no question that consumers 

benefit from the basics of this law every single time that they turn 

on a television set. 

And to understand that, or put it in its proper context, you got 

to go back about, you know, 15 years or so. At that time, a consumer seeking a premium pay television service had only one place 

to go; he went to the cable company. Today, that same consumer 

has options, and that’s because SHVERA and its legal predecessors 

ushered in a world where consumers could choose between the 

cable company, satellite providers, like DIRECTV and the DISH 

Network. And as everybody—you know, we hear it all the time 

around here; people talk about, you know, choice being competition 

and the importance of competition, but the fact is, this is living 

proof of that. It also means more programming innovation, it 

means more viewing packages to choose from, and it means greater 

incentives for companies to be able to develop new digital technology for program viewing. 

I might add an important personal note, obviously, in terms of 

competition, pricing, innovation, and viewing, we in Red Sox Nation really appreciate it. 

[Laughter.] 

2 

The CHAIRMAN. To keep these benefits going, in this hearing we 

are now talking about the reauthorization of SHVERA. And our 

focus is fairly simple, it’s pretty straightforward. We want to look 

at what aspects of the law need updating, what needs tweaking, 

adjustment, to ensure that consumers across the country benefit 

fully from the viewing choices that it makes possible. 

I think, in some respects, this task is fairly simple. The law 

needs to be updated to reflect the transition in digital television. 

I suspect all of our witnesses today would agree that the Digital 

Revolution requires some updating. But, in other aspects, the task 

is also—got its complexities. Today, there are more than 20 Nielsen 

markets across the country, where satellite does not provide local 

broadcast channels. Instead of hearing information about local 

news, weather, sports, consumers get information from places that 

are far from home and, frankly, far from directly relevant to the 

lives that they lead. This situation, I believe, does demand our attention. Although in past Congresses, we have not required satellite services to offer local channels to every market in the country, I do think we need to talk about how to remedy this situation. 

I believe, too, that public television plays a very, very special role 

in our media landscape. So, our SHVERA work ought to ensure 

that public broadcasters get fair treatment from our satellite providers when it comes to the carriage of public television programming. The Association of Public Television Stations does not believe 

that that is currently the case, all the time at least. 

And finally, I believe that we are perhaps midcourse, and maybe 

somebody would peg it somewhere else in the transition, but we’re 

somewhere around midcourse in a very dramatic change in consumer viewing habits. There’s a migration underway from television to computer screen to mobile phones and so forth, and consumers are time-shifting and place-shifting their viewing. Similarly, broadcasters are, appropriately, exploring new mediums 

through which to deliver their content. 

This is not the place to tackle all of these changes, but I think 

it’s very important for us as we make the—you know, as we think 

about what adjustments to make in current law, we do have to 

keep in mind the impact of the technology changing and that impact on our viewing behavior. And, clearly, in time our laws will 

need to adjust to, and reflect, these new realities. And I say that 

with some experience, because when we did the 1996 Telecom Act 

here, we spent all our time on telephony, when, within months, the 

entire ballgame was data information transferral. And frankly, the 

bill was almost out of date, you know, at signing. 

So, with that said, we want to look ahead a little bit, and I want 

to thank our witnesses for being here. I look forward to your testimony and appreciate your thoughts about the reauthorization of 

this important program. 

So, without further ado, let me call on each of you. We’re delighted to welcome Robert Gabrielli, the Senior Vice President for 

Programming and Distribution, DIRECTV, from El Segundo, California; Mr. Stanton Dodge, Executive Vice President, Secretary, 

and General Counsel, DISH Network, from Colorado; Mr. Paul 

Karpowicz, the President at Meredith Corporation, from Rocky 

Hill, Connecticut; and Lonna Thompson, who is standing in for 

3 

our—for Bill Acker, who’s not able to be here—and she’s Acting 

COO and General Counsel from the Association of Public Television Stations. 

So, thank you, each of you, for being here. I don’t know if 

there’s—why don’t you go first, Mr. Gabrielli, and we’ll just run 

down the line. Thanks. 

STATEMENT OF ROBERT M. GABRIELLI, 

SENIOR VICE PRESIDENT FOR PROGRAMMING 

AND DISTRIBUTION, DIRECTV, INC. 

Mr. GABRIELLI. OK. Thank you. 

Chairman Kerry, thank you for inviting DIRECTV to discuss the 

reauthorization of SHVERA. 

I sit before you today on behalf of more than 18 million of your 

constituents who subscribe to DIRECTV. Many live in rural areas 

that broadcasters and cable operators do not reach. They are some 

of our best customers. Since the day we opened our doors, we have 

offered rural Americans the same national programming we provide to our subscribers in big cities. These rural customers had virtually no TV options before us; now they can get the best television 

experience in America. 

But, the innovative technology that allows us to deliver all of our 

national programming to rural Americans cannot easily deliver 

thousands of duplicate local broadcasts stations throughout the 

country. We have spent billions of dollars to address this issue. We 

now offer local channels to 95 percent of Americans and are adding 

new markets every year. 

Recognizing these challenges, Congress has always sought to balance the goals of localism and access to network programming. We 

respectfully offer the following three consumer-friendly principles, 

which we believe will help the Committee strike this balance: 

The first principle: Consumers should always be able to get programming from at least the Big Four networks by satellite. Most 

consumers prefer local service, and the law reflects this. But, just 

like cable operators, satellite does not yet deliver local channels to 

every American. Where our subscribers cannot receive local service, 

the law should allow distant signals instead. Broadcasters will tell 

you that those ineligible for distance signals can always get local 

signals over the air; we all know this is not true. In fact, our review of the broadcasters’ own DTV transition website shows that 

as many as 45 percent of those predicted by SHVERA to get local 

signals over the air, actually cannot. 

Why is this? SHVERA’s predictive model assumes many things 

that are almost never true. It assumes consumers have a giant rotating antenna, two stories in the air; it assumes the antenna is 

pointing directly at the specific broadcasting tower in question; and 

it assumes the world contains few trees and buildings. In contrast, 

NAB’s own Website apparently assumes things that are true: actual antennas people really use, for example. Congress should fix 

this. 

Second principle: Congress should not take away consumers’ programming. Congress has changed the requirements for distance 

signals before, and will do so again here, because of the digital 

transition. In the past, it has always grandfathered in subscribers 

4 

so they would not lose their programming. It should do so again 

here. 

Preserving the status quo is especially important with respect to 

multicast programming. Every broadcaster has one primary video 

stream, and in so-called ‘‘short markets’’ lacking national networks, 

some broadcasters have begun to offer one or more missing affiliates as a second, third, or even fourth digital multicast stream. 

But, these multicast streams are not really new local channels. 

Rather, a station will buy the rights to out-of-town network and 

syndicated programming, and, at most, repeat the local news already carried on their primary video stream. We have reviewed the 

listings of network-affiliated multicast streams throughout the 

country and could not find one that offers any new local content. 

Existing law treats multicast streams very differently than primary video streams. Multicast streams have no must-carry rights, 

and they do not count for purposes of determining eligibility for 

distance signals under the Copyright Act. We think this is the right 

policy. 

From DIRECTV’s perspective, multicast streams simply are not 

new local channels and shouldn’t be treated as such. More importantly, we frequently lack room in our crowded spot-beam satellites 

to carry them. 

The specific issues raised in this reauthorization is that the National Association of Broadcasters (NAB) wants subscribers on January 1st, the renewal, to be ineligible for distance signals if they 

are predicted to get multicast signals over the air. If this happens, 

tens of thousands who lawfully receive signals—distance signals 

today, would immediately lose them. And in the future, we’d be 

forced to shut off distance signals whenever a new multicast channel appeared. We respectfully ask the Committee to protect these 

consumers as Congress has always done in the past. 

And the third principle: Satellite customers should not be ineligible to receive broadcast stations offered by cable. Cable operators 

have long been permitted to offer neighboring significantly viewed 

stations. In an attempt to level the playing field with cable, Congress gave satellite carriers similar rights in 2004. In doing so, 

however, Congress required satellite operators, unlike cable operators, to offer local stations the equivalent bandwidth offered to significantly viewed stations. The FCC has interpreted this to mean 

that DIRECTV must carry local stations in the same format as significantly viewed stations every moment of the day. This is infeasible. DIRECTV cannot monitor the format of hundreds of station 

pairs around the clock. Nor can DIRECTV black out signals when, 

for example, a high definition ballgame runs late on one station, 

while the other offers standard definition hourly fare. We ask the 

Senate Commerce Committee to address this issue so that we can 

offer the same stations as our cable competitors. 

I would respectfully ask the Committee to keep these three principles in mind as it crafts SHVERA reauthorization. 

Thank you, and I’ll look forward to your questions. 

[The prepared statement of Mr. Gabrielli follows:] 

5 

1For more details, please see Appendix I. 

PREPARED STATEMENT OF ROBERT M. GABRIELLI, SENIOR VICE PRESIDENT, PROGRAM OPERATIONS, DIRECTV, INC. 

Thank you for inviting DIRECTV to discuss the reauthorization of the Satellite 

Home Viewer Extension and Reauthorization Act (SHVERA). I sit before you today 

on behalf of more than eighteen million of your constituents who subscribe to 

DIRECTV. Many live in rural areas that broadcasters and cable operators do not 

reach. These are some of our best customers, and they have no better friend than 

DIRECTV. Since the day we opened our doors, we have offered rural Americans the 

same national programming we provide our subscribers in big cities. Those who for 

years had no television options at all, can now get the best television experience in 

America. 

But the innovative technology that allows us to deliver all our national programming to rural Americans cannot easily deliver thousands of local broadcast stations—containing largely duplicative programming—throughout the country. We 

have spent billions of dollars to address this issue. We now offer local channels to 

95 percent of Americans and are adding new markets every year. In doing so, we 

try to balance our desire to carry local broadcasters wherever possible with the need 

to protect our subscribers where local carriage is not yet possible. 

Congress seeks to achieve this same balance with each SHVERA reauthorization. 

We respectfully offer the following four consumer-oriented principles to guide the 

Committee in this endeavor. 

First, customers should always be able to get programming from at least the ‘‘big 

four’’ networks by satellite. Consumers prefer local service and the law rightly reflects this. But we cannot yet deliver all of the thousands of local broadcast stations 

in every market. Where our subscribers cannot receive local service, the law should 

let us give them distant signals instead. What the law should not do is require subscribers to rely on expensive rotating rooftop antennas to get intermittent over-theair reception. Broadcasters will tell you that subscribers ineligible for distant signals can always get local signals over the air, but we all know this is not true. In 

fact, the broadcasters’ own website designed to help consumers choose ‘‘the proper 

outdoor antenna to receive [their] local television broadcast channels’’ shows that as 

many as 45 percent of those now ineligible for distant signals cannot really get local 

signals over the air.1

Second, Congress should not take away customers’ programming. Congress from 

time to time has changed the eligibility criteria for distant signals, and will do so 

again here in light of the digital transition. In the past, however, it has always 

‘‘grandfathered’’ then-existing subscribers so that they would not lose their programming. 

Third, satellite customers should not be ineligible to receive broadcast stations offered by cable. The law should no longer allow incumbent cable operators to offer 

more local and significantly viewed channels than their satellite competitors. 

Fourth, prices for broadcast programming should be reasonable. We pay broadcasters and content providers fair compensation for their programming, and hope 

they, in turn, recognize the value of our distribution network. But neither market 

power nor government fiat should give those entities the ability to raise prices excessively, particularly in economic times like these. 

These four principles inform DIRECTV’s perspective on all SHVERA-related 

issues. In the balance of my testimony, I’d like to discuss four important issues before the Committee: changes to the ‘‘significantly viewed’’ rules, questions concerning multicast signals, proposals to mandate carriage in all 210 markets; and a 

‘‘market trigger’’ proposal championed by copyright holders. 

I. Fixing the ‘‘Significantly Viewed’’ Rules Will Rescue Congress’s Good 

Idea From the FCC’s Implementation Mistakes 

First, we ask the Committee to fix the rules governing carriage of neighboring 

‘‘significantly viewed’’ stations. Cable operators have long been permitted to offer 

such stations. (For example, certain New York stations are ‘‘significantly viewed’’ in 

New Haven, Connecticut.) In an explicit attempt to level the playing field with 

cable, Congress gave satellite carriers similar rights in 2004. Congress also, however, included a provision to protect local broadcasters that does not apply to cable. 

The FCC subsequently interpreted this rule so onerously that it effectively undid 

Congress’s efforts. 

Satellite operators (unlike cable operators) must offer local stations the ‘‘equivalent bandwidth’’ offered to significantly viewed stations. The FCC has interpreted 

this to mean that DIRECTV must carry local stations in the same format as signifiVerDate Nov 24 2008 09:40 Jun 24, 2010 Jkt 054499 PO 00000 Frm 00009 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\54499.TXT SCOM1 PsN: JACKIE
6 

2 Carriage of Digital Television Broadcast Signals: Amendment to Part 76 of the Commission’s 

Rules; Implementation of the Satellite Home Viewer Improvement Act of 1999: Local Broadcast 

Signal Carriage Issues and Retransmission Consent Issues, 23 FCC Rcd. 5351, ¶ 11 n.48 (2008) 

(‘‘Satellite HD Carriage Order’’) (using hypothetical local and national programming carriage figures to estimate that a satellite operator would dedicate 91 percent of its capacity to local programming). With DIRECTV’s actual figures, this number is closer to 80 percent. 

cantly viewed stations every moment of the day. This is infeasible. DIRECTV cannot 

monitor the format of hundreds of station pairs around the clock. Nor can DIRECTV 

black out signals when, for example, a high-definition ballgame runs late on one station while the other offers standard definition hourly fare. 

The House Commerce Committee has addressed this issue, and we ask the Senate 

Commerce Committee to do the same. 

II. Preserving the Status Quo With Respect to Multicast Signals Will Ensure 

That All Subscribers Receive Network Service 

Second, we ask the Committee to preserve the status quo with respect to 

‘‘multicast’’ broadcast video streams. Every broadcaster has one ‘‘primary’’ video 

stream. Digital television allows some broadcasters to also offer second, third, or 

fourth multicast streams. In so-called ‘‘short’’ markets lacking one or more of the 

big national networks, some broadcasters have begun to offer the ‘‘missing affiliate(s)’’ as multicast streams. 

But these multicast streams are not really ‘‘new’’ local channels. Rather a station 

will buy the rights to out-of-town network and syndicated programming, and (at 

most) repeat the local news already carried on its primary video stream. We have 

reviewed the programming of network-affiliated multicast streams throughout the 

country, and could not find a single one anywhere that offers any new local content. 

The FCC has twice decided that multicast streams do not have ‘‘must carry’’ 

rights, in part because of the obvious constitutional problems this would raise. 

Moreover, multicast channels do not now ‘‘count’’ for purposes of determining eligibility for distant signals under the Copyright Act. On both questions, existing law 

treats multicast streams differently than primary video streams. 

The law gets both questions exactly right. From DIRECTV’s perspective, one problem with treating multicast streams like primary streams is that they simply aren’t 

new local channels. Another, more important problem is that we frequently lack 

room on our crowded spot beam satellites to carry them. When we have room, we 

typically carry network-affiliated multicast streams. But where we lack room, we 

simply cannot accommodate them. 

The broadcasters want all multicast signals everywhere to ‘‘count’’ for purposes 

of distant signal eligibility, starting on the date of enactment. If this proposal were 

to become law, thousands of our subscribers who have lawfully received distant signals for years would lose them. Moreover, we would have to immediately shut off 

distant signals whenever a new network-affiliated multicast stream appeared. And 

if we lacked room to carry the multicast stream, many subscribers would get no network programming from us—even if they have had it via legal distant signals for 

years. We know this will be unacceptable to our customers. It should be to the Committee as well. 

III. Unfunded Carriage Mandates Would Unfairly Burden Satellite 

Subscribers 

Third, we ask the Committee not to adopt huge unfunded carriage mandates. 

SHVERA ultimately represents a compromise among satellite carriers, copyright 

holders, and broadcasters. DIRECTV is concerned, however, that some might seek 

to alter the very essence of this compromise with a mandate to immediately serve 

every local market. Such a mandate would be technically infeasible, hugely expensive, unfair to satellite subscribers, and unconstitutional. 

DIRECTV today offers local television stations by satellite in 152 of the 210 local 

markets in the United States, serving 95 percent of American households. (Along 

with DISH Network, we offer local service to 98 percent of American households.) 

DIRECTV also offers HD local service in 133 markets, serving more than 91 percent 

of American households. By the FCC’s calculations, over 80 percent of DIRECTV’s 

satellite capacity is now devoted to local service—nearly triple the amount cable operators can be required by law to carry.2 We have devoted several billions of dollars 

to this effort. And we are working every day to serve more markets. 

Some, however, would require satellite carriers to serve all remaining local markets by satellite—perhaps as soon as within a year. Very respectfully, while expanding the reach of broadcast service might be a worthy goal, this the wrong approach. 

Such an approach would upset the delicate balance that has guided Congressional 

policy in this area for decades. In enacting SHVIA’s statutory copyright license for 

7 

3 145 Cong. Rec. H11,769 (1999) (joint explanatory statement), 145 Cong Rec H 11769, at 

*H11792 (LEXIS) (‘‘To that end, it is important that the satellite industry be afforded a statutory scheme for licensing television broadcast programming similar to that of the cable industry. 

At the same time, the practical differences between the two industries must be recognized and 

accounted for.’’) (‘‘Conference Report’’). 4 47 U.S.C. § 338(a)(1). 5See Conference Report at *H11795 (‘‘Rather than requiring carriage of stations in the manner of cable’s mandated duty, this Act allows a satellite carrier to choose whether to incur the 

must-carry obligation in a particular market in exchange for the benefits of the local statutory 

license.’’); SBCA v. FCC, 275 F.3d 337, 354 (4th Cir. 2001) (holding that the carry-one, carryall rule was content-neutral because ‘‘the burdens of the rule do not depend on a satellite carrier’s choice of content, but on its decision to transmit that content by using one set of economic 

arrangements [e.g., the statutory license] rather than another’’). 

local broadcast signal carriage, Congress specifically recognized that the capacity 

limitations faced by satellite operators were greater than those faced by cable operators.3 In light of those limitations, Congress adopted a ‘‘carry-one, carry-all’’ regime 

in which satellite operators can choose whether to enter a market, and only then 

must carry the primary video of qualifying stations in that market.4 This regime 

was carefully crafted to balance the interests of broadcasters and satellite carriers 

alike. Indeed, both Congress and the courts concluded that the carry-one, carry-all 

regime was constitutional largely because it gave satellite carriers the choice of 

whether not to serve a particular market.5 (We have attached as Appendix B to this 

testimony a White Paper by Joshua Rosenkranz, a noted constitutional law expert, 

discussing the grave constitutional difficulties with such a mandate.) 

By imposing heavy burdens on us and our subscribers, an unfunded carriage mandate would unintentionally create real inequality. Broadcasters already make their 

signals available in every market over the air, for free. More people could surely 

receive those signals if offered over satellite. But more people could also receive 

those signals if broadcasters themselves invested in the infrastructure to increase 

their own footprint so everyone in the market could receive a free over the air signal. We suggest that it is inequitable, especially in this economy, to place the financial burden of expanding broadcast coverage on satellite subscribers alone. 

IV. Imposing a ‘‘Market Trigger’’ for Elimination of the Statutory Licenses 

Would Lead to Higher Prices and an Inferior Product 

Fourth, we ask the Committee to examine any ‘‘market trigger’’ proposal in the 

context of the Communications Act’s carriage rules. By combining a ‘‘private market’’ copyright approach with the more regulatory approach found in the Communications Act, this proposal would lead to marketplace confusion and, ultimately, 

higher prices and an inferior product for our subscribers. 

Some of the largest copyright holders contend that the statutory licenses upon 

which millions of satellite and cable subscribers now depend are things of the past. 

They argue that there could be other ways for multichannel video programming distributors to provide broadcast programming to their customers—hypothesizing 

‘‘market mechanisms,’’ ‘‘voluntary licensing arrangements,’’ ‘‘sublicensing’’ and the 

like. Nobody really thinks such alternatives will actually work, particularly for distant signals. But copyright holders now suggest that, if a private copyright licensing 

mechanism could be developed, the statutory licenses should then sunset. 

Whatever the merits of this suggestion under the Copyright Act, it completely ignores the must-carry and retransmission consent rules found in the Communications Act. Disney, for example, has argued that its ABC broadcast programming 

should be sold just like its ESPN cable programming. But the ‘‘market trigger’’ proposal wouldn’t do that at all. The government doesn’t force us to carry ESPN Classic 

but, under the market trigger proposal, it would still force us to carry even the lowest-rated broadcast stations. By the same token, the government doesn’t require us 

to obtain non-copyright ‘‘consent’’ to carry ESPN but, under the market trigger proposal, we would have to separately acquire both copyright and retransmission consent from broadcast stations. 

From where we sit, copyright holders don’t really propose a ‘‘free market’’ for 

broadcast programming. Rather, they propose those parts of the ‘‘free market’’ that 

benefit them as copyright holders, while preserving those aspects of the existing regulatory structure that benefit their broadcast subsidiaries. The natural result would 

be marketplace chaos. The government would force us to negotiate twice, not once, 

for broadcast programming that our subscribers want. And it would force us to carry 

programming that our subscribers don’t want. Our subscribers would pay higher 

prices and receive lower quality programming in exchange. This strikes us as patently unfair. 

8 

Thank you once again for allowing me to testify. I would be happy to take any 

of your questions. 

APPENDIX I 

OVER-THE-AIR CARRIAGE METHODOLOGY

DIRECTV is in the process of moving the local channels in several markets from 

a ‘‘wing’’ satellite located at 72.5° W.L. to one of its more centrally located satellites. 

Subscribers in those markets will no longer require a second satellite dish to receive 

local signals. The spot beams on our central satellite, however, cover slightly different areas than do those on the wing satellite. Accordingly, several thousand subscribers who had been able to receive local channels from the wing satellite will not 

be able to do so from the central satellite. 

Naturally, we are looking for alternative ways to provide network programming 

to those subscribers. To determine what options these customers might have, we 

contracted with TitanTV to evaluate each address. 

TitanTV evaluated each address in two ways. It first evaluated each address for 

SHVERA distant signal eligibility using its standard digital predictive model. It 

next evaluated those same addresses using a different model—that used by the 

antennaweb.org mapping program, which describes itself as being ‘‘provided by the 

Consumer Electronics Association (CEA) and the National Association of Broadcasters (NAB),’’ and designed to ‘‘locate[ ] the proper outdoor antenna to receive 

your local television broadcast channels.’’ 

When we received the results, we noticed that fully 45 percent of the addresses 

predicted to get an off-air signal by the SHVERA model were predicted not to get 

an off-air signal by the antennaweb.com model. Surprised by these results, we then 

took a wider set of addresses and manually entered each of them into both models. 

We obtained similar results. 

In other words, according to NAB itself, nearly half of subscribers who cannot get 

a viewable signal over the air are nonetheless ineligible for distant signals under the 

existing SHVERA methodology. 

APPENDIX II 

CONSTITUTIONAL ANALYSIS

Memorandum 

To DIRECTV and DISH Network 

From E. Joshua Rosenkranz 

Date July 23, 2009 

RE Analysis of the Constitutionality of H.R. 927 

H.R. 927’s Must-carry Obligations Are Unconstitutional 

H.R. 927 would require satellite TV providers, like DIRECTV and DISH, to carry 

every single full power local broadcast station in all 210 Designated Market Areas 

(‘‘DMAs’’). A burden of this magnitude is unwise, unjustified—and unconstitutional. 

Because the Must-Carry Rule Infringes on Satellite TV Providers’ First 

Amendment Freedoms, It Must Satisfy Rigorous Judicial Review 

A statute triggers First Amendment concerns any time it directs a speaker what 

to say and what not to say—or otherwise burdens the speaker’s editorial decisions. 

Likewise, a law triggers First Amendment concerns any time it dictates to a broadcaster what programs to carry, and any time it burdens the broadcaster’s programming choices. 

That is what H.R. 927 would do to satellite TV providers—in the most extreme 

possible way. For starters, H.R. 927 would force satellite TV providers to carry hundreds of local broadcast stations against their will, many of which have virtually no 

local audience. Because satellite TV service has limited channel capacity, that would 

mean that DISH and DIRECTV would have to drop programming that subscribers 

want to watch in order to broadcast channels that no one watches. 

True, not every infringement on First Amendment freedoms or programming discretion is unconstitutional. More specifically, not every must-carry rule necessarily 

violates the First Amendment. The Supreme Court upheld the must-carry obligations that Congress imposed on cable, for example—but only by a razor-thin margin, 

after two trips to the Court, and after concluding that the rule would not prevent 

cable from carrying the programs it wanted to carry. See Turner Broad. System, Inc. 

v. FCC, 512 U.S. 622, 641 (1994) (‘‘Turner I’’); Turner Broad. Sys., Inc. v. FCC, 520 

U.S. 180, 224–25 (‘‘Turner II’’). And the Fourth Circuit has upheld the so-called 

9 

‘‘carry-one, carry-all’’ rule that Congress imposed on satellite TV providers—a voluntary rule that is far less onerous than the crushing must-carry requirement embodied in H.R. 927. See Satellite Broad. & Commc’ns Ass’n v. FCC, 275 F.3d 337 

(4th Cir. 2001) (‘‘SBCA’’). 

The important lesson to draw from those cases is that the courts will strike H.R. 

927’s must-carry obligation unless the government persuades them, based on solid 

evidence, that the justifications outweigh the burdens and that the infringement is 

sufficiently tailored to minimize the burdens on speech. This legal standard is called 

‘‘heightened scrutiny.’’ 

Exactly how intense the heightened scrutiny will be is a matter of debate. There 

is a strong argument that the courts should apply the very highest level of scrutiny, 

called ‘‘strict scrutiny’’—a standard that is almost always fatal to any law that 

raises First Amendment concerns. But at a bare minimum, the courts would have 

to apply ‘‘intermediate scrutiny’’ (as the Supreme Court did in the cable must-carry 

context). See Turner I, 512 U.S. at 641. That would require the government to bear 

two burdens. First, the government will have to justify the infringement on First 

Amendment freedom by demonstrating that the infringement is necessary to advance an ‘‘important’’ governmental interest. United States v. O’Brien, 391 U.S. 367, 

377 (1968). This is no easy feat. The government may not just posit a reason for 

imposing the requirement; ‘‘it must demonstrate that the recited harms are real, not 

merely conjectural, and that the regulation will in fact alleviate these harms in a 

direct and material way.’’ Turner I, 512 U.S. at 664. It must also demonstrate that 

Congress ‘‘has drawn reasonable inferences based on substantial evidence,’’ in concluding that the regulation will in fact alleviate the harms in a direct and material 

way. Id. at 666. Beyond that, the government would have to demonstrate that any 

‘‘incidental restrictions on alleged First Amendment freedoms’’ are ‘‘no greater than 

is essential to the furtherance of that interest.’’ Id. at 662. (emphasis added). 

For purposes of the discussion that follows, we make the conservative assumption 

that the courts will apply the very demanding intermediate scrutiny, rather than 

the almost insurmountable strict scrutiny standard. So, at a minimum, the courts 

will study the specific terms of H.R. 927 and will conduct a full examination of the 

television market—and satellite TV’s role within that market. If anything is clear 

from past precedent, it is that no court would accept the facile conclusion that just 

because a cable must-carry rule survived, and just because a far less onerous carryone, carry-all rule has been upheld, the imposition of a very different must-carry 

obligation—on a very different market player with an entirely different technology— 

would also survive. 

In sum, an assessment of whether H.R. 927 is likely to survive judicial scrutiny 

must start with an understanding of why the Supreme Court upheld cable’s mustcarry rules, and proceed with a point-by-point comparison of the justification, burdens, and tailoring of the cable must-carry rule as compared to H.R. 927. Each point 

is addressed, in turn, below. 

The Justification for the Satellite Must-Carry Requirement Is 

Constitutionally Inadequate 

The Compelling And Well Documented Justification For The Cable Must-Carry Rule 

The cable must-carry rule that the Court upheld in the Turner cases basically required cable providers to set aside a maximum of one-third of their channel capacity 

to carry local commercial television stations, and to carry local public broadcast television stations. Superficially, that requirement sounds similar to the satellite mustcarry rule embodied in H.R. 927. But the justification for imposing such a requirement on satellite TV pales in comparison to the justification that the Court narrowly upheld in Turner II. 

The Court observed that ‘‘Congress’ overriding objective in enacting the [cable] 

must carry rules was . . . to preserve access to free television programming for the 

40 percent of Americans without cable.’’ Id. at 646. The Court found that there was 

a real prospect that broadcast stations—particularly less popular independent stations—would die, in the absence of must-carry rules. The point of the law was to 

ensure that viewers who do not subscribe to cable, would still have a menu of programming options to watch when they put up their rabbit-ear antennas. Specifically, 

the fear was that if cable did not carry local broadcast stations, the local stations 

would lose their audiences, causing their advertising revenues to evaporate. Id. 

This, in turn, would mean broadcast stations would go out of business, and viewers 

who opt not to pay for cable would have fewer channels to watch. Id. 

The Court considered this objective important. But it did not uphold the justification on the first trip to the Supreme Court. It sent the case back to put the government through its paces of actually proving, with concrete evidence, that the fears 

that motivated Congress were real. Turner I, 512 U.S. at 667 (‘‘Without a more subVerDate Nov 24 2008 09:40 Jun 24, 2010 Jkt 054499 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\54499.TXT SCOM1 PsN: JACKIE
10 

stantial elaboration in the District Court of the predictive or historical evidence 

upon which Congress relied, or the introduction of some additional evidence to establish that the dropped or repositioned broadcasters would be at serious risk of financial difficulty, we cannot determine whether the threat to broadcast television 

is real enough to overcome the challenge to the provisions made by these appellants.’’) Three years later, when the case came back to the Court with a much more 

extensive factual record, a bare majority of the Court was satisfied that the evidence 

did support Congress’s conclusion that the structure of the cable industry gives 

cable operators ‘‘an incentive to drop local broadcasters and to favor affiliated programmers.’’ Turner II, 520 U.S. at 198 200. The reason is simple: Cable companies 

compete with local broadcasters for audience and advertising dollars—giving them 

strong incentive to drop local broadcast stations in favor of their own affiliates. This 

incentive gave rise to an enormous problem that was national in scope: a threat to 

the survival of a diverse network of free, over-the-air broadcast stations. Specifically, the Court found the evidence compelling on the following points: 

Cable Had the Market Power To Harm Local Broadcasters: 

• ‘‘Cable operators possess a local monopoly over cable households. Only 1 percent 

of communities are served by more than one cable system.’’ Id. at 197. 

• That meant that if they could eliminate broadcast competition, their monopoly 

would be complete—and they did not need to fear that some other competitor 

would gain market share by picking up local broadcasts. Id. 

• Cable served ‘‘at least 60 percent of American households in 1992.’’ Id. 

Cable Had The Ability To Deprive Local Broadcasters of their Local Audiences: 

• Cable operators exercised ‘‘control over most (if not all) of the television programming that is channeled into the subscriber’s home’’ and ‘‘can thus silence 

the voice of competing speakers with a mere flick of the switch.’’ Id. 

Evidence Demonstrated Cable Was Harming Local Broadcasters: 

• ‘‘A television station’s audience size directly translates into revenue.’’ Id. at 208. 

• Some broadcast stations have ‘‘fallen into bankruptcy, curtailed their business 

operations, and suffered serious reductions in operating revenues’’ after cable 

systems stopped carrying the stations. Id. at 209. 

• Stations without cable carriage ‘‘encountered severe difficulties obtaining financing for operations.’’ Id. 

In sum, the Court, by a very narrow margin, found that there was an important 

justification for the cable must-carry rule: cable’s abuse of its market power posed 

a real threat to the survival of local broadcast stations. 

The Weak And Unprovable Justification For A Satellite Must-Carry Rule 

Nowhere in the text of H.R. 927 is there any statement of congressional purposes 

or explanation of what evils this must-carry provision is aimed at curing. Nor does 

the bill offer any factual findings to justify the infringement on speech. We can surmise that the government will try to justify the satellite must-carry rule on the 

same basis on which it defended the cable version. But the government will not be 

able to carry its burden of proving that satellite TV could kill local broadcasting. 

First, satellite TV providers advertise nationally. They simply do not compete 

with local broadcasters for local advertising dollars. So satellite TV providers do not 

have the incentive cable companies have to drop local broadcast stations. 

Second, for that reason, satellite TV providers already carry local stations in an 

overwhelming majority of markets. The objection here is to the burden of having to 

carry all of them, regardless of whether the cost of doing so is at all justified by 

the demand of viewers. 

Third, satellite TV providers are nowhere near the dominant force that cable was 

when the Court decided Turner II: 

• In contrast to cable operators, which ‘‘possessed a local monopoly over cable 

households,’’ each satellite TV provider—DISH and DIRECTV—competes vehemently against the other, and faces competition from cable and telephone companies now offering TV service. Id. at 197. 

• In contrast to cable, which served ‘‘at least 60 percent of American households 

in 1992,’’ id., in 2007 DISH and DIRECTV combined served only about 26 percent of American households. Motion Picture Association of America, Inc., Entertainment Industry Market Statistics (2007), at pp. 19–20, http://www.mpaa. 

org/USEntertainmentIndustryMarketStats.pdf. 

11 

Fourth, unlike cable companies, satellite TV providers do not exercise ‘‘control 

over most . . . of the television programming that is channeled into the subscriber’s 

home’’ and cannot ‘‘silence the voice of competing speakers with a mere flick of the 

switch.’’ Id. In the few markets where satellite TV providers are unable to provide 

local service, satellite TV subscribers can seamlessly receive both over the air broadcast signals and satellite programming with the consumer set top box used to receive satellite signals and an antenna that integrates into satellite programming 

with the flick of switch. The difference is that the customer has control over the 

switch. Indeed, in enacting the 1999 carry-one,carry-all rules, Congress recognized 

that ‘‘subscribers who receive no broadcast signals at all from their satellite service 

may install antennas or subscribe to cable service in addition to satellite service 

. . .’’ (Appellate Brief for Respondents, the Federal Communications Commission 

and the United States of America in Satellite Broadcasting and Communications 

Ass’n v. FCC, 275 F.3d 337 (4th Cir. 2001), 2001 WL 34386914 (C.A.4) (citing H.R. 

Conf. Rep. No. 106–464, at 102.). 

In short, satellite TV providers have no incentive to block local broadcasters from 

their local audiences, do not do so as a practical matter, and would not threaten 

the survival of local broadcasters, even if they did. So local broadcasters simply do 

not need a satellite must-carry rule to stay alive. Thus, any infringement on satellite TV providers’ First Amendment rights is unjustifiable. 

The Burdens of the Satellite Must-Carry Requirement Are 

Unconstitutionally Heavy 

Perhaps the most important distinction between the cable must-carry rule and 

H.R. 927 is that cable’s carriage obligation for commercial broadcast stations is 

capped at one-third of channel capacity. H.R. 927 imposes an unlimited carriage obligation on satellite TV providers. This greatly alters the relative burdens of the two 

rules. 

The Very Light Burden Of The Cable Must-Carry Rule 

Critical to the Supreme Court’s decision to uphold cable’s must-carry requirement 

was the conclusion that the ‘‘actual effects’’ of the must carry rule were ‘‘modest.’’ 

Turner II, 520 U.S. at 214. ‘‘[S]ignificant evidence indicates that the vast majority 

of cable operators have not been affected in a significant manner by must-carry.’’ Id. 

(emphasis added). 

• Compliance with must-carry obligations did not force cable operators to drop a 

significant amount of programming. ‘‘Cable operators ha[d] been able to satisfy 

their must carry obligations 87 percent of the time using previously unused 

channel capacity.’’ Id. This minor burden, the Court accurately predicted, would 

diminish as cable channel capacity expanded. Id. 

• ‘‘94.5 percent of the 11,628 cable systems nationwide have not had to drop any 

programming in order to fulfill their must carry obligations,’’ and ‘‘the remaining 5.5 percent had to drop an average of only 1.22 services from their programming.’’ Id. 

• Nationwide, cable operators ‘‘carry 99.8 percent of the programming they carried before enactment of must carry.’’ Id. 

• ‘‘Only 1.18 percent of the approximately 500,000 cable channels nationwide is 

devoted to channels added because of must carry’’ obligations. Id. 

The Onerous Burden Of H.R. 927 

In contrast to the ‘‘modest’’ burdens on cable, there is no way the government will 

ever be able to prove satellite carriers will not have ‘‘been affected in a significant 

manner by must-carry’’ obligations. Id. Congress opted to enact the less restrictive 

carry-one, carry all rules in 1999 in recognition of the capacity constraints faced by 

cable. See SBCA, 275 F.3d at 350 (summarizing testimony to Congress regarding 

the capacity limits faced by satellite and explaining that carry-one, carry-all rules 

reflected ‘‘the technological dissimilarities between cable and satellite.’’). Despite innovations in satellite technology, there are only so many channels that can be carried on a satellite spot-beam, and satellite spectrum is limited.. Even where spectrum is available, developing, constructing and launching additional satellites is not 

only expensive, it takes many years of planning and preparation. Satellite HD Carriage Order, FCC 08–86, CS Docket 00–96, ¶ 11 (recognizing that ‘‘satellite construction and launch is a lengthy process, generally taking approximately 4 years.’’). As 

the FCC recognized in 2008, ‘‘satellite carriers face unique capacity, uplink, and 

ground facility construction issues’’ in connection with offering local service. Carriage of Digital Television Broadcast Signals: Amendment to Part 76 of the Commission’s Rules and Implementation of the Satellite Home Viewer Improvement Act of 

12 

1999: Local Broadcast Signal Carriage Issues and Retransmission Consent Issues, 

Second Report and Order, Memorandum Opinion and Order, and Second Further 

Notice of Proposed Rulemaking Order, FCC 08–86, CS Docket 00–96, ¶ 7 (March 27, 

2008) (‘‘Satellite HD Carriage Order’’). As the FCC concluded, Cable just does not 

face the same capacity constraints. Id., ¶ 9. 

Satellite carriers’ must carry obligations are also far broader than the ones the 

Court previously upheld. Unlike the cable rule which capped the must-carry requirement for commercial stations at one-third of a cable company’s channels, H.R. 927 

has no limit on the number of channels satellite TV providers must devote to carrying local broadcast stations. Indeed, satellite providers already devote much more 

than one-third of their channel capacity to local broadcast stations under the existing carry-one, carry-all rules. This is due in part to the national scope of satellite 

providers business. Because cable companies serve a limited geographic area, they 

can easily satisfy their limited obligation to carry the local broadcast stations in 

that area—typically five to ten stations. On that same platform, cable companies 

offer hundreds of national channels and provide data and voice services. Satellite 

providers in contrast operate a single, national system on which they already carry 

over 1,000 local broadcast stations. In other words, satellite providers already devote 

more channel capacity to local broadcast stations than cable does under its mustcarry rules. See Satellite HD Carriage Order, FCC 08–86, CS Docket 00–96, ¶ 11. 

Even without the onerous requirements of H.R. 927, satellite TV providers’ carriage obligations will continue to grow because the current carry-one, carry-all rules 

require satellite providers to carry all high-definition signals of broadcast stations 

electing must carry by 2013 in markets where they provide high definition signals 

(‘‘HD’’). HD requires much more channel capacity, and in some markets, satellite 

carriers’ technology requires them to carry both standard and high-definition channels, thus doubling the carriage requirements for each station. As the FCC explained, ‘‘satellite carriers realize a net loss in the total number of program streams 

they may carry in a given bandwidth as they transition from standard definition 

to high definition signals.’’ Satellite HD Carriage Order, FCC 08–86, CS Docket 00– 

96, ¶ 8. H.R. 927 saddles satellite providers with added burden of carrying every 

local broadcast station in the country at the same time the industry struggles to 

comply with the phased-in HD must-carry rules. 

Simply put, to satisfy H.R. 927’s requirements, satellite carriers would likely have 

to drop programming altogether and forego adding additional non-broadcast programming, such as international and foreign-language programming that is a critical source of news and information for many communities. See Satellite HD Carriage Order, FCC 08–86, CS Docket 00–96, ¶ 8 (adopting four-year phase in for HD 

carriage rules due to ‘‘serious technical difficulties’’ faced by satellite and finding 

that immediate implementation would harm subscribers if satellite carriers were 

forced to drop other programming to free capacity). Moreover, compliance would cost 

satellite providers hundreds of millions of dollars to connect local broadcast stations 

across the country to regional satellite uplink facilities, and to develop, build and 

launch additional satellites to increase channel capacity. 

The Fourth Circuit’s Decision Upholding The More Limited Carry-One, Carry-All 

Obligations Does Not Support H.R. 927 

In SBCA, the Fourth Circuit applied the principles of the Turner cases to satellite 

TV ‘s carry-one, carry-all rule, which was enacted as part of the 1999 Satellite Home 

Viewer Improvement Act (‘‘SHVIA’’). The carry-one, carry-all rule provides that satellite carriers that use their statutory copyright license to retransmit a single broadcast station within a DMA must carry only those qualifying full-power local broadcast stations that are in that DMA. 47 U.S.C. § 338(a)(1). The rule does not apply 

if the satellite carrier does not use the statutory copyright license to secure the right 

to retransmit the broadcast station, but instead negotiates a license directly with 

the station. 

The Fourth Circuit upheld this far more modest rule. We disagree with aspects 

of that ruling, which is not, in any event, binding outside the Fourth Circuit. But 

for present purposes suffice it to say that an opinion upholding the much more limited carry-one, carry-all requirement does not come close to supporting a sweeping 

extension of the principle to every local station in every DMA. In this regard, one 

aspect of the Fourth Circuit’s logic is especially relevant. One critical reason that 

the Fourth Circuit upheld the rule was that the rule did not impose an excessive 

burden on satellite carriers. The court held that the carry-one, carry-all rule ‘‘leaves 

them with the choice of when and where they will become subject to the carry one, 

carry all rule.’’ 275 F.3d at 365. The same cannot be said of H.R. 927, which imposes 

what might be called a ‘‘carry-one, carry-the-universe requirement.’’ Obviously, 

there is a big difference between a rule prohibiting discrimination among local 

13 

broadcasters, and a rule that for all intents and purposes requires a satellite TV 

provider to carry every single local broadcast station in the country. 

Conclusion 

Under controlling Supreme Court precedent, H.R. 927 is unconstitutional. It 

should not become law. But if it does, the courts are sure to strike it. The cable 

must-carry rule’s ‘‘modest’’ burdens came within a hair’s breadth of being struck. 

See Turner II, 520 U.S. at 214. In the intervening years, the Court has grown even 

more protective of First Amendment rights in the business context and less tolerant 

of burdensome regulations. Given these realities, H.R. 927 will be practically dead 

on arrival. 

The CHAIRMAN. Thank you. 

STATEMENT OF R. STANTON DODGE, EXECUTIVE VICE 

PRESIDENT AND GENERAL COUNSEL, DISH NETWORK L.L.C. 

Mr. DODGE. Chairman Kerry, Ranking Member Ensign, and 

Members of the Subcommittee, I appreciate the opportunity to testify. My name is Stanton Dodge and I’m the Executive Vice President and General Counsel of DISH Network, the Nation’s third 

largest pay-TV provider. 

Providing consumers with local, over-the-air broadcast stations 

by satellite in all 210 markets has been a longtime goal of the Senate Commerce Committee. This year’s review of the Satellite Home 

Viewer Act provides an opportunity to reach that goal. 

Today, DISH provides local-into-local service in 181 markets, covering approximately 98 percent of households nationwide. This considerable achievement over the last decade would not have been 

possible without the forward-looking actions of Congress. The job, 

however, is not complete until all consumers have the opportunity 

to view their local channels. 

Today, I will review—I will detail some of the key hurdles to 

serving the remaining 29 markets and discuss what this—step this 

Subcommittee could take to make service in all 210 markets a reality. 

The up-front and recurring costs of providing local-into-local 

service in every market are daunting. In each market where we 

provide local service, DISH must establish a physical presence. Our 

ability to recoup this substantial investment is constrained by the 

small size of the remaining markets. For example, there are fewer 

than 4,000 households in the Glendive, Montana, local market. 

This means there are only a few subscribers to help defray those 

costs. The costs to provide local-into-local service are largely fixed, 

so the economics of launching Houston are easy, while the economics of launching Presque Isle, Maine, and similar smaller markets, 

are not. 

DISH has finite satellite spectrum available to provide a national 

service that competes with cable and telephone companies. Let me 

explain. The decision to provide a local NBC affiliate to a few thousand subscribers precludes DISH from offering 13 million subscribers a new national service, a high-definition channel, or an 

international or Spanish-language offering. This has clear competitive implications. Our investment in cutting-edge spot-beam technology and satellites, each an approximately $350-million investment, offers a more efficient means to provide local channels. Nonetheless, the decision to include a local dedicated spot-beam instead 

of a national beam on our next satellite has real consequences for 

14 

a long-term competitive viability. Launching 29 additional markets 

would require us to find or create capacity for approximately 100 

additional channels on a system that is near full capacity today. 

The last key hurdle is one of consumer expectations. If any customer subscribes to a locals package, they expect to receive at least 

NBC, CBS, ABC, and FOX. However, in 26 of the 29 markets we 

have yet to launch, one or more of those networks is not available 

as the primary video feed. In some instances, only a single national 

network affiliate is present in these markets. Without action by 

Congress, we will be unable to provide a commercially viable offering by filling in these, quote, ‘‘short markets.’’ 

Today, we’re not seeking a subsidy for the launch of these markets or the resources to construct more satellites, but we do want 

to give this Subcommittee an appreciation for the challenges faced 

by any provider seeking to launch all 210 markets. There are concrete steps the Subcommittee can take to improve the economics of 

serving these smaller markets. 

To that end, the bill voted out of the Senate Judiciary Committee 

2 weeks ago is a good first step, but it could have unintended consequences. Other pay-TV providers pay either a retransmission fee 

or a copyright royalty payment. Any requirement to pay double 

compensation to carry the same station as the Judiciary bill requires would create an unintended financial disincentive to provide 

those additional signals. Simply put, layering on additional costs to 

serve these economically challenging markets would undercut the 

goal of serving every market. Indeed, to ensure that incentives are 

properly aligned and that all consumers in the U.S. receive comparable services, DISH would need to be on an equal footing with 

its competitors. 

In addition, the bill, as written, would allow broadcasters to 

withhold retransmission consent, perhaps stopping the launch of 

new markets. 

Finally, I want to comment on the Judiciary Committee’s provision to study phasing out the Compulsory License Regime. We welcome such a study, but believe it needs to be coupled with an FCC 

study, as well. That study should examine the current compensation regime and whether it’s truly market-based and serves consumers. 

In sum, we are hopeful that the reauthorization process this year 

will modernize an outdated statute, as well as provide the incentive 

to achieve a national policy goal, making local TV service available 

to consumers in all 210 markets. We look forward to working with 

members and staff to accomplish both of those goals. 

Thank you for the opportunity to testify, and I look forward to 

answering any of your questions. 

[The prepared statement of Mr. Dodge follows:] 

PREPARED STATEMENT OF R. STANTON DODGE, EXECUTIVE VICE PRESIDENT AND

GENERAL COUNSEL, DISH NETWORK L.L.C. 

Chairman Kerry, Ranking Member Ensign, and Members of the Subcommittee, I 

appreciate the opportunity to testify today. My name is Stanton Dodge, and I am 

the Executive Vice President and General Counsel of DISH Network L.L.C. (‘‘DISH 

Network’’), the Nation’s third largest pay-TV provider. 

Providing consumers with local over-the-air broadcast stations by satellite in all 

210 designated market areas has been a goal of the Senate Commerce Committee 

15 

for some time. This year’s review of the Satellite Home Viewer regime provides an 

opportunity to improve upon the existing regulatory and legal structure to 

incentivize the launch of the remaining unserved markets. 

DISH has launched local-into-local service in 182 markets, including Puerto Rico, 

covering approximately 98 percent of households nationwide in less than a decade’s 

time. This is a considerable achievement that would not have been possible absent 

the regulatory and legal structure Congress created to encourage and foster such 

investment. 

The job, however, is not complete until all consumers have the opportunity to view 

their local channels. Today, we would like to detail some of the key technical and 

financial hurdles to serving the remaining 29 markets to help frame the debate on 

what steps this Subcommittee could take to make service in all 210 markets a reality. 

First, the upfront and recurring costs of providing local-into-local service in every 

market are daunting. In each market in which we provide local service, DISH must 

establish a physical presence. This local receive facility is needed to collect the local 

broadcast signals and send them back to our satellite uplink centers. To do so, we 

need to acquire adequate fiber facilities to bring the content back to our uplink centers as well as establish a secure location to acquire broadcast signals in each of 

these markets. The upfront costs alone to establish this infrastructure would be approximately $35 million for the remaining unlaunched markets. Importantly, substantial annual recurring costs are also necessary to maintain local-into-local service. The recurring cost for the remaining local facilities would be approximately $15 

million annually including the costs of associated terrestrial infrastructure and 

staffing. These figures do not, however, include the expense associated with retransmission consent fees and other programming-related costs. 

Our ability to recoup this substantial investment is constrained by the small size 

of many of the remaining markets. For instance, there are fewer than four thousand 

households in the Glendive, Montana designated market area. This provides very 

few potential households to subscribe to our service to help defray those costs, yet 

the costs to provide a local-into-local service are largely fixed. The economics of 

launching Houston are easy. Presque Isle, Maine and similar smaller markets are 

not. 

The opportunity costs of earmarking capacity for local service are also very real. 

DISH has finite satellite spectrum available to provide a national service that competes with bandwidth-rich cable and telephone companies. At a very basic level, the 

decision to provide a local NBC affiliate to a few thousand subscribers precludes 

DISH from providing a new national service, a high definition channel, or an international or Spanish-language offering to 13 million subscribers. This has clear competitive implications. It is certainly true that our investment in cutting edge spotbeam technology and satellites—each a $350 million investment—has provided a 

more efficient means to provide local channels today. Nonetheless, the decision to 

include a local-dedicated spot beam on our next satellite or a national beam has real 

consequences to our long-term competitive viability. Launching 29 additional markets would require us to find or create capacity for approximately 100 additional 

channels on a system that is effectively at, or near, full capacity today. 

The last key hurdle is one of consumer expectations. If any customer subscribes 

to a locals package, they expect to receive at least NBC, CBS, ABC, and FOX content. Yet, in 26 of the 29 markets we have yet to launch, one or more of those networks is not available as the primary video feed of a local broadcast station. In some 

instances, only a single national network affiliate is present in these markets. Without action by Congress as part of the reauthorization process, we will be unable to 

provide a commercially viable offering by filling in these so-called ‘‘short markets’’ 

with the missing national content pursuant to our local-into-local compulsory license. 

We do not ask today for $100 million to subsidize the launch of these markets 

or the resources to construct more satellites, but we did want to give this Subcommittee an appreciation for the challenges faced by any provider seeking to 

launch all 210 markets. There are, however, concrete steps this Subcommittee can 

take to improve the economics of serving these small markets. 

To that end, the Satellite Television Modernization Act of 2009—which was voted 

out of the Senate Judiciary Committee 2 weeks ago—is a good first step. This bill 

would provide for the first time the legal authority to retransmit quasi-local signals 

to consumers under the local compulsory license. Among those rights would be the 

ability to fill in short markets with adjacent broadcasters, the ability to bring in 

those stations that are deemed significantly viewed in the local market, and lowpower stations that may offer valuable content within the local market. Each of 

these proposed changes increases the likelihood that consumers in the remaining 29 

16 

unlaunched markets would receive service that is more comparable to their urban 

counterparts. 

But restructuring of the compulsory copyright regime as currently proposed could 

create a hurdle that has a significant policy consequence. Other pay TV providers 

pay either a retransmission fee to the local broadcast station or a copyright royalty 

payment for carriage. Any requirement to pay double compensation—that is, both 

a retransmission consent fee and a royalty payment—to carry the same station 

would create an unintended financial disincentive to provide these signals. Layering 

on additional costs to the already precarious business model to serve these economically challenging markets would undercut our mutual goal to serve every market. 

Indeed, to ensure that the incentives are properly aligned and that all consumers 

in the U.S. receive comparable services, DISH would need to be on equal footing 

with its competitors. For example, this would include the ability to import signals 

during emergencies and to serve recreational vehicles and commercial trucks, as 

well as households outside of our local spot beams. 

The Satellite Television Modernization Act of 2009 also includes provisions for a 

study by the U.S. Copyright Office of the proper means to implement a phase-out 

of the copyright compulsory license regime with respect to the Copyright Act. We 

welcome such a study to provide a roadmap toward a market-based solution to replace a heavily regulated system that has too often failed consumers. So much of 

the current rules sit atop a complicated and outdated regulatory structure that 

treats competing pay TV platforms differently and deprives consumers of desired 

content. 

As we move toward that market-based approach, we believe that a companion report from the Federal Communications Commission is warranted to address corresponding issues and challenges raised by provisions within the Communications 

Act. Among the topics that merit expert study are: an economic analysis of the current compensation regime, the appropriateness of subsidizing over-the-air viewers in 

a market-based world, and whether a new framework would provide a more workable path to providing all consumers with in-state news, weather and sports. The 

current system fails households in 45 states on that account. Such a report could 

provide this Subcommittee with an invaluable roadmap as work begins on a true 

market-based carriage mechanism. 

In sum, we are hopeful that the reauthorization process this year will modernize 

an outdated statute as well as provide the incentive to achieve a national policy 

goal: making local TV service available to consumers in all 210 markets. We look 

forward to working with members and staff to accomplish both objectives. 

Thank you for the opportunity to testify today, and I’d be happy to answer any 

questions. 

The CHAIRMAN. We look forward to that. Thank you, Mr. Dodge. 

Mr. Karpowicz? 

STATEMENT OF PAUL A. KARPOWICZ, PRESIDENT, MEREDITH 

BROADCASTING GROUP ON BEHALF OF THE TELEVISION 

BOARD OF THE NATIONAL ASSOCIATION OF BROADCASTERS 

Mr. KARPOWICZ. Thank you. Chairman Kerry, Ranking Member 

Ensign, and Members of the Subcommittee, thank you all very 

much for having me here today. 

My name is Paul Karpowicz, and I’m President of the Meredith 

Broadcast Group, which operates 11 television stations in small, 

medium, and large markets throughout the United States. I’m also 

Chairman of the Television Board of the National Association of 

Broadcasters. 

As you reconsider reauthorization of SHVERA, two longstanding 

congressional policies are paramount: localism and private-party 

contractual agreements. 

Localism has been the bedrock principle of national communication’s policy. Congress fosters broadcast localism by allowing stations to enforce program contracts that provide stations with the 

exclusive right to televise their programming in their markets. If 

a cable or satellite system serving one community is permitted to 

17 

import the same programming from distant out-of-market stations, 

the viewing audience of the local station will be fragmented, advertising rates will plummet, and the ability of local television stations 

to provide costly local news, weather, emergency information, and 

local public affairs programming will clearly be diminished. Local 

viewers will inevitably have less access to local television stations’ 

news, weather, and emergency and public affairs programming. Allowing cable and satellite companies to enter into exclusive program distribution contracts with their program suppliers, but depriving local stations of the same ability, will result in sports 

leagues and national program providers migrating their marquee 

programming to less restricted pay television services. Then, only 

those consumers who can afford to pay for this programming would 

have access to it. 

The benefits of digital television will be undermined if satellite 

carriers are allowed to exploit the digital transition by retaining, 

or grandfathering, distance-signal subscribers they have recently 

signed up, when those subscribers can easily receive the same programming from a local station. Local stations can now provide 

three or four separate channels of free over-the-air television programming, and they’re using this new technology in creative and 

exciting ways. In short markets, those without a full complement 

of existing networks, multicast channels are being used to provide 

the programming of missing networks, for free, that previously was 

only available to those who could afford cable or satellite. We’re 

doing preciously that with a multicast channel of our Flint, Michigan station that is now broadcasting a new network that previously 

was unavailable, and I might add, local news is being provided on 

that station. And contrary to DIRECTV’s testimony, we and other 

stations are providing local news, weather, sports, and local emergency information and local public service programming on these 

multicast channels. 

These new multicast channels are also creating new opportunities for network programming aimed at minorities and other specialized audiences. The survival of these new and emerging networks is as dependent, perhaps more so, on local program exclusivity as existing networks. The Senate Judiciary Committee bill, 

introduced by Chairman Leahy and Ranking Member Sessions, 

wisely protects the program exclusivity of digital multicast signals, 

a result we strongly endorse. 

Some Members of Congress have inquired about market modification legislation. We recognize congressional concern for providing viewers with in-State but out-of-market broadcast programming, a concern that can be addressed without a change in the law. 

Cable and satellite systems can now retransmit locally produced 

programming from in-State distant stations. In fact, our own station in Atlanta has signed an agreement with a cable operator in 

northwest Georgia to allow it to carry nonduplicating locally originated programming to Georgia residents in the Chattanooga, Tennessee DMA. Similarly, in-State carriage arrangements with local 

television stations exists around the country. Now, regrettably, satellite carriers have refused to participate in these carriage arrangements. 

18 

1FCC, Retransmission Consent and Exclusivity Rules; Report to Congress Pursuant to Section 

208 of the Satellite Home Viewer Extension and Reauthorization Act of 2004 (Sept. 8, 2005) at 

¶ 50 (FCC Retransmission Report). 

NAB strongly supports the extension of local-into-local service to 

all 210 markets. Residents of Jonesboro, Arkansas are better 

served in times of emergency by satellite carriage of Jonesboro stations’ weather and emergency information than by nonlocal programming from distant out-of-market stations. Various proposals 

are under consideration to facilitate extension of local-into-local 

service to all markets, including the solution contained in the Senate Judiciary Committee’s bill, which we endorse. 

Thank you for the opportunity to testify. We look forward to 

working cooperatively with you as the reauthorization bill moves 

forward. 

[The prepared statement of Mr. Karpowicz follows:] 

PREPARED STATEMENT OF PAUL A. KARPOWICZ, PRESIDENT, MEREDITH

BROADCASTING GROUP ON BEHALF OF THE TELEVISION BOARD OF THE NATIONAL

ASSOCIATION OF BROADCASTERS

Good morning, Chairman Kerry, Ranking Member Ensign and Members of the 

Subcommittee. My name is Paul Karpowicz. I am President of the Meredith Broadcasting Group, which owns and operates 11 television stations in small, medium, 

and large markets throughout the United States. I am also Chair of the Television 

Board of the National Association of Broadcasters (NAB), on whose behalf I appear 

today. 

I appreciate the opportunity to talk with you today about issues of profound importance to the local television service we provide to our communities. Television 

broadcasters like Meredith urge you to ensure that service to local viewers is not 

undermined in the reauthorization of the Satellite Home Viewer Extension and Reauthorization Act of 2004 (SHVERA). 

I. The Two Overriding Public Policy Objectives 

Two public policy objectives should guide Congress’s actions in reauthorizing 

SHVERA—preserving the important local broadcast service local stations provide, 

i.e., ‘‘localism,’’ and respecting the private-party contractual arrangements entered 

into in a free marketplace for the distribution of television programming. Both the 

Federal Communications Commission (FCC) and Congress have found that these 

national policies serve the public interest. 

Localism is a bedrock principle, rooted in the Communications Act of 1934 (Act), 

that has guided both Congress and the FCC in implementing communications policy 

for decades. Localism has also been an integral part of satellite carriage policies 

since they were adopted in 1988. These policies promoting localism have benefited 

all Americans, whether they watch television over-the-air or subscribe to cable or 

satellite. 

What does localism mean for the public served by local television broadcasters? 

Localism is coverage of matters of ‘‘local’’ importance for local communities, such as 

local news, school closings, high school sports, severe weather and emergency alerts, 

local elections, and public affairs. Localism is also support for local charities, civic 

organizations, and community events. Local broadcasters help create a sense of community. They address the needs of the public, based on a familiarity with and commitment to local communities. 

The second Congressional policy objective is that the government should respect 

contracts freely entered into by private parties for distribution of television programming, especially since Congress and the FCC have found that honoring those 

contracts fosters localism, diversity, competition, and high quality service to the 

public. As the FCC has pointed out: ‘‘[W]e do not deem it in the public interest to 

interfere with contractual arrangements that broadcasters have entered into for the 

very purpose of securing programming content that meets the needs and interests 

of their communities. Such interference would contradict our own requirements of 

broadcast licensees and would hinder our policy goals.’’ 1 The Act and the FCC’s 

rules respect and enforce contracts, freely negotiated among the parties, that encourage the creation and distribution of a diverse mix of broadcast television proVerDate Nov 24 2008 09:40 Jun 24, 2010 Jkt 054499 PO 00000 Frm 00022 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\54499.TXT SCOM1 PsN: JACKIE
19 

2The FCC has found that these contractual arrangements serve the public interest. In 1988, 

it reinstituted rules it had earlier repealed that allow local stations to enforce their syndicated 

program exclusivity arrangements. The FCC concluded that broadcasters’ ‘‘inability to enforce 

exclusive contracts puts them at a competitive disadvantage relative to their rivals who can enforce exclusive contracts; their advertisers’ abilities to reach as wide an audience as possible are 

Continued 

gramming that serve the needs and interests of local viewers throughout the country. 

II. Market Modification Proposals 

The first specific issue I wish to address is our concern about market modification 

proposals that have been a major topic of debate in connection with SHVERA. These 

market modification proposals would allow satellite and cable companies to import 

duplicating content from distant in-state stations into counties located in the same 

state as the distant stations. While broadcasters are sensitive to the concerns of 

Members that underlie these proposals, the proposals would not advance localism 

goals, but would in fact undermine sound public policy and harm consumers. Moreover, Members’ concerns can otherwise be addressed without changing the law and 

without adverse consequences to the viewers of local stations. 

My point can be illustrated by WHNS, a station Meredith operates in Greenville, 

South Carolina. Thirty-four percent of the households in its Designated Market Area 

(DMA) are located in North Carolina and 4 percent in Georgia. WHNS provides locally-attuned service to those North Carolina and Georgia communities, just as it 

does to the South Carolina communities within its coverage area. The nearest North 

Carolina City of license to these North Carolina counties is Charlotte, which is 95 

miles away from Spotsylvania County, NC. Greenville is only 25 miles away. 

These out-of-state communities within WHNS’s market have close weather, topography, economic, and cultural ties with Greenville, South Carolina. Accordingly, 

WHNS airs news stories of specific relevance to these local out-of-state counties. The 

market modification proposals would undermine the economic base for this localized 

service. They would do so: (1) by overriding contractual relationships entered into 

by Greenville market stations with national networks and national syndicators for 

the distribution of their programming, and (2) by interfering with the retransmission consent process. 

Proponents of market modification suggest their proposals are necessary to enable 

viewers to watch local news, weather, and local programming originated by stations 

located in their home states. We respectfully disagree. Cable and satellite carriers 

may import, with the consent of the originating stations, the locally originated instate news, weather, sports, and public affairs programming from distant, in-state 

stations without any change in the law, and quite a number of cable systems do 

so today. Cable systems in Virginia, South Carolina, Georgia, Colorado, Tennessee, 

Wisconsin, and various other states import the local programming of in-state, outof-market stations. 

In fact, Meredith’s CBS affiliate in Atlanta, Georgia recently signed agreements 

with Comcast to begin retransmitting non-duplicating programming to Georgia residents in the Chattanooga, Tennessee DMA. This service, offered for no additional 

charge to Comcast customers, highlights the actuality of these private sector agreements being completed in the marketplace. Satellite carriers may also retransmit 

the local programming of in-state, distant station—but, regrettably, they have refused to do so. 

Market modification proposals would have a very different effect. They would: 

• allow the importation of duplicative, national programming into local markets 

where local stations have bargained for the exclusive right to show that programming in their home markets. That result would harm local service by fractionalizing the viewer and advertiser base that underwrites the localized services provided by broadcasters to their home-market viewers, in-state and outof-state. This would be the antithesis of localism; 

• allow satellite and cable carriers to replace local station signals with the signals 

of distant stations affiliated with the same network, thereby undermining the 

retransmission consent rights of local stations; and 

• override and strike down the contractual provisions between local broadcasters 

and their programming providers (e.g., between local affiliates and their networks, syndicators, and sports leagues)—thereby eroding the ability of content 

providers to negotiate fair compensation for their programs and the ability of 

local broadcasters to provide the highest quality programming to their local 

service areas.2

20 

impaired; and consumers are denied the benefits of full and fair competition: higher quality and 

more diverse programming, delivered to them in the most efficient possible way.’’ Amendment 

of Parts 73 and 76 of the Commission’s Rules Relating to Program Exclusivity in the Cable and 

Broadcast Industries, 3 FCC Rcd 5299 (1988), at ¶ 62. The same considerations apply with equal 

force to the FCC’s network nonduplication rules, which would also be overridden by the market 

modification proposals. 

I am sure you are aware of the most recent struggles, caused by harsh economic 

conditions, of local television stations to maintain their local news. The market 

modification proposals would severely damage the economic ability to provide local 

broadcast news—and local sports, weather, emergency alerts and public affairs programming. 

To deny local television stations the ability to enforce exclusive program contracts 

with their program suppliers—yet allow satellite and cable companies to enforce exclusive program contracts with their program suppliers would create an unfair and 

highly discriminatory regulatory scheme and would drive quality programming from 

free over-the-air television to pay services. 

III. Grandfathering 

The so-called ‘‘grandfathering’’ issues relate to subscribers that, for various reasons, historically were unable to receive the signal of one or more of their local network stations and who have legally been receiving distant signals, but who now can 

receive good reception from the local network station signals over the air. The questions, which are many and complicated, relate to which of those subscribers should 

be allowed to keep their distant signals even though they can receive the very same 

network programming free, from a local station. 

While each SHVA renewal has raised a unique set of grandfathering questions, 

the issues this time around are particularly complicated because of the digital transition. Because there is no current definition of an ‘‘unserved’’ household with respect to digital signals, as a technical matter beginning last year, much of the country has been eligible to receive distant digital signals. While the DBS industry has 

committed not to exploit this unintended situation, Congress should codify the 

promise. 

It would be contrary to the core Congressional policies underlying the satellite act 

and harmful to local television broadcast service to allow satellite carriers to exploit 

the digital transition by expanding, through grandfathering, the scope of their government-granted compulsory copyright license. 

In the spirit of compromise, we will not oppose satellite carriers retaining their 

existing lawful distant signal subscribers who were unable to receive a Grade B 

analog signal from a local network station—even though those subscribers may now 

(post digital transition) receive a perfectly good digital network signal from that 

same local network station. We also would not oppose allowing satellite carriers to 

deliver a distant network signal to subscribers in non-localinto-local markets who 

would qualify under the new digital service standard, but who previously did not 

qualify to receive a distant analog signal under the Grade B analog standard. In 

short, in this respect, the satellite carriers will receive the best of both worlds. 

We do not believe, however, it is fair or reasonable to also allow satellite carriers 

to retain subscribers that have been receiving a network signal from a local network 

stand-alone digital station (i.e., one that never had a companion analog signal) or 

from a digital multicast channel affiliated with a network. If that subset of distant 

signal households can, on the date of enactment, receive that same network from 

a local digital station (regardless of whether the channel is labeled a multicast or 

primary channel), such households should not be permitted to continue to receive 

a duplicating distant network station. That was never the intent of the Act—and 

to permit it now would be to allow the satellite carriers to exploit the digital transition for private gain. 

New digital multicast broadcast networks are now being formed (ethnic, minority, 

and other specialized and general audience networks) for digital multicast channels 

and the existing major networks are affiliating with these multicast channels in 

smaller markets that previously did not have a full complement of network affiliates. For example, the Hearst television stations located in Albuquerque, West Palm 

Beach, Orlando, and Tampa have entered into network affiliation agreements on 

digital multicast channels with a new Hispanic program network. Other TV stations 

have done the same. This new network and its specialized Hispanic programming 

will not survive if Congress allows satellite carriers to retransmit the very same programming into these local markets. The result will be that viewers who otherwise 

would have access to those networks for free from these local stations will have to 

pay to get them. Congress should not be a party to facilitating that result. 

21 

Finally, as I mentioned earlier, every household in America, except those households that can receive a Grade B analog signal from a local low power or translator 

station, can now legally receive a duplicating network signal by satellite from a distant network station. We urge that this legislation prevent that unintended result 

by enforcing the oral promise made by satellite carriers to Congress not to exploit 

this aspect of the digital transition. As noted earlier, Congress should codify that 

promise. 

Cable is not permitted to import duplicating digital multicast network signals. 

The FCC applies its cable network and syndex non-duplication rules to digital 

multicast signals the same as it does to all other digital and analog signals. There 

is no reason why satellite carriers should be given a competitive advantage over 

cable in this respect. 

Moreover, a prohibition against grandfathering would prevent the importation of 

distant duplicating national programming and, in turn, create an economic incentive 

for DIRECTV and DISH to extend their local-into-local satellite service to all 210 

markets. 

IV. Protecting Exclusivity for Programming Carried on Multicast Signals 

The importance of local market program exclusivity to localism and the network 

affiliate relationship cannot be overstated. By that I mean the ability of local stations to secure and enforce the right to be the exclusive provider of a network or 

syndicated program in their local market. Local stations, particularly those in small 

markets, can survive only if they can generate advertising revenue based upon local 

viewership. If satellite carriers can override the copyright interests of local stations 

by offering the same programs on stations imported from other markets, the viability of local stations, and their ability to serve their communities with the highest 

quality programming, is put at risk. 

Local market program exclusivity is no less important to stations’ multicast signals than it is to their primary signals. One of the major advantages of the digital 

conversion is that it provides stations with the ability to provide multiple signals, 

each with separate, and additional, programming. Stations are using this technological advance in many new and exciting ways. In ‘‘short markets’’—those without 

a full complement of existing major networks—stations are using multicast to provide locally the programming of some networks that previously were available only 

from distant signals, or not at all. As stated earlier, many stations are using 

multicast to start new programming services aimed at minority and other specialized audiences. 

The survival of these new and emerging networks is just as dependent, and perhaps more so, on local program exclusivity as existing major networks. That is why 

it is imperative that the satellite rules protecting program exclusivity with respect 

to a station’s primary signal apply with equal force to its multicast signals. 

The Senate Judiciary Committee’s approach to this issue is to provide protection 

to multicast signals immediately. NAB commends Senators Leahy, Sessions, and the 

other members of that Committee for recognizing the importance of providing this 

protection for multicast signals immediately. In this regard, I would note that cable 

has always provided program exclusivity protection to multicast signals. Cable, in 

this respect, should not be competitively disadvantaged by a different standard for 

satellite carriers. 

V. Local-into-Local 

NAB strongly supports the extension of local-into-local service in all 210 markets. 

Localism is a beacon of Congressional communications policy. The satellite legislation of 1999 made it possible for satellite carriers to compete effectively with cable 

operators by providing the compulsory copyright privileges needed to retransmit 

local stations’ signals. Satellite operators took advantage of these new capabilities, 

and the result, as the FCC has repeatedly reported to Congress, was that the satellite operators rapidly became competitive with cable carriers, to the benefit of 

American consumers. Offering local service also enhanced satellite operator profitability. 

But the satellite operators do not provide local-into-local service in all markets. 

They avoid many smaller markets, so that, today, satellite subscribers in, for example, Columbus, Georgia, cannot receive news, weather and sports from their localmarket stations via satellite. 

Currently, DIRECTV does not serve some 50 smaller markets, and EchoStar does 

not serve some 30 smaller markets. The satellite carriers no longer claim, seriously, 

that providing local-into-local service is technically impossible. They say it is expensive. But expense is always involved in providing program service to all of the 

American public. 

22 

3FCC Retransmission Report at ¶ 34 (recommending no revisions to statutory or regulatory 

provisions related to retransmission consent). See also Empiris LLC, Jeffrey A. Eisenach, Ph.D., 

The Economics of Retransmission Consent (March 2009) at Executive Summary (concluding that 

retransmission consent has achieved Congress’ intended purpose in enacting it, and has ‘‘benefited consumers by enriching the quantity, diversity, and quality of available programming, including local broadcast signals’’). 

The House version of SHVERA renewal provides a mechanism whereby DISH’s 

right to again provide distant signals to unserved households would be restored in 

exchange for its commitment to provide local into local service in all 210 markets. 

NAB does not oppose this provision. While the Senate Judiciary bill does not contain 

these provisions, it does have a mechanism to facilitate providing local into local in 

short markets by allowing carriers to import a missing affiliate from an adjacent 

market and treating it as local signals for purposes of the compulsory copyright license. With the advent of digital, the number of ‘‘short markets’’ is rapidly diminishing because local stations, with a primary affiliation with one major network, are 

using their multicast capacity to carry a second major network (typically accompanied by local news and informational programming). Thus, KBAK–TV, the CBS 

affiliate in Bakersfield, California, now carries Fox network programming on a 

multicast channel and presents separately originated local news and other localized 

program services on that channel as well. With the switch to digital last June, this 

trend will continue and the number of short markets should be substantially and 

rapidly reduced. 

VI. Other Issues 

There are other major issues affecting the reauthorization. Specifically, we would 

urge Congress to: 

1. amend the current statute to make clear that ‘‘unserved households’’ are to 

be determined in terms of digital service, not only analog service, and incorporate into the statute a ‘‘noise limited service’’ standard which is the FCC’s 

definition of a good quality digital signal; 

2. adopt the digital signal predictive methodology, recommended to Congress by 

the FCC at the direction of Congress, for determining whether households are 

unserved; 

3. reject proposals to reduce the area of protected program exclusivity from the 

interference-free service area to the lesser of that area or the DMA in which the 

station is located except, perhaps, to facilitate carriage of a missing major affiliate in short markets. To do otherwise would reduce and marginalize the exclusive program service area of local stations; serve no useful public policy objective; and be harmful to viewers who depend upon free local broadcast service; 

and 

4. assure satellite carriers do not import HD and multicast signals into ‘‘significantly viewed’’ areas in a local market from an adjacent market without also 

carrying the HD and multicast signals of the in-market stations. 

Finally, the SHVERA reauthorization process should not be used as a vehicle for 

reopening a range of well-established retransmission consent issues. The various 

market modification proposals advanced in the context of SHVERA would, in fact, 

erode local broadcasters’ retransmission consent rights at the expense of the public’s 

local broadcast service. 

There is no need to change the present retransmission consent process, which 

works as Congress intended.3 Congress should continue to reject the efforts of the 

satellite and cable industries to persuade the government to intervene in free-market retransmission negotiations, which the FCC has expressly found benefit cable/ 

satellite operators, broadcasters and, ‘‘[m]ost importantly, consumers’’ FCC Retransmission Report at ¶ 44. 

Thank you. I look forward to responding to any questions Members of the Subcommittee may have. 

The CHAIRMAN. Thank you very much, Mr. Karpowicz. 

Ms. Thompson? 

STATEMENT OF LONNA THOMPSON, ACTING COO, SENIOR 

VICE PRESIDENT AND GENERAL COUNSEL, ASSOCIATION OF 

PUBLIC TELEVISION STATIONS 

Ms. THOMPSON. Thank you. 

23 

Chairman Kerry, Ranking Member Ensign, and Members of the 

Subcommittee, thank you for inviting us to testify here today. I’m 

Lonna Thompson, Acting COO and General Counsel of the Association of Public Television Stations. We appreciate your allowing me 

to testify in lieu of our witness, who was not able to arrive today 

from the station. 

The reauthorization of SHVERA is of great importance to the 364 

public television stations across this country. There are three principal areas to which we would like to call this Committee’s attention as you consider the reauthorization of SHVERA: first, carriage 

of our local stations’ HD signals; second, carriage of our local 

multicast offerings; and third, our Statewide broadcasters’ inability 

to serve all DBS subscribers in their States. 

Public television proudly highlights the private carriage agreements that we’ve been able to negotiate with almost all major multichannel video programming distributors. Rather than relying 

Congress to work out these carriage agreements, we pioneered our 

own private agreements with cable, Verizon, and DIRECTV that 

address the carriage of our local HD signals and the full array of 

our digital programming, including our unique multicast offerings. 

We’re also working very closely with DISH Network to come to a 

similar agreement on the carriage of our digital content from 

multicast programming to HD because we believe that DISH Network’s nearly 14 million subscribers deserve access to their local 

public television stations. Both sides have worked diligently in recent months, and we commend the work that Mr. Dodge and his 

team have put into these negotiations. 

Ultimately, we believe that a private carriage agreement is in 

the best interest of all the parties, including Congress, and we remain hopeful that an agreement may be signed before this Committee finishes its work on SHVERA. However, we must stress that 

any national carriage agreement must contain an accelerated deployment of our local stations’ HD, accessibility to our local 

multicast programming, and, ultimately, the preservation of localism. 

As for HD carriage, while the FCC has created a time schedule 

for HD rollout in all satellite markets through 2013, we’ve sought 

to reach private agreements with the DBS providers to accelerate 

this rollout. This accelerated schedule was a principal portion of 

our 2007 agreement with DIRECTV and is something that we’re 

actively pursuing with DISH. To date, DISH is only carrying the 

HD signals of local public television stations in Alaska and Hawaii. 

The fact is that, until now, DISH has chosen to leave local public 

television stations in an SD world, that offers demonstrably inferior 

viewing experience. This is not sustainable. We certainly hope that 

such discriminatory treatment of our stations will be rectified by 

an agreement; but, if not, we will have to ask the Committee to do 

so legislatively. 

Turning to multicasting, public television stations were early 

adopters of digital technology and have been at the forefront of developing content and maximizing digital capacity to serve our core 

missions of localism, education, and diversity. Our stations offer 

multicast streams that allow for complete local coverage of the 

State legislatures, educational, health, public service, kids, and 

24 

unique sports programming. Again, this is an issue that’s been addressed by our carriage agreement with DIRECTV, and we hope to 

resolve it through our negotiations with DISH. However, absent an 

agreement, this is an issue that should be given serious consideration by this committee as you look to reauthorize SHVERA. 

Finally, I’d like to address the fact that at least 16 Statewide 

public broadcast networks are not able to fully serve viewers in 

their—all their States. Because the SHVERA carriage regime is 

based on the DMA system, many of these networks cannot be carried by DBS providers in parts of their States, simply because they 

do have a full-power transmitter in each DMA. West Virginia is a 

glaring example. The State network covers the entire State with 

three full-power transmitters in three of the nine DMA’s. However, 

because they don’t have transmitters in all nine DMA’s, nearly 35 

percent of the State’s population is ineligible to receive their Statewide service over satellite. West Virginia’s not alone in this issue. 

We thank the Judiciary Committees in the House and Senate for 

addressing this issue in their SHVERA bills, and we ask that this 

Committee support those provisions as the bill is conferenced. 

Again, thank you for inviting me to participate in today’s hearing. The reauthorization of SHVERA is critical to all public television stations. We look forward to continuing to work with you as 

you examine SHVERA reauthorization and other issues of importance to public broadcasters. 

[The prepared statement of Ms. Thompson follows:] 

PREPARED STATEMENT OF LONNA THOMPSON, ACTING COO, SENIOR VICE PRESIDENT

AND GENERAL COUNSEL, ASSOCIATION OF PUBLIC TELEVISION STATIONS

Chairman Kerry, Ranking Member Ensign, and Members of the Subcommittee 

thank you for inviting me to testify before you today on behalf of the Association 

of Public Television Stations (APTS). The reauthorization of the Satellite Home 

Viewer Extension and Reauthorization Act (SHVERA), which governs the transmission of local public television signals to millions of direct broadcast satellite 

(DBS) viewers, is of great importance to the 364 public television stations across the 

country. It also will bear directly on the future of public broadcasting in the digital 

era. There are three principal areas to which we would like to call this Committee’s 

attention as you consider the reauthorization of SHVERA: (1) carriage of our stations’ local HD signals (2) carriage of public television’s multicast offerings, and (3) 

our statewide broadcasters’ inability to serve all DBS subscribers in our states. Although this latter issue is being addressed by the House and Senate Judiciary Committees, we wanted to keep the Committee informed on this, and we will seek your 

endorsement of the solution in the final conferenced bill. 

Public Television’s Private Carriage Agreements 

As Congress looks to reauthorize SHVERA, public television proudly highlights 

the private carriage agreements that we have been able to negotiate with almost 

all major Multichannel Video Programming Distributors (MVPDs). Rather than rely 

on Congress to work out these carriage agreements, which are admittedly challenging, we pioneered our own private agreements with cable, Verizon and 

DIRECTV that address the carriage of High Definition (HD) signals and the full 

array of our digital programming and services, including our unique multicast offerings. 

In 2005 APTS, PBS, and the National Cable and Telecommunications Association 

(NCTA) reached a landmark agreement which ensured that the Nation’s largest 

cable providers would carry up to four digital streams, including HD and multicast, 

of each public television station entitled to carriage on a given system. This was the 

first carriage agreement of its kind and has ensured that cable consumers have access to the complete line-up of their local public television station’ digital offerings. 

In 2006, APTS and PBS reached a similar national agreement with Verizon for carriage of the full digital offerings, including local HD and multicast, of local public 

25 

television stations on Verizon’s fiber-based telecommunications platform, FiOS. 

Then in 2007, APTS and PBS reached a digital carriage agreement with the American Cable Association (ACA), which represents 900 smaller cable systems that 

serve more than seven million subscribers in all 50 states. This deal was similar 

to the earlier deal with NCTA. 

Also in 2007, APTS, PBS and DIRECTV reached a landmark agreement which allows DIRECTV’s nearly 17 million subscribers to access a broad array of public television’s digital services. We realized that our agreements with cable and Verizon 

were unique to those providers and we worked with DIRECTV on creative solutions 

that recognized their capacity limitations, ultimately ensuring that subscribers have 

access to the myriad of content and services provided by the local stations while accommodating their capacity concerns. The agreement stipulates that in each market 

in which DIRECTV provides high-definition (HD) local channels, they will carry either an HD signal or two standard-definition (SD) streams from each station, at the 

station’s option. In addition, DIRECTV will carry two national SD feeds featuring 

educational programming that is differentiated from the station’s primary streams, 

with local stations’ identification included on the Electronic Programming Guide. In 

the future, DIRECTV will provide public television stations the ability to offer additional localized programming through dedicated on-demand services to its new 

MPEG4 receivers, which are equipped with broadband connections. Finally, in markets where DIRECTV is not yet offering local broadcast signals, DIRECTV will provide stations with marketing materials regarding an offer for an antenna and ATSC 

tuner so many customers can gain seamless access to local signals over-the-air. 

With the tremendous investments that public broadcasting—and by extension the 

American public—has made in digital programming, it was absolutely necessary to 

undertake these carriage agreements to ensure that satellite and cable consumers 

have access to the full array of educational and public service programming that 

their local stations are providing. 

We are also working very closely with Dish Network to come to a similar agreement on the carriage of public television’s digital content from multicast programming to HD, because we believe that Dish Network’s nearly 14 million subscribers 

deserve access to their local public television stations. Both sides have worked diligently in recent months to try to come to an agreement and we commend the work 

that Mr. Dodge and his team have put into these recent negotiations. Ultimately 

we believe that a private carriage agreement is in the best interest of all parties, 

including Congress. 

We remain hopeful that an agreement with Dish Network will be signed before 

this Committee finishes its work on SHVERA. We must stress, however, that such 

a national carriage agreement must respect localism. Public television stations are 

some of the last locally owned and locally controlled media outlets in this country. 

We cannot accept any deal with Dish Network that undermines our local ability to 

serve our viewers. Local broadcasters’ rights to serve their local communities with 

programming and content designed to address local needs go directly to the core of 

SHVERA itself, and to the work of this committee over the years. We remain committed to a deal with Dish Network that serves our communities with the full complement of local programming and services in which the American public has invested, and as such, we cannot and will not accept anything that undermines our 

fundamentally local initiatives. 

Between Dish and DIRECTV, more than 32 million consumers depend on satellite 

providers to receive their television signals. We recognize that there are challenging 

technical and economic factors involved in trying to reach an agreement, but the 

core principles of localism and access through our HD and multicast services must 

be addressed. These are issues we have been able to address with every other major 

MVPD, including DIRECTV. We cannot afford to overlook the importance of ensuring that consumers have nondiscriminatory access to HD programming, regardless 

of the platform or service provider. If we are unable to come to a private agreement 

with Dish Network, it will be incumbent upon this committee and Congress to address these critical carriage shortfalls. 

DBS Carriage of HD Signals 

While the FCC has created a time schedule for HD roll-out in all satellite markets 

through 2013, public television has sought to reach private agreements with the 

DBS providers that accelerate the roll-out and greatly enhance the educational offerings available to consumers nationwide. This accelerated schedule was a principal 

portion of our 2007 agreement with DIRECTV and is something we are actively pursuing with Dish Network. There are currently 150 markets where Dish Network is 

offering HD local service. However, to date, Dish is only carrying the HD signals 

of local public television stations in Alaska and Hawaii where they are legally obliVerDate Nov 24 2008 09:40 Jun 24, 2010 Jkt 054499 PO 00000 Frm 00029 Fmt 6633 Sfmt 6621 S:\WPSHR\GPO\DOCS\54499.TXT SCOM1 PsN: JACKIE
26 

gated to do so. We remain hopeful that this issue can be resolved through a private 

negotiation so that all consumers will have access to highest-quality programming 

being created at local public television stations. However, if such private negotiations should fail, it is imperative that this committee address the inadequacies of 

HD carriage of public television stations as part of the reauthorization of SHVERA. 

DBS Carriage of Multicast Services 

Public television stations nationwide were early adopters of digital technology and 

have been at the forefront of developing content and maximizing the new digital capacity to serve our core missions of localism, education and diversity. Local public 

television stations are utilizing their multicasting capabilities to provide dedicated 

channels for public affairs programming and programming designed to reach underserved audiences. In a time of declining news coverage, the importance of these 

services cannot be underestimated. 

For example, West Virginia Public Broadcasting (WV PBS) utilizes all three 

multicast channels to provide a full complement of local educational and public service programming. On their main SD channel and HD channel, they provide the only 

daily coverage of the State legislative session, available in West Virginia, including 

the live broadcast of the State of the State address. Moreover, WV PBS produces 

and broadcasts weekly programs providing viewers with medical advice, legal advice, and daily science and mathematics help for local students. The historical documentaries produced by WV PBS and local independent producers are legendary and 

award-winning. Their second SD channel is focused on educational programming 

and secondary sports. Ultimately they have plans to differentiate their HD and 

main SD channel. Once that happens, contingent on funding and public support, 

they are considering dedicating one of the SD channels purely to education and the 

other to public service and sports programming. 

WV PBS is not alone in their innovative embrace of multicast programming. 

WFSU in Tallahassee partners with the Florida State Legislature to offer the Florida Channel, a public affairs network that is carried by several public television stations in the state. The Florida Channel features live, gavel-to-gavel coverage of the 

state Senate and House of Representatives, as well as other local electoral and public affairs coverage. 

In Arkansas, the Arkansas Educational Television Network (AETN) is broadcasting four multicast channels. In addition to its primary channel, AETN’s Scholar 

Channel, done in partnership with the Arkansas Department of Education, provides 

24-hour programming that assists in teacher professional development and enhances the classroom experience. AETN splits another of its multicasting channels 

between children’s programming and programming focused on creative lifestyles. 

AETN utilizes its last multicast channel to provide a reading service for the blind 

in partnership with the Arkansas Department of Health and Human Services. 

However, SHVERA does not address DBS carriage of local broadcast stations’ 

multicast offerings. Without carriage on all multichannel video platforms, this content is lost to millions of taxpayers who have invested their hard-earned dollars in 

public broadcasting. The Federal Government, which helped fund the conversion of 

public stations to digital, also has a strong interest in making this content available 

to the American public. Again, this is an issue that has been addressed by our carriage agreement with DIRECTV. Recognizing satellite providers’ legitimate capacity 

concerns, the deal utilizes creative solutions to ensure that all DIRECTV subscribers 

have access to local station’s multicast content. Multicast carriage is also a central 

issue being discussed in our negotiations with Dish Network and one that we believe all sides should be able to agree upon. Any agreement with Dish Network 

would also recognize its capacity limitations, but would ensure its consumers have 

access to their local stations’ multicast programming. Again, we strongly prefer a 

privately negotiated solution to this issue. However, absent an agreement, this is 

an issue that should be given serious consideration by this committee as you look 

to reauthorize SHVERA. 

Statewide Networks’ Ability to Reach DBS Subscribers Throughout State 

A central issue I would like to address is the fact that at least 16 statewide public 

broadcast networks throughout the country are not able to fully serve all viewers 

in their states. As you know, SHVERA establishes a copyright license that enables 

DBS providers to retransmit, within a Designated Market Area (DMA), the local 

stations located in that DMA. In several states, state governments or community 

foundations operate statewide or regional networks made up of several public television stations. These state or regional public television networks are charged by 

their state legislatures to provide statewide services including news and information, public affairs, K–12 services to schools, higher education, workforce services 

27 

and emergency response information. Statewide public television networks typically 

receive funding from their states to provide these unique programming services in 

return for its pledge to serve all citizens of the state. Public television’s statewide 

networks take this mandate very seriously. However, because the SHVERA carriage 

regime is based on the DMA system, many of these networks cannot be carried by 

DBS providers in certain portions of their states because they do not have a fullpower transmitter in each DMA reaching into the state. This is not acceptable. 

For example, West Virginia is divided among 9 DMAs including Charleston-Huntington, Beckley-Bluefield-Oak Hill, and Clarksburg-Weston where WV PBS has 

three primary full-power transmitters. In addition, West Virginia DMAs include 

Wheel ing-Steubanville and Parkersburg DMAs, both of which contain WV PBS 

translators. Six more translators are distributed throughout the state to include 2 

counties assigned to the Pittsburgh DMA, 7 counties assigned to the Washington, 

DMA, one county in the Harrisonburg DMA, and finally one county in the RoanokeLynchburg DMA. 

As a matter of note, West Virginia also includes a major portion of the National 

Radio Quiet Zone (NRQZ). The NRQZ is 13,000 square miles and affects, more or 

less, 19 counties in the state. This limits their ability to broadcast into some of the 

most rural counties in the state and underscores the importance of satellite carriage. Because over the air broadcasts are limited in these areas, satellite carriage 

is the only way many of these rural communities can receive WV PBS programming. 

Because DBS providers lack a statutory copyright license to retransmit West Virginia Public Television in the other 6 DMAs, nearly 35 percent of West Virginia 

residents live in places that are not eligible to receive their station. The rest of the 

state receives either out-of-state public television stations or—in several of the 

DMAs—no local public television signals at all. 

West Virginia is not alone in this issue. This problem affects state or regional 

public television networks in at least 15 states, from Louisiana to Nebraska and 

from Arkansas to Oregon, and implicates counties encompassing more than a million households. In Wyoming, the issue is so bad that over 75 percent of the population resides in DMAs that are ineligible to receive Wyoming Public Television. In 

many situations, these are rural areas with difficult terrain where DBS is the best 

option for viewers to receive their local television stations. Additionally, because of 

the challenges of digital conversion, many small cable systems have since closed 

down, leaving towns in these areas without cable service. This further highlights the 

necessity of ensuring that homes in these areas can receive the signal of their local 

statewide public broadcaster through satellite service. 

Again, we recognize that the changes needed in the Copyright Act to address this 

issue are the jurisdiction of the Judiciary Committees and we are pleased that this 

non-controversial issue has been addressed in both the House and Senate Judiciary 

Committee bills. However, we raise this issue today because we are hopeful that 

this Committee will support the Judiciary Committees work to solve this issue for 

our statewide networks when all four committees come together to conference the 

final bill. 

Thank you for inviting me to participate in today’s hearing. The reauthorization 

of SHVERA is critical to all public television stations. We look forward to continuing 

to work with you as you examine SHVERA reauthorization, and other issues of importance to public broadcasters in the exciting new and challenging media world unfolding before us. 

The CHAIRMAN. Well, thank you very much, Ms. Thompson. Let 

me, sort of, go right to the, sort of, first challenge here, Mr. Dodge. 

Ms. Thompson described a situation that is unsustainable, and I’d 

like you to address the question with respect to the DISH carriage 

issue. 

Mr. DODGE. Sure. And I’d, you know, first like to say, I think 

there’s a bit of a misconception about our dedication to, and appreciation of, the value of public broadcasting. Certainly, as a company, we recognize that, and personally, growing up in Boston, 

watching WGBH as a child and a young adult, I appreciate it. And, 

in fact, today we are the largest distributor of PBS programming 

in the United States, by virtue of the fact that we’re in 182 local 

markets today, and we hope that, through the—at the end of this 

28 

process, we’ll have an incentive that will take us to 210 markets. 

We’ll make PBS available to every subscriber in the United States. 

So, with respect to the specific issue of HD programming, we are 

in good-faith negotiations with the folks at APTS to accelerate the 

FCC schedule, and I’ve personally been involved in that, and working on it for the last 2 months nearly everyday, and I am optimistic 

we will reach a private commercial agreement. 

The CHAIRMAN. What’s the hang-up? 

Mr. DODGE. At this point, there are several outstanding issues 

still. 

The CHAIRMAN. Do you want to speak to them, Ms. Thompson? 

I mean, is there—do you sense the same optimism, that you’ll get 

to the completion happily? 

Ms. THOMPSON. We are also optimistic, Mr. Chairman. We do 

have a number of key issues that we’re still discussing, around the 

local HD accelerated schedule, in particular, but we are—— 

The CHAIRMAN. So, you feel there’s a way through the private negotiating process to be able to arrive—to resolve this question of 

coverage. Is that correct? 

Ms. THOMPSON. That’s our sincere hope and desire. 

The CHAIRMAN. So, you do not see this as something the Committee, per se, in the reauthorization, needs to specify or dictate, 

or something? 

Ms. THOMPSON. Not at this time. We’re hopeful we can resolve 

it by private negotiations. 

The CHAIRMAN. So are we, obviously. We’d rather have you do it 

that way. 

I think it was you, Mr. Gabrielli, you mentioned the issue—you 

were talking about the predictability with respect to the distantsignal piece. 

Mr. GABRIELLI. Yes, the SHVERA says that we’re the—supposed 

to use a model that is fairly old and does not include some, I’d say, 

recent enhancements in technology that could be taken advantage 

of. Part of it is—again, is trees. And if you’re from an Oregon country, you know, trees are a big issue. And we get that with our customers, that, you know, ‘‘We can’t see a services ’cause of trees.’’ 

So, it’s just interesting that the SHVERA model, which is what we 

have to use to figure if you’re eligible, has a big discrepancy with 

the model that the NAB uses when you would sign up to say, 

‘‘What antenna should I use?’’ And you go to that model, and it 

says, ‘‘There is no antenna to suit you.’’ We just need to close that 

gap between the two, so that—— 

The CHAIRMAN. How do you do that? How do—do we do that? 

Mr. GABRIELLI. I think the FCC should look at the models they 

use, and ask the NAB what models they use, and just bring those 

two together. 

The CHAIRMAN. Yes, Mr. Karpowicz? 

Mr. KARPOWICZ. Thank you, Mr. Chairman. 

I would like to say, I think we’re comparing apples and oranges 

here. The model that was created by the FCC was the model that 

is being used for SHVERA. What is on the CES and NAB website 

is simply to help people pick out which antenna to use. In certain 

situations, you’re going to need a larger antenna than other situations. But, it’s never to say, ‘‘You can’t get the signal, there is no 

29 

antenna, you are without hope.’’ It is simply to say, ‘‘You may need 

a larger antenna in this situation, versus other situations, where 

you may be able to accomplish the same goal with a smaller antenna.’’ So, we’re—I think we’re talking about—— 

The CHAIRMAN. And your complaint—— 

Mr. KARPOWICZ.—two very different standards. 

The CHAIRMAN.—and your complaint is that it’s really a problem 

of simply not being able to get the signal, either way? I’m not—— 

Mr. KARPOWICZ. No, no, no, I’m actually very comfortable with 

the work that—— 

The CHAIRMAN. With the antenna choice? 

Mr. KARPOWICZ. Yes, and the work that the FCC did in creating 

the SHVERA model. 

The CHAIRMAN. I see. All right. 

Mr. KARPOWICZ. So, we’re comfortable with that. 

The CHAIRMAN. Yes, Mr. Gabrielli? 

Mr. GABRIELLI. I guess we’d have a difference of opinion, because 

we actually took our customers who, when we ran through the 

SHVERA models, said, ‘‘You get a grade-B signal.’’ We took the 

same address, went to the antenna website, and it didn’t come up 

with an answer; there was no antenna that it said, ‘‘Here’s what 

you should go down and buy.’’ So, we just need to close that gap, 

and we’re happy to share the—our analysis with—— 

The CHAIRMAN. Well, we’ll work with—yes, we should try to close 

that gap, obviously. Let me come to, sort of, the larger question, 

which is: DIRECTV offers local to—you know, local-into-local service in about 152 of the 210 DMA’s? 

Mr. GABRIELLI. That’s about right, yes. 

The CHAIRMAN. And DISH, I gather, about 181? 

Mr. DODGE. Yes, sir. 

The CHAIRMAN. So, the question that a lot of people are asking 

themselves is, Are you dedicated to the goal of getting the 210? 

Mr. GABRIELLI. I guess I’ll take that first, is—you know, 

DIRECTV wants to provide local channels in as many markets as 

possible, and the ‘‘as possible’’ is a strong word. 

The CHAIRMAN. Is there a long-term plan to do so? 

Mr. GABRIELLI. There’s a plan to continue to add markets every 

year. You know, we’ve spent billions of dollars, we’re in 95 percent 

now. We have proposed to the Congress a couple of proposals to 

eliminate some of the barriers. An example would be—— 

The CHAIRMAN. Are the barriers what are preventing you from 

doing it now, or is it an investment decision? Is it cost? I mean, 

what’s the—— 

Mr. GABRIELLI. One of the barriers is the cost. It—as he—Mr. 

Dodge says, it’s very expensive. It’s 2-and-a-half-million dollars to 

go to a new market and to rent out—— 

The CHAIRMAN. How much does it cost to, say, move into a—you 

know, a local-local service in a new territory? Pick a territory. 

Mr. GABRIELLI. Glendive, Montana. It cost about $2 million, because you have to establish a local facility, you have to put the infrastructure in there. And what we’re finding in a lot of the more 

rural markets is, there’s no way of getting the signals back to a facility, so we actually have to put the fiber in the ground to get the 

stuff back. 

30 

The CHAIRMAN. And is it just a simple business equation, bottom-line spreadsheet, that says, ‘‘You don’t have enough people 

there,’’ in terms of the advertising revenue for that market—— 

Mr. GABRIELLI. Well, they—— 

The CHAIRMAN.—to be able to support it, or what? 

Mr. GABRIELLI.—they certainly—this certainly would not be not 

be—it’d be a loss, I mean, in this model. And part of what we— 

our proposals was a cost-sharing, because on top of us spending 

this cost to bring the local channels, the local station also wants 

to be paid, on top of that, for their programming rights. And so, 

one of our proposals is a cost—sharing of this cost. 

The CHAIRMAN. And you’re telling us there’s no way for existing 

infrastructure to be able to be used in order to broaden the scope 

of coverage to the 210. You have to use—are you saying to us that 

you necessarily require significant new infrastructure investment 

to make that happen? There’s no new—there’s no current technology that could simplify it, facilitate it? 

Mr. GABRIELLI. I guess—the current technology is, you actually 

need to go to a market and somehow gather all the television signals in a market, either by over-the-air or by fiber, locally. Then 

we have to transport those back to one of our uplink facilities. So, 

you have to go to market, find a place, rent it, put up antennas on 

the roof, or bring in fiber. And then, I said is—you have to now 

fiber that all the way back to an uplink. That infrastructure, you 

have to build on a market-by-market basis. 

The CHAIRMAN. Senator Ensign? 

STATEMENT OF HON. JOHN ENSIGN, 

U.S. SENATOR FROM NEVADA 

Senator ENSIGN. Thank you, Mr. Chairman. 

If I may, before I ask a few questions, just make a few comments. 

The CHAIRMAN. Yes, sure. 

Senator ENSIGN. When Congress first passed the Satellite Home 

Viewer Act back in 1988, I think few people could have imagined 

what the satellite industry would look like today. Far more people 

today subscribe to satellite television than watch television exclusively via over-the-air antennas. In addition to the rapid growth of 

the satellite industry, the last two decades have seen tremendous 

innovation in the video marketplace. 

And never before have consumers been able to get access to television content in so many different ways. Consumers can watch TV 

broadcasts over the air for free; they can purchase pay-television 

service from cable companies, satellite companies, and even phone 

companies; they can rent or buy entire seasons of TV programs on 

DVD; and they can stream or download TV content over the Internet, either to their computer or to the television in their living 

room. 

The 1988 Act was intended to foster exactly this sort of competition and innovation. Indeed, it was never meant to be a permanent 

immutable regulatory framework, however. Believing that the satellite carriers would eventually be able to negotiate in the open 

market for copyright licenses, Congress intended for a limited interim compulsory license created by the 1988 bill to be temporary. 

31 

This temporary license has been extended three times, bringing 

us here to 2009, to consider extending it for a fourth time. I urge 

my colleagues to really think about whether we need to continue 

extending this license and whether our many other satellite and 

cable regulations fit today’s marketplace. 

A 2008 Copyright Office report states that, ‘‘The cable and satellite industries are no longer nascent entities in need of government subsidies through a statutory licensing system,’’ and recommends eliminating the compulsory licenses. The satellite and 

cable industries are more than capable today of negotiating agreements with television networks and broadcasters, and the Copyright Office agrees. 

We need to take a holistic look at both our copyright and retransmission rules, to see if we can move them toward a free market 

system, where consumer interests, rather than the government regulations, drive competition. 

I know that some of this discussion, particularly the compulsory 

copyright license, falls outside the jurisdiction of this Committee. 

I also recognize that we simply do not have the time this year to 

fully debate this issue in earnest. Even so, the time must come to 

revisit our pay-television regulatory framework, and I hope that my 

colleagues will work with me, over the next few years, to address 

this issues in a serious way. 

On the issue of local-in-local service, I think everyone here 

agrees that consumers benefit when they can receive their local 

network stations from their satellite company. DISH Network and 

DIRECTV have done a good job of expanding their local-in-local offerings over the years, but many communities still cannot watch 

their local stations on these satellite systems. 

As the Committee debates how best to bring local content to 

every market in the country, I urge my colleagues to find a solution 

that does not rely on prescriptive government mandates. I am concerned that a government requirement for satellite companies to 

provide local-into-local service to all 210 markets could be unnecessarily burdensome for the satellite providers, would be subject to 

years of litigation, and might lead to a number of unintended consequences. Indeed, we should consider proposals that incentivize 

the satellite companies to reach all 210 markets without government requirement. 

Such a proposal has been advanced by the House Judiciary Committee in their reauthorization bill. I think their idea has many 

merits, and most industry stakeholders seem to be comfortable 

with their approach. Whatever direction this Committee takes, I 

hope it will be one that puts consumers first, while also avoiding 

unnecessary and onerous government mandates. 

Mr. Chairman, just a couple of quick questions. 

Mr. Karpowicz, DIRECTV has testified that NAB’s own Website 

shows that as many as 45 percent of those now considered 

unserved by SHVERA, and thus ineligible for distant signals, cannot, in fact, receive local signals over the air. If this is true, it 

would appear that many households that should be able to receive 

distant signals from satellite operators are blocked from receiving 

such service. Why does the NAB antenna website differ so greatly 

32 

from the digital perspective model that you want Congress to rely 

on? 

Mr. KARPOWICZ. As I indicated, I think we’re actually comparing 

two very different systems, here. The purpose of the NAB CES 

website was simply to help people select the type of antenna that 

they need in their particular circumstance. Now, some people, 

based on their location and their proximity to the tower and the 

location to the station, may not require a very sophisticated antenna. There may be other people on the fringes of the coverage 

area that may require a more substantial antenna and one with a 

greater height off of the ground. That’s very different—that comparison and that website and what they’re trying to do there—is 

very different from the model that’s been developed by the FCC in 

their SHVERA calculations. 

Senator ENSIGN. Mr. Gabrielli, in your testimony you say that, 

‘‘The law should no longer allow incumbent cable operators to offer 

more local and significantly viewed channels than their satellite 

competitors.’’ Please elaborate on this. And specifically, what rules 

need to be changed in order to achieve parity in this situation? 

Mr. GABRIELLI. There are two rules that were incumbent on the 

satellite subscribers that now are on cable. The first one is this 

equivalent bandwidth, where if we bring in a significantly viewed 

station in from an outside market, we have to give it the same 

bandwidth—or we have to give the local station exactly the same 

bandwidth as we give the significantly viewed. The problem was, 

they did it—that on, literally, a second-by-second basis, and there’s 

no way for us, if the local station goes from an HD signal to an 

SD, to be able to shut off the outside station. You know, it—so, it 

was matter of the way the wording was done. It’s—the capacity required for both had to be literally equivalent at every moment in 

time. 

The second issue is that, even though we have the rights from— 

to bring the significantly viewed in, we have to negotiate with the 

outside station, and we have to renegotiate with the inside station. 

So, it really kind of complicates the retransmission, where the inside station can say, ‘‘Well, yes, where you bring in the outside station, there’s a different deal going on here.’’ 

So, we’re just asking the parit with the cable, which—neither of 

those two requirements are on them. 

Senator ENSIGN. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Ensign. 

Senator Klobuchar? 

STATEMENT OF HON. AMY KLOBUCHAR, 

U.S. SENATOR FROM MINNESOTA 

Senator KLOBUCHAR. Thank you very much, Mr. Chairman. I’m 

sorry, I’ve been losing my voice over the last two nights of Minnesota sports. If you—— 

The CHAIRMAN. Now, don’t—— 

Senator KLOBUCHAR. I don’t know if you noticed—— 

[Laughter.] 

Senator KLOBUCHAR. Maybe. 

The CHAIRMAN. We don’t have any Michigan Senators. 

[Laughter.] 

33 

Senator KLOBUCHAR. Or Wisconsin ones. 

Actually, speaking—— 

The CHAIRMAN. Or Wisconsin, right. 

Senator KLOBUCHAR. I’m a member of both this Committee, as 

well as Judiciary, so these are the two committees that are considering SHVERA. And, as you know, we did pass a bill out of our 

Committee. I was glad we did that. But, in the context of the debate we had in the Judiciary Committee, we actually had one 

amendment that we discussed, and that amendment was an 

amendment by the Wisconsin Senators to provide service to Wisconsin counties located in the Minneapolis DMA to retransmit the 

local programming of a Wisconsin station. And, despite the obvious 

Packers/Vikings pull on this issue, and my sympathy to these Wisconsin viewers, I ultimately voiced my concern that we would harm 

local broadcasters by splitting the Minneapolis DMA’s viewer and 

advertising base. And we have 14 Minnesota counties that are considered orphan counties, as well. 

So, I truly have sympathy for this, but I was concerned that we 

would go down a slippery slope, where we would try to make similar modification in other DMA’s, with the end result being confusion for our broadcasters, our advertisers, and our viewers. 

So, in the end, our Judiciary Committee marked up a clean bill 

that had the agreement of all parties. I acknowledge, we didn’t tinker with the media markets, and we didn’t create winners and losers. I hope that we will be doing the same thing here in the Commerce Committee so we can get this very important legislation reauthorized. 

My question, first, is just a more general one. As we look at the 

fact that we are reauthorizing SHVERA, what changes have taken 

place since 2004—technological changes that you think should 

make a difference in how we consider this bill? 

Maybe you want to start, Mr. Gabrielli. 

Mr. GABRIELLI. Well, I think the first one’s been talked to about 

today, is—there’s—you know, the old SHVERA used the analog 

world and the models of an analog. And the SHVERA needs to take 

into consideration there is very little analog TV; there are some, 

still, low power and stations like that, that still do it, but most of 

the full powers are now fully digital. So, whether it’s in the way 

the waivers are granted for just the networks or the way the actual—the SHVERA looks at distant signals—I mean, the local 

channels for the grade B—they both just need to be tweaked, if the 

word—— 

Senator KLOBUCHAR. And, you know, it’s my understanding that 

the definition of the ‘‘unserved viewers’’ is based on whether or not 

a viewer can receive analog signal. Is that correct? 

Mr. GABRIELLI. That is correct. So, technically, as it’s well 

known, is—everyone today is virtually in a white area, because 

these customers no longer receive a analog grade-B signal. 

DIRECTV’s obviously chosen not to use that. We consider the digital signal the same type, and—— 

Senator KLOBUCHAR. Right. So, do you think we need to update 

that definition of ‘‘unserved customer’’? 

34 

Mr. GABRIELLI. It does need to be updated. I think this just—at 

this—one of those things that everybody just kind of knows should 

happen, but it definitely needs to be in the law. 

Senator KLOBUCHAR. Yes. 

Mr. Dodge? 

Mr. DODGE. So, I would reiterate everything that Mr. Gabrielli 

says. I think the most important thing is that you end up with a 

signal quality test at the end of the day that really works for consumers and predicts whether or not they get an acceptable overthe-air signal in the digital world. 

Senator KLOBUCHAR. Mr. Karpowicz? 

Mr. KARPOWICZ. I think the single biggest thing has been the 

digital transition, which clearly has been transformational across 

the country. And it has helped stations deal with this short-market 

issue, where stations are now being able to fill in those blanks with 

secondary networks. 

And again, contrary to the research that Mr. Gabrielli’s people 

did, I can tell you that those multicast stations are doing local 

news, they are doing local sports. So, I think it’s very important 

that the Committee considers that these multicast stations have to 

have the same rights as the primary stations. 

So, I think that’s been the primary big change that has happened, has been the digital transition and what that has enabled 

stations to provide to markets. 

Senator KLOBUCHAR. So, do you think we need to update the definition of the ‘‘unserved customer,’’ then, when it’s based on analog? 

Mr. KARPOWICZ. Absolutely. 

Senator KLOBUCHAR. Could you talk about—I mentioned the 

issue of dividing up the broadcast area—some of the struggles that 

local broadcasters are having now in this difficult economy, and 

how this would be affected if we made major changes to this bill? 

Mr. KARPOWICZ. The concept of market modification, where we 

would redefine what the DMA is, would be very, very difficult for 

us. As you know, the broadcast industry has had a very difficult 

year. I don’t want to go as far as to say that we’ve experienced the 

same troubles as the newspapers, but it is not dissimilar. Our primary revenue source is advertising-based, and when advertising 

fell off dramatically, we were really in a tough situation. 

I think you described it perfectly, that if we started to fragment 

these local markets and brought in other stations, it would clearly 

diminish our ability to continue to provide the service that we provide. We staff, you know, large newsrooms, we employ a lot of people, and if, in fact, there was a service that was duplicative, came 

right in over the top of us, it would really diminish our ability to 

continue to serve our market the way we have in the past. 

Senator KLOBUCHAR. OK. 

And then, last, Ms. Thompson, you mentioned in your remarks, 

or at least the prior written testimony, that it’s better for public 

broadcasting to negotiate carriage agreements with satellite and 

cable companies privately, in that a private carriage agreement is 

in the best interest of all parties. In short, it seems like you’re saying that Congress should stay out of this. And I would agree with 

that. Can you tell us more about why you think it’s in the best interest of all parties to negotiate a private carriage agreement? 

35 

Ms. THOMPSON. Yes, thank you. 

We have found in the past, although it’s time consuming and a 

lot of resources, when we—we, APTS, the public television representative—has gotten to know the industry, we’ve taken into account the capacity constraints and other issues, technological 

issues, we’ve gotten to know each other, we’ve been able to work 

through—after years of negotiation, been able to work through 

agreements. As I said in my earlier testimony, we were able to do 

this with cable, with Verizon FiOS, and with DIRECTV; we’re very 

hopeful that we will continue our negotiations and—with DISH 

Network—and it will end in the same way. We don’t seek legislative assistance unless it’s absolutely necessary, unless we absolutely feel that our industry efforts and our private negotiations 

have reached a standstill. 

Senator KLOBUCHAR. Thank you very much. 

Thank you, to all of you. 

The CHAIRMAN. Thank you, Senator Klobuchar. And I want you 

to know that everybody in Massachusetts is pulling for the Twins 

for the next week or so. 

[Laughter.] 

Senator KLOBUCHAR. I just—I could have guessed that. I don’t 

know why. 

The CHAIRMAN. There you go. 

Senator Pryor? 

STATEMENT OF HON. MARK PRYOR, 

U.S. SENATOR FROM ARKANSAS 

Senator PRYOR. Thank you, Mr. Chairman. 

Let me, if I may, ask the—our two satellite providers here, and 

that is something Ms. Thompson mentioned briefly there a minute 

ago, about capacity. I’m curious about your capacity now as compared to, say, 5 or 10 years down the road. Is that a problem for 

you all, in terms of your capacity and providing the programming? 

I’ll start with you, Mr. Dodge. 

Mr. DODGE. It is, in fact. And it’s—the interesting things about 

satellites is, it takes about 3 to 4 years to build one, and every satellite we order, the day that it’s delivered, we build it totally differently because the technology advances rather quickly. But, at 

the end of the day, it makes it impossible for it to have additional—requirements put on our capacity today, we need to plan 

very—several years in advance. And so, even though today there 

have been great technological advances, our system is effectively 

full. And just to meet the FCC milestones, for example, for HD 

must-carry, we’re building two—or actually, three additional new 

satellites today that will be required to make that a reality. 

Senator PRYOR. Are you in a similar situation? 

Mr. GABRIELLI. Very similar. 

The most constraining value, I guess, or thing, on satellites is 

frequencies. You know, we have to use the frequencies that were 

allocated, or get, as licensed from the FCC, so to throw on additional burdens when we have no more frequencies to use means it’s 

a zero-sum game; something has to come off. 

So, that’s one of the things that frequently doesn’t get discussed, 

is that, you know, there is a limited amount of frequencies that we 

36 

have licenses for. You know, we don’t—there are no additional ones 

coming up to be used; they’re all spoken for. So, we have to judiciously use that capacity; and part of it is to build satellites that 

are smarter to do spot beams and all that. But, that frequency is 

an overriding constraint. 

Senator PRYOR. So, how many channels do you offer right now? 

Mr. GABRIELLI. Locally, we carry over 2,500 local channels, and 

between all of the satellites, including the international and HD 

and SD, there are about 500. 

Senator PRYOR. OK. 

Mr. GABRIELLI. So, 500 national and 2,500 local. 

Senator PRYOR. And how much of that would be Pay-Per-Viewtype channels? 

Mr. GABRIELLI. There’s about 30 SD Pay-Per-View channels, and 

there are about 30 HD Pay-Per-View channels, but we also use 

those for sports; they’re kind of like dual purpose. So, like on Sundays there are very few HD Pay-Per-View, because we carry a little 

football. 

Senator PRYOR. OK. I understand. 

Ms. Thompson, let me ask you a question. I know that the West 

Virginia person couldn’t be here today, but you mentioned in your 

opening statement about, sort of, a West Virginia problem. And I’m 

assuming, if I understood you correctly, what you mean is that 

there are people in West Virginia that, on satellite, don’t get West 

Virginia public television. Is that what—— 

Ms. THOMPSON. Yes. 

Senator PRYOR.—you mean? And how common is that around the 

country, where you have a—sort of a State-oriented public TV system, but, on satellite, not everyone in the State has access to that 

system? How common is that? 

Ms. THOMPSON. It’s actually, unfortunately, fairly common, Mr. 

Pryor. We have 16 State networks that range in percentages of 

their in-State citizens that cannot receive the State network that 

their communities have invested in, that their States have invested 

in, and their local businesses. They range in amounts from the 

highest, Wyoming, where 75 percent of the in-State citizens that 

are satellite viewers cannot see Wyoming public television programming. Arkansas has over 17 percent. Alabama, 7 percent. It 

goes down to Wisconsin, over a 100,000 viewers, down to—the lowest percent is still 1 and a half percent in Idaho, 22,000 viewers 

that are satellite viewers that cannot see their local State networks. 

Senator PRYOR. And if you could do this, what would your fix be 

on that? How do you fix that? 

Ms. THOMPSON. We have put in place permissive language; it’s 

not mandatory, but it’s permissive. It’s a—would be accomplished 

through a copyright fix, and so, is in the bills in front of the Judiciary Committees. But, the fix would allow the satellite providers to 

show the in-State public television station in DMA’s where the 

State network does not have a transmitter, but which is unserved 

by public television. 

So, it’s permissive. We’re hopeful the satellite carriers would take 

advantage of it. We believe the citizens, their consumers and viewers, really want to see their State networks. And we’re hopeful that 

37 

this can be accomplished and that this Committee would support 

that when the bill is conferenced. 

Senator PRYOR. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator Pryor. 

Senator Begich? 

Senator BEGICH. Mr. Chairman, I’m actually going to pass for 

now. 

The CHAIRMAN. Senator Udall? 

STATEMENT OF HON. TOM UDALL, 

U.S. SENATOR FROM NEW MEXICO 

Senator UDALL. Thank you, Mr. Chairman. 

Most of the State of New Mexico is in a single TV market centered in Albuquerque; however, about 13.5 percent of the State’s 

TV households receive out-of-State television. Unfortunately, this 

means that some New Mexicans are cutoff from important State 

news and information that directly affects them. In fact, the second 

largest city in New Mexico receives its television from another 

State. This problem is compounded by the fact that major newspapers from New Mexico no longer deliver to these areas that don’t 

have New Mexico TV channels. 

And I’ve received numerous complaints from residents calling for 

changes to SHVERA to allow satellite TV customers to receive 

these in-State TV channels. A satellite TV customer told me he 

pays for dozens of channels, but he cannot get a single New Mexico 

channel to keep up with events. A mayor of one of the cities in 

these communities told me, ‘‘Our citizens are very disturbed by the 

unavailability of New Mexican television in our area. As New Mexican residents, our communities should have access to New Mexico 

State news and events.’’ 

Several county commissioners wrote me that, ‘‘New Mexico is our 

State, and we’re entitled to information as it pertains to our citizens’ safety and well-being.’’ 

Our State legislature has weighed in on numerous occasions with 

a resolution urging Congress to require satellite television providers to provide New Mexico television to all parts of the State. 

So, Mr. Karpowicz, I’d like to ask you, from the broadcasters’ perspective, and then also the satellite TV representatives here, your 

testimony extols the virtues of localism in broadcasting; however, 

the current TV market uses Nielsen company designated market 

areas to impose on TV viewers what their local area should be. 

Why should my constituents be prevented from receiving the New 

Mexico television they wish to watch? 

Mr. KARPOWICZ. I don’t think they should. I think they should be 

able to get their local news from a New Mexico station. In fact, I 

have before me a letter from KOAT, where they are granting consent, without charge, to all the cable systems and DIRECTV and 

DISH Networks to retransmit the station’s locally originated news, 

weather, and public affairs programming to each of the carrier subscribers located within the State of Mexico. This is not dissimilar 

from what we have done in moving our newscast from Atlanta up 

into the northwest corner of Georgia, which is actually in the Chattanooga DMA. 

38 

So, the TV stations and the broadcasters in Albuquerque are prepared and willing to give the right to move their newscasts, the 

content they control, to the satellite operators and the cable systems. That would necessarily include network programming, which 

we don’t have the rights to, or sports programming, which we don’t 

have the right to, but certainly New Mexico news would be available to your constituents throughout the State under that scenario. 

Senator UDALL. Well, the problem here is that one of my constituents asked a broadcasting company, just like you talked about, 

and said they wanted to get the New Mexico media, and they were 

told, ‘‘Your town, while in New Mexico, is not part of the Albuquerque/Santa Fe market. Because of that, DISH Network and 

DIRECTV cannot offer our signals where you live. Cable may be 

able to, but it’s optional for them.’’ 

So, why will broadcasters not voluntarily agree to allow satellite 

TV companies to provide a New Mexico channel to State residents 

who want to watch it? 

Mr. KARPOWICZ. I think the distinction—I think that—— 

Senator UDALL. I mean, I think there’s a real problem here. 

Mr. KARPOWICZ. Well, I think the distinction is, we can only 

grant consent for the programming that we control, which is local 

news. And if it is local news that is the issue, we control the rights 

to local news that we produce. I think moving another—moving the 

station in its entirety, which would include network programming 

and sports franchises and so forth, we can’t control that. But, local 

news, we can make that happen. And, as I say, the station in Albuquerque has effectively, today, said they’re granting the rights to 

these guys. If they would like to take the local news programming 

from Albuquerque and move it across the State, they’re happy to 

do that. 

Senator UDALL. And so, all somebody has to do in one of these 

areas is make a request and it will happen is what you’re telling 

me. 

Mr. KARPOWICZ. Well, first these guys have to agree to do it. 

Senator UDALL. Who has to agree? 

Mr. KARPOWICZ. The satellite—— 

Senator UDALL. Yes. 

Mr. KARPOWICZ.—carriers. 

Senator UDALL. Well, that’s the next question I’m asking—— 

Mr. KARPOWICZ. OK. 

Senator UDALL.—them. But, the broadcasters have apparently— 

broadcasters have apparently opposed this effort—— 

Mr. KARPOWICZ. I—— 

Senator UDALL.—at the local level. 

Mr. KARPOWICZ. I think it’s—I think the distinction is, the broadcasters have opposed moving another—a station in its entirety—— 

Senator UDALL. Right, right. I understand that. I understand—— 

Mr. KARPOWICZ. OK. 

Senator UDALL.—that. Could I—— 

Mr. Chairman, I don’t know if I’ve run over, here, so are we 

going to have a second round? 

The CHAIRMAN. It’s OK, take a moment. 

Senator UDALL. Just—— 

The CHAIRMAN. Yes, we’ll have a second round. 

39 

Let me let the other Senators get their—— 

Senator UDALL. Yes. I want to make sure—you bet. 

The CHAIRMAN. Senator McCaskill? 

And then Senator Thune—— 

STATEMENT OF HON. CLAIRE MCCASKILL, 

U.S. SENATOR FROM MISSOURI 

Senator MCCASKILL. I’ll ask it—— 

The CHAIRMAN.—and then Senator LeMieux. 

Senator MCCASKILL. I’ll ask it for Senator Udall. 

Here’s the bottom line. The bottom line is, we have orphan counties. We’ve got orphan communities in Missouri. And they’re big 

cities—I mean, they’re not big cities by Kansas City/St. Louis 

standards, but Hannibal, Kirksville, St. Joe—just like his situation. 

Is this about you not wanting to run the news that they’re willing 

to give you, because you don’t want to give up the space for it, or 

is this about you not wanting to pay for the entirety of the channel, 

because you don’t want to have pay for the network programming 

too, because you can get it cheaper somewhere else? DISH, DIRECT? 

Mr. DODGE. I—well—I’d like to start off by saying we absolutely 

support giving consumers the right to decide what programming is 

local to them, and providing that programming to them. I also 

agree with Mr. Karpowicz, that they can only give us the rights 

that they have. 

Senator MCCASKILL. Correct. 

Mr. DODGE. And our answer to that is, hence the need for compulsory licenses, which no one agrees are ideal, but that’s the purpose of them, to clear rights. And even—there are multiple problems with this, but when Mr. Karpowicz says, ‘‘We’ll give you the 

rights for a newscast,’’ the broadcasters have admitted, or put in 

writing to Congress early this year, that they might not actually 

have all those rights, because they incorporate national bits and 

pieces, even to their local newscast, that they might not have the 

rights to grant the copyrights for—— 

Senator MCCASKILL. Well, let’s just assume, for this purposes, 

that they can. 

Mr. DODGE. OK, so assuming that—— 

Senator MCCASKILL. Why aren’t you doing—why can’t you offer 

Kirksville news to the folks in Kirksville, and why can’t you offer 

St. Joe news to the folks in St. Joe, and why can’t you offer, in Senator Udall’s State—why can’t—since they’re offering up their 

news—why can’t you do that, right now? 

Mr. DODGE. The issue is, one, consumers don’t—if we did that, 

their screen would be blank about 90 percent of the day, and consumers don’t want that. You know, two—— 

Senator MCCASKILL. Well, wait a minute, wait a minute. So, 

you’re saying that you—the consumers don’t want to get the news, 

because they’d have to change the channel to look at the national 

broadcasting on another channel that you might put in there? 

Mr. DODGE. I’m not saying that. I’m saying—— 

Senator MCCASKILL. Well, when—— 

Mr. DODGE.—you actually—— 

40 

Senator MCCASKILL.—it went blank after the news, wouldn’t 

they switch to whatever NBC programming you have on your lineup—— 

Mr. DODGE. They may—— 

Senator MCCASKILL.—that’s not in their DMA, that’s not in their 

community? 

Mr. DODGE. They may or may not. But, we’ve actually reached 

out to our customers, and they don’t want a screen that’s blank 90 

percent of the day. But—in putting that aside—— 

Senator MCCASKILL. How did you reach out to your customers? 

I’m curious about that. Because I—you know, I would have to believe the folks in Hannibal and Kirksville, if you called them and 

said, ‘‘Hey, we’re going to include, in your lineup, local news,’’—and 

I’ll guarantee you people in Missouri are smart enough to switch 

the channel when it goes blank. 

Mr. DODGE. I agree. 

[Laughter.] 

Senator MCCASKILL. Yes. So, I’m curious as to how you reached 

out to your consumers, because I’m not aware of you reaching out 

to the folks in Missouri that are in orphan communities. Have you 

done that in Missouri? Have you reached out to the consumers in 

those area and asked if they’d like to cover—to carry the local 

news? 

Mr. DODGE. I don’t know specifically if we spoke to folks in Missouri. 

Mr. GABRIELLI. So, this is—it’s complex. So, the people in New 

Mexico that are not in the New Mexico market, there would be an 

extra channel in their guide, it would show KOAT, and would have 

all the listings for all the programming that they normally carry. 

And you’d tune to it, and you would get a message, ‘‘This programming not available in the area.’’ So, they have to be recognized 

that, when local news shows up, that it’s going to be opened up to 

them, and when local news is gone, it’s going to be closed to them. 

One of the things that this fails to do, which is really most important, is emergencies. Nobody knows when emergencies are. All 

of a sudden there’s a breaking news story and they break into it. 

These customers would still be blacked out of that unless we could 

figure some super-technological way that they would inform us, 

‘‘Hey, emergency’s coming, open it up. OK, emergency’s over, shut 

it down.’’ So, it doesn’t fix the emergency messaging part of the— 

of what it—it really is very important to local news. 

Senator MCCASKILL. I guess this is an economic decision, correct? 

I mean, there’s nothing wrong with that. I’m not—you don’t—you 

can admit—— 

Mr. GABRIELLI. I don’t think—I mean—— 

Senator MCCASKILL.—that it’s an economic decision. 

Mr. GABRIELLI. Assuming we use the same capacity that we use 

for KOAT in New Mexico and it actually reaches this other part— 

because one of the parts that both of us, years ago—10-plus years 

ago—we designed satellites to reach the DMA’s, because that’s 

what we told the market was. And when you do a spot-beam satellite, you have to make sure this beam is just big enough so that 

you can put one next to it and one next to it and next to it. They’re 

not huge beams that overreach stuff, because they wouldn’t all fit. 

41 

So, assuming we can reach this upper part of New Mexico, it 

would a different—a channel in the guide that would be blank— 

it would be—listings would be there; most of the time, you wouldn’t 

get it. It could open up for local channels; and then, again, it would 

shut down. Consumers would probably call us a little bit, saying, 

‘‘Well, what about this show? Well, how come I can’t see that?’’ So, 

there is a complexity and a part of it that’s—you know, we’d all 

have to wrestle with. 

But, the emergency broadcast—you know, we couldn’t open it up 

and shut it down quick enough to get the breaking news—— 

Senator MCCASKILL. But, what about—couldn’t you just send 

them a note in their bill? Couldn’t you just give them notification? 

I mean, I—yes, no, I would think that if the people, you know, were 

told, ‘‘You can get local news, but you won’t get anything else on 

that channel but local news,’’ I think people would pay attention 

to that and appreciate it, and especially—you could include in that 

note in the bill—you communicate with your customers every 

month. Trust me, I get a big whoopin’ bill from one of you every 

month. So, every month the bill comes, you could communicate in 

that bill, ‘‘In your area, you can now get local news. It will not be 

available to you any other time. And, by the way, you will not get 

emergency break-ins on this channel; you should be aware of that.’’ 

I mean, that—it seems to me that would be a simple way—you 

have a way to communicate to your customers. 

Mr. GABRIELLI. OK, and then I’d also say there are probably four 

major news—four major stations in the New Mexico market. What 

happens if only three of them agree to do this and the fourth 

doesn’t? Then my customer’s going, ‘‘Well, I really like the NBC 

person. Can’t I get the NBC.’’ So, it is a very complex issue that— 

you know, that we’d have to work out with the broadcasters very 

closely. And part of it is, you know, an—overall, reaching agreement that if we can do one, we can do all. 

Senator MCCASKILL. Right. 

Mr. GABRIELLI. Because is it a must-carry situation; if we carry 

one, we have to carry all? Do we have to renegotiate? Three of 

them will give it to us for free, but the fourth says, ‘‘You know, 

that’s worth an extra, you know, coin in my pocket.’’ 

Senator MCCASKILL. I think we want to work with you. I think 

you—I think you’re getting the sense that you guys are being victimized by your success. I mean, you now have spread into enough 

of the markets in this country, and people are getting so spoiled 

with the variety of channels they get. We are getting constant pressure from people who can’t get their local stations, as to why that 

can’t get fixed. And I realize there are problems, and it’s complex. 

But, I think the quicker we all get together and figure out how to 

fix it, the better it’s going to be, in terms of your competition and 

the happiness of your customers. 

So, thank you, Mr. Chairman. 

The CHAIRMAN. Well, thank you. Good line of questioning, and 

that’s exactly what we’re going to do with this reauthorization; and 

in pretty short order, I hope. 

Senator Thune? 

42 

STATEMENT OF HON. JOHN THUNE, 

U.S. SENATOR FROM SOUTH DAKOTA 

Senator THUNE. Thank you, Mr. Chairman, and I want to thank 

our panelists for shedding some light on this subject. It is an important one, and one that Congress does have to deal with this 

year. And so, we appreciate your insights and—as we go through 

the, kind of, complex process of reauthorizing SHVERA. 

I’d like to direct this to Mr. Gabrielli and Mr. Dodge. And the 

question has to do with incentives. And, aside from an outright 

mandate, what incentives can or should this committee provide to 

the satellite TV providers to encourage local broadcast coverage for 

all 210 media markets? 

Mr. GABRIELLI. I guess I’ll start. 

So, we didn’t do a proposal to the Congress for ‘‘removing the 

barriers,’’ as we like to call them. One of them is some kind of a 

cost-sharing. It is—gotten very expensive to go to these markets, 

and, as Mr. Dodge pointed out, some of these markets have so few 

customers, it’s—it will be a loss to the company. We’ll never 

make—even break even on it. So, we’re hoping to share with the— 

you know, the broadcasters, some of this cost. It’d be no different 

than them putting up a—an additional tower to do repeating. It’s— 

you know, it’s a cost of getting their broadcast out. 

As I was asked, ‘‘You know, how many local channels do we 

carry?’’ We carry 2,500 local channels, compared to 500 national 

channels. And, you know, that’s more than the one-third capacity 

maximum that cable has to carry. 

So, some kind of a help, in that, you know, we don’t have to carry 

channels that are pretty redundant in the programming. There are 

a number of local channels who virtually repeat a national channel, 

but, because they’re being broadcasted also locally, we carry both 

versions. You know, something to look at maybe the—reducing that 

constraint on us. 

We think a lot of the things that are already being discussed— 

the grade-B bleeds and stuff like that will help—so that when we 

go to a market that’s missing some affiliates, we don’t have to try 

to negotiate with the three or four people that kind of bleed into 

it, each one wanting to be the station of choice; or, worse yet, dividing it up so, you know, half the market gets an NBC from outside 

left and half from outside right. 

So, there are a number of proposals which we’re, you know, 

happy to reiterate, that would help remove these barriers. 

Senator THUNE. And you think there ought to be any of those incentives that differ for DISH Network and for DIRECTV? 

Mr. DODGE. I would say, today we’re hamstrung in that—in the 

29 markets that we’re not—where we haven’t launched local service today, we don’t have the ability to bring in a distant-network 

signal. And they’re all short markets, so we can’t offer a full complement of network programming. So, we can’t make a competitive 

offering vis-a`-vis DIRECTV or the cable folks. So, in the simplest 

sense, that’s an additional incentive we would need to take that 

step. 

Senator THUNE. In light of the economic downturn, what we hear 

from—I hear, I know, from a lot of small broadcasters—and that 

is that they’re struggling with declining advertising revenue. So, if 

43 

the reauthorization of SHVERA includes market modification proposals that would allow for more out-of-market signals, how would 

that type of proposal impact broadcasters in predominately rural 

markets like the ones that I represent? 

And I’d direct that to—maybe—that’s a question, maybe, for Mr. 

Karpowicz. 

Mr. KARPOWICZ. It would be devastating, Senator. It would be 

very, very difficult, because the fragmentation of our local marketplace is—particularly in small markets—you know, in a larger 

market, a top-ten market, they might be able to sustain that; but 

in a smaller market, to have a competing duplicative signal come 

in over the top and basically split the audience and to fragment 

that audience would be very, very difficult. And it would really 

hamper that station’s economic health, and then their ability to 

continue to provide the service and the news and everything else 

they do. So, it would be devastating. 

Senator THUNE. Thank you, Mr. Chairman. 

The CHAIRMAN. Senator LeMieux? 

STATEMENT OF HON. GEORGE S. LEMIEUX, 

U.S. SENATOR FROM FLORIDA 

Senator LEMIEUX. Thank you, Mr. Chairman. 

First of all, thanks, to the panelists, for being here today. It’s a— 

obviously a complex issue. But, I wanted to just go on record for 

the people of Florida. We have three counties in the great northwest part of Florida—Escambia, Okaloosa, and Santa Rosa; this is 

all the way on the Panhandle, all the way to the west—that receive 

their broadcasting from Alabama. And although this area of Florida is affectionately called ‘‘L.A.,’’ meaning Lower Alabama, I know 

that those folks would like to get more local programming. 

So, I think a lot of the questions that have been asked on this 

topic—and the Chairman has said that we’re going to work together to try to find some solutions. But, I wanted to make sure 

you were aware of the challenges that we’re having in that part of 

Florida, that they’re not receiving as much local programming as 

they would like. And then just get you to comment, if you have 

anything additional to add whether, you know, the—we should be 

in a mandate situation or a market-based incentive situation, as 

Senator Thune just spoke to. 

Mr. Gabrielli, if you want to start. 

Mr. GABRIELLI. I mean, this is a problem that started 50 years 

ago, when there was only over-the-air broadcasters and these territories were established. And it is one of the few pieces of telecommunication that still has limitations on its area, that broadcasters still have these rights. 

You know, we’re willing to work with them on modifications and 

all that, but the way it’s been written and revised in each of these 

is, you know, these definite market areas we have to follow. So, it 

is a—it’s a complex problem, because I do agree that changing it 

would change the boundaries of a television station, which, you 

know, affects—would affect some stations not being in business, 

and the others would grow. 

But, it is—you have to recognize, it’s, you know, something that 

started 50 years ago, when that was—that territory became deVerDate Nov 24 2008 09:40 Jun 24, 2010 Jkt 054499 PO 00000 Frm 00047 Fmt 6633 Sfmt 6601 S:\WPSHR\GPO\DOCS\54499.TXT SCOM1 PsN: JACKIE
44 

fined, because that’s the only stations they got. And maybe we just 

need to recognize that’s just not the way the world is now, that you 

can get newspapers from outside, you can get Internet from the 

world, you know, and it’s just the television market that’s still 

sticking with this, ‘‘This is my territory, and I have exclusive 

rights.’’ And it’s—it is complex, because they have to negotiate and, 

you know, make sure they don’t override each other. 

Senator LEMIEUX. Mr. Dodge, did you have anything to add? 

Mr. DODGE. I would just—there are—with respect to just importing local news, there are also technical limitations we face, in that 

if you’re going to just broadcast the news at 6 o’clock in the 

evening, you actually have to set aside all the bandwidth for that 

channel all day long. So, if you do just that, other folks will suffer, 

and we’ll be able to launch less channels on a particular spot beam. 

Additionally, there’s a difference between us and cable, in that 

they generally have a local presence, and it’s easier for them to 

blackout, on a moment’s notice, as things change during the day, 

whereas we have a single team of folks in Cheyenne, Wyoming, 

who are responsible for managing our local stations across the entire network. So, it’s very, very unwieldy. 

But, we do support, as I said earlier, the concept of letting subscribers and consumers decide what, for them, is local, and trying 

to provide that to them. 

Senator LEMIEUX. Mr. Karpowicz? 

Mr. KARPOWICZ. Well, I guess, as it relates to the emergency 

broadcast concern that have—concerns that have been addressed 

here, I think we have to remember that, in those households, they 

are still going to be getting their local television station from their 

primary DMA. So, even if they had the news from New Mexico or 

the news from Atlanta, they would still have their primary newscast available to them from their DMA, which, quite frankly, is 

probably closer to them, in terms of geographic proximity, than getting the news from somewhere else. 

Senator LEMIEUX. Yes, but when it’s from a different State—— 

Mr. KARPOWICZ. Right. But, it’s—— 

Senator LEMIEUX. There’s a lot of—whole host of different issues 

that they may be interested in. Maybe—they may want to know 

what’s going on in State government, for example, down the street, 

and they’re getting Alabama State government news. 

Mr. KARPOWICZ. Absolutely, and that’s why I think, for regularly 

scheduled newscasts, that would certainly address those issues. 

What I was talking about was emergency coverage, which would be 

tornados and things of that nature. The proximity of the DMA station is such—they’re closer to that household than probably, you 

know, the secondary station that is being brought in. So, as it relates to the concern about bringing in emergency notices, I’m not 

as—I just don’t think that is as big a concern. 

Senator LEMIEUX. Ms. Thompson? 

Ms. THOMPSON. Our focus has primarily been, as I mentioned before, on our—on the State network issue. We have really—our real 

concern about in-State service has been with our 16 State networks 

that have been unable to reach all of the viewers who are satellite 

viewers within their States. 

45 

I had mentioned earlier that it ranges from 70 percent of all the 

citizens down to 1 and a half percent, but, even with 1 and a half 

percent, we’re looking at over 20,000 viewers. So, we are hopeful 

that we can work with the satellite companies on a permissive understanding that they will indeed serve all of their viewers with 

the in-State network. And we’re hopeful that the resolution that’s 

put into the bills in the Judiciary Committee will pass and will 

have the support of this Committee. 

Senator LEMIEUX. Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator. I appreciate it. 

Senator Begich, you passed, at first. Do you want to do a—— 

STATEMENT OF HON. MARK BEGICH, 

U.S. SENATOR FROM ALASKA 

Senator BEGICH. Mr. Chairman, just some quick, if I can? 

The CHAIRMAN. Sure. 

Senator BEGICH. Thank you very much. 

The CHAIRMAN. And then Senator Udall. 

Senator BEGICH. Mr. Dodge, you had made a comment, and I just 

wanted to kind of follow up so I can get a better understanding. 

I mean, we—Alaska’s somewhat unique. We don’t have this issue 

on noncovered areas. So, I’m listening to my colleagues and recognizing their struggles in ensuring that they get full coverage from 

their local broadcasters. We don’t have that problem, as rural and 

as unique as our State is. You mentioned the 29 markets you cannot get into. Can you just help me understand that a little bit 

more? And your ability to be in those markets may require incentives to do that—can you help me understand that? 

Mr. DODGE. Sure. As it stands today, the—I believe it’s the—in 

every remaining market we’re not in, which are the 29 markets, 

are ‘‘short markets,’’ meaning they’re missing—— 

Senator BEGICH. Right. 

Mr. DODGE.—a local affiliate. And we don’t have—we no longer 

have our distant license so that we can actually import a signal. 

And therefore, from a competitive standpoint, you know, say, in 

Glendive, Montana, where I believe there’s one local affiliate— 

doesn’t really make sense for us to launch it, from a competitive 

standpoint, because DIRECTV can bring it a full complement of 

network stations; the local cable folks can do the same. So, from 

a competitive standpoint, putting aside economics and all that, it 

just doesn’t make sense for us to go into the remaining markets, 

because we don’t have a viable product to sell to people. 

Senator BEGICH. Gotcha. 

Mr. DODGE. Everybody would go to DIRECTV or the cable folks. 

Senator BEGICH. Gotcha. 

Mr. DODGE. So, from an incentive standpoint, to go into those remaining markets, at a minimum we need that. And we think this 

is a great opportunity as well, after the digital transition, to put 

all players back on the same level playing field with respect to the 

119 distant license so the consumers have choice amongst the providers, it’s equal, and we can compete on customer service and 

service offerings alone. So, we’d ask for that, as well. 

Senator BEGICH. Very good. 

46 

Mr. Gabrielli, you had started to list a few incentives, I think it 

was to Mr. Thune’s—Senator Thune’s question. 

Mr. GABRIELLI. Yes. 

Senator BEGICH. Would you be willing—and I don’t want you to 

elaborate more on that right now—but could you give me kind of 

the shopping list, at some point, in written form—— 

Mr. GABRIELLI. Certainly, I—— 

Senator BEGICH.—what those—and then I’m going to ask you— 

and I’ll—and I know there are folks—knowing how this place operates, I’m sure there are folks from the Broadcast Association sitting 

out in this audience—your one idea on cost sharing, I’d be interest 

in more elaboration for that. 

And even though the broadcasters are probably in the audience, 

I’d asked them to send me the same thing on their view on this. 

It’s my way of getting the question to them through you, as they’re 

in the audience. 

Because I’d be interested in how you see that, and also the 

broadcasters see that. But, if you could give me that shopping list, 

I’d greatly appreciate that. 

And, for both of you, I was listening to Senator McCaskill’s line 

of questioning, and I just want to make sure—I’m going to use a 

different word; instead of ‘‘It’s not profitable,’’ ‘‘It doesn’t fit into the 

business model,’’ some of these situations. And I think the example 

you just gave, Mr. Dodge, was that; it doesn’t fit into the business 

model, because you’re—the competitive nature doesn’t exist for you, 

or the opportunity to be competitive and grab clients or share. Is 

that a—— 

Mr. DODGE. Well, with respect to just bringing in local news to, 

say, southern Colorado or to—— 

Senator BEGICH. Right. 

Mr. DODGE.—the Albuquerque DMA, there are—I guess, in the 

simplest form, there are practical concerns that we have, but also 

licensing concerns. 

Senator BEGICH. OK. 

Is that same thing on your end? 

Mr. GABRIELLI. Same thing. And I was going to say that, you 

know, we might have a chance to learn from history, because the 

last reauthorization allowed a limited amount of this market modifications. I mean, you know, New Hampshire and Vermont, two 

cases. And I think there was one in Alabama. But, we could look, 

you know, where we have actually done this in a limited amount, 

what the effect was. So, maybe we can learn from empirical data 

rather than just hypothesis of what it will cost. 

Senator BEGICH. Good comment, there. 

Ms. Thompson—and I caught your last comment—or, your comments throughout the testimony today about—that last resort is 

Congress in regards to trying to figure out how to inject good programming, PBS and so forth. How do you know when you reach 

that point? Because—you know, I know negotiations can go on for 

a long period of time, but how do you measure that so you can determine—in other words the way, again, this place moves, it’s very 

slow. So, when you might get to conclusion, it may take years for 

this body to move. Is there a better approach of simultaneously 

having that consideration? 

47 

Do you follow what I’m saying or—— 

Ms. THOMPSON. Yes. 

Senator BEGICH. Because you’re negotiating, and you may finish 

and say, ‘‘Guess we can’t get there.’’ But, the way this—it may be 

years before we come around and assist you in that effort. So, can 

you elaborate? 

Ms. THOMPSON. We have—both APTS and DISH—if I may speak 

for a moment for DISH—have both set an expedited time-frame on 

resolving our negotiations. The hope was that we would actually 

have them resolved prior to this hearing today, but we have hit 

some stumbling blocks that we’re continuing to work through as 

early as today, throughout the week. 

Our goal is, most clearly, getting our local stations carried in HD 

in local markets where DISH is providing HD coverage. Thankfully, because of the last SHVERA reauthorization that takes place 

in Alaska and Hawaii, the local public TV’s HD stations are being 

seen by the citizens there. 

Senator BEGICH. Absolutely. 

Ms. THOMPSON. That’s not the case in 150 markets where DISH 

is now. So, we want to expedite these negotiations, because we— 

it’s really—you know, viewers are not seeing public television as, 

you know, we’ve taken the time to go through this. So, we’re really 

hopeful that we come to a conclusion quickly, and the viewers will 

benefit from that. 

Senator BEGICH. Thank you very much. 

Thank you, Mr. Chairman. 

And you’ll keep us informed on the status? 

Ms. THOMPSON. Yes, sir. We will. 

Senator BEGICH. Thank you very much. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you, Senator Begich. 

And I would certainly urge the parties to do that. As I said earlier, it’s preferable to get it resolved on the private side, but, you 

know, if we have to tackle it, we will. 

Senator Udall? 

Senator UDALL. Thank you, Mr. Chairman. 

The—you made a—Mr. Karpowicz, a statement about KOAT. 

Was that in a letter form? Or was that—— 

Mr. KARPOWICZ. Yes, sir. 

Senator UDALL. That they—you have that with you? 

Mr. KARPOWICZ. Yes, I do. 

Senator UDALL. Could we make that part of the record? 

Mr. KARPOWICZ. Absolutely. 

[The information referred to follows:] 

KOAT–TV 

Albuquerque, NM, October 6, 2009 

To Whom It May Concern: 

This letter confirms that Station KOAT–TV, the ABC affiliate in Albuquerque, 

New Mexico, hereby gives consent, without charge, to each cable system and to 

DIRECTV and the DISH Network to retransmit the Station’s locally originated 

news, weather, and public affairs programming to all of each carrier’s subscribers 

located within the State of New Mexico, that are located outside the Albuquerque 

DMA, and where the station is significantly viewed. 

KOAT is already providing this service to Comcast Cable in Dona Ana County, 

so that viewers in Las Cruces, New Mexico, which is part of the El Paso, Texas 

48 

DMA, can be informed. This is further evidence that local news, weather and public 

affairs programming can be made available throughout the state. 

Sincerely, 

MARY LYNN ROPER, 

President and General Manager. 

Senator UDALL. Is the—is what they’re saying that—basically, 

that they’re willing to put it out without any—could you just read 

us—— 

Mr. KARPOWICZ. Yes, sir. 

Senator UDALL.—the crucial part of the letter there? 

Mr. KARPOWICZ. Yes, sir. 

‘‘To whom it may concern, This letter confirms that Station 

KOAT, the ABC affiliate in Albuquerque, New Mexico, hereby gives 

consent, without charge, to each cable system and to DIRECTV and 

DISH Network to retransmit the station’s locally originated news, 

weather, and public affairs programming to all of each carrier’s 

subscribers located within the State of New Mexico. KOAT is already providing this service to Comcast cable in Donna Anna County so that viewers in Las Cruces, New Mexico, which is part of the 

El Paso, Texas DMA, can be informed. This is further evidence that 

local news, weather, and public affairs programming can be made 

available throughout the State.’’ 

And it was signed by Mary Lynn Roper, the president and general manager of KOAT. 

Senator UDALL. Thank you very much. And that’s a very positive 

development, I think. 

My question to the two gentlemen to your right, there, would be, 

Are you willing to run it now? 

Mr. GABRIELLI. I think the answer is, we’ll certainly look at it. 

It’s a—complex whether that signal actually reaches the entire part 

of the rest of New Mexico that needs to be reached. So—because, 

again, our spot beams were designed, 10 year ago, to reach a certain area, and hopefully this is within it. That’s a very big constraint. 

We have to make sure that we allow just these people, I am assuming, that are in New Mexico and not across the State border, 

where we’re actually in the other DMA, to see it. So, we have to 

define a blackout that’s very specific to this. 

And then, one of the hardest ones is keeping track, with the stations, of what is it they’ve—giving us the rights to? Because if their 

local programming goes long or if it runs—what happens if a baseball game is on, but it runs long, and they’re going to delay the 

local programming. All of a sudden we open it up—because it—this 

will be automated, there won’t be people standing there. Now the 

game’s on. You know, are we going to get in trouble? 

So, when you talk about, you know—and I’m sure Congress 

knows—the devil in the details, this is going to be one of those. 

Senator UDALL. Mr. Dodge? 

Mr. DODGE. I guess I’ll just reiterate what I’ve said earlier, 

which is, we have reservations about whether they actually have 

all the necessary rights to grant us the copyright to rebroadcast 

just their local news, weather, et cetera, be it with their local advertising or national news clips inserted into their local news. 

And—huge practical limitations, in that it’s nearly impossible for 

49 

us to blackout programming around the country, and you have to 

set aside bandwidth for a few hours a day, an entire channel, on 

a spot beam. So, from a practical perspective, it’s very difficult to 

implement the way that the broadcasters have outlined. 

Senator UDALL. Thank you. 

Mr. Karpowicz, in your written testimony you said, in talking 

about this issue of modifying TV markets, quote, ‘‘It would not advance localism goals, but would, in fact, undermine sound public 

policy and harm consumers,’’ end quote. The last time SHVERA 

was reauthorized, a handful of exemptions were made by States 

with the same problem as New Mexico. Were consumers harmed by 

these limited exemptions that allowed satellite companies to provide secondary transmissions of in-State TV signals? 

Mr. KARPOWICZ. I think our economic reality has changed dramatically since the first authorization of SHVERA, and the fact 

that those exceptions took place in isolated pockets. And, quite 

frankly, I don’t have the historical perspective on what impact 

those have. 

I can say, though, with—I believe, with certainty—that today, in 

today’s environment, if we were to implement a full duplication of 

signal—if another signal came in, in its entirety, including network 

programming, syndicated programming—came in over the top of a 

local station, it would inhibit his ability to perform, and certainly 

have a great economic impact, and have an impact on his ability 

to subsidizes his news and all the other services that he provides 

in his market. 

Senator UDALL. Thank you. 

Chairman Kerry, thank you very much for your courtesies in allowing this second round. 

The CHAIRMAN. Oh, absolutely. Important questions. I appreciate 

the participation of so many Senators. And I think it’s been very 

helpful in creating the record for this. 

Obviously, you all can sense, from every question, there’s a pretty focused area of concern here, and we’re going to need to address 

it. You know, this question of why there—Mr. Dodge, there are 

150, you know, areas where public can’t be carried in HD. It can 

be carried elsewhere. It’s just—you know, it’s pretty fundamental. 

And we want to maximize the ability of citizens to get local and 

to get the kind of quality that they deserve. 

So, we’re going to work to do that. We will get this done in the 

Committee as soon as we can. 

I will leave the record open for a week because there are additional questions that I don’t have time to submit right now, to 

question you on, because I have an 11:30. But—and other Senators 

may have additional questions we want to submit in writing. 

So, I’d ask you to try to respond to those as rapidly as possible, 

and the Committee will continue its work behind the scenes and 

get ready to do a markup and get this done. 

Thank you all very, very much for being here today. We appreciate it. 

Hearing is adjourned. 

[Whereupon, at 11:31 a.m., the hearing was adjourned.] 

(51) 

A P P E N D I X 

PREPARED STATEMENT OF HON. JOHN D. ROCKEFELLER IV, 

U.S. SENATOR FROM WEST VIRGINIA

Over the past 15 years, satellite television has grown into a strong competitor to 

cable by offering consumers in rural as well as urban markets a choice in pay television providers. Where residents once were limited to a single cable operator, satellite providers now offer most consumers an alternative. This has led to price and 

service competition, which is good for subscribers. Congress supported such competition through the passage of the Satellite Home Viewer Act and its progeny, including the Satellite Home Viewer Extension and Reauthorization Act or SHVERA. 

Now we are faced once more with the reauthorization of SHVERA. This entails 

the extension of certain communications and copyright provisions, but it also provides us with the opportunity to examine whether consumers across the country are 

adequately served by existing law. 

A decade ago, Congress, recognizing that consumers want access to local news, 

weather, and community-oriented programming, established a mechanism by which 

satellite providers could offer local broadcast stations to residents in the local market. This means that when a satellite subscriber in Huntington, West Virginia 

tunes-in to CBS, PBS, ABC, FOX or NBC, they hear about events in the state capital and see the successes and trials of their neighbors—not the weather in Manhattan. 

Recognizing the limits of satellite providers at the time, Congress did not require 

the companies to offer local channels to every market in the country. Over time, this 

has created a division between haves and have-nots in which satellite companies are 

not providing local channels to residents in the smallest markets. 

In West Virginia, DIRECTV recently began providing local service to the Beckley 

area, which I applaud, but that still leaves the Parkersburg and Wheeling markets 

without local channels. In reauthorizing SHVERA, I believe that we should examine 

how all consumers in even the most rural regions can gain access to local news, 

sports, and community programming. 

As some broadcast television has become coarser and less informative, the importance of the mission and programming provided by public television has grown. Unfortunately, getting carriage of public television programming to satellite subscribers has not always been easy. 

For example, existing copyright law makes it difficult for state-wide public television networks, like that in West Virginia and 14 other states, to reach every resident of the states they serve. I am pleased that the Senate and House Judiciary 

committees have addressed this issue in their reauthorization legislation. I also understand that public television and the satellite providers have been discussing 

other carriage issues and look forward to hearing about the progress of those talks. 

The reauthorization of SHVERA provides us with the opportunity to encourage 

greater competition and access to quality programming to consumers throughout the 

Nation. I thank the witnesses for coming today and welcome their thoughts on these 

issues. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. JOHN D. ROCKEFELLER IV 

TO ROBERT M. GABRIELLI

Question. Satellite television has spawned greater competition among pay television providers, especially in rural areas. This benefited consumers by giving them 

more choices and in some areas lowering prices. A key component to making satellite television attractive to consumers is the carriage of local channels. Unfortunately, in approximately 23 markets, neither DIRECTV nor DISH Network offers 

local broadcast channels. Two of those markets are in West Virginia, Parkersburg 

and Wheeling. Consumers in those communities want access to their local news, 

sports, and regional programming. 

52 

What can be done to make sure that people throughout the country can get access 

to local broadcast stations? If there is no obligation or incentive to serve all 210 

markets would DIRECTV or DISH Network do so and by what date? What steps 

can broadcasters take to encourage or incentivize the extension of local service to 

unserved markets? 

Answer. Perhaps the most important step Congress could take to incentivize the 

extension of local service is not to adopt the broadcasters’ proposal with respect to 

multicast signals. 

As we discussed in our testimony, while satellite is the perfect technology for delivering national programming to even the most rural customers, it is much less efficient at delivering local channels. Accordingly, we have spent billions to offer local 

service to more than 95 percent of Americans. 

Yet the economics of serving the very smallest markets are daunting. Our costs 

to serve Parkersburg—in terms of satellite capacity, local receive facilities, and 

backhaul—are comparable to those to serve Cleveland. Parkersburg, however, has 

only a fraction of Cleveland’s population—making it much harder to recoup our 

costs. 

It would be even more difficult to recoup our costs if we could not even deliver 

the full complement of network programming that our cable rivals offer. This is a 

very real problem in ‘‘short’’ markets like Parkersburg, which are missing one or 

more network affiliates. 

The broadcasters propose to make this problem even worse. Today, we cannot deliver distant signals to subscribers who can receive a local network station’s analog, 

or ‘‘primary,’’ signal over the air. Broadcasters now want to extend that prohibition 

to subscribers who can also receive network programming over-the-air on a station’s 

secondary digital ‘‘multicast’’ feed. They argue that, if we want to carry the ‘‘missing’’ network programming in short markets, we should carry the multicast feed 

rather than a distant signal. 

Where we have room to carry multicast feeds, we generally do so (for example, 

in Bluefield-Beckley). But, because we designed our satellite spot beams to maximize the number of markets served, we often lack room on individual beams to 

carry multicast signals. In such situations, we must rely on distant signals to fill 

out our local service offering. 

The broadcasters’ proposal would guarantee that we could not offer all four networks in many of the smallest markets. We can think of no greater disincentive to 

providing local service in these markets. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. MARIA CANTWELL TO

ROBERT M. GABRIELLI

Question 1. What are DIRECTV’s publicly announced plans for launching new satellites in the upcoming years? What is the purpose of each of these satellites (i.e., 

add capacity, replacement, etc.)? 

Answer. We plan to launch a new, state-of-the-art satellite, DIRECTV 12, later 

this year or early next year. D12 will replace spot-beam capacity used for local service on an older satellite, and will add capacity to be used for additional high definition national channels. 

Question 2. Has DIRECTV switched over to using the MPEG–4 format exclusively? Has the use of the MPEG–4 format helped you to better manage the (bandwidth) capacity of your satellites? 

Answer. DIRECTV uses MPEG–4 exclusively on all of its new satellites. But we 

use MPEG–2 on our older satellites. We will continue to do so for the foreseeable 

future, as many millions of our customers still use older receivers and antennas incapable of processing MPEG–4 compression. MPEG–4 allows us to deliver programming—especially data-intensive high-definition programming—far more efficiently 

without sacrificing picture quality. This allows DIRECTV to, for lack of a better 

term, ‘‘fit’’ more channels into a fixed amount of transponder capacity. 

Question 3. Does the DIRECTV currently offer service to consumers in the five 

so-called ‘‘orphan counties’’ in southwest Washington State that are in the Portland 

DMA? Is the spot beam servicing these communities the same one that covers the 

Portland DMA? How does DIRECTV ensure that there is no overlap between the 

spot beams that serve the Seattle DMA and the Portland DMA? As a result, are 

there locations between the two DMAs where there is no spot beam coverage? 

Answer. Yes. Please note, however, that the satellite spot beam with which we 

provide service in the Portland local market does not cover all of Klickitat County. 

(It does completely cover the other four counties.) Yes, we use the same spot beam 

to offer service in these ‘‘orphan counties’’ and service in the Portland DMA. The 

53 

two beams operate over different frequencies. In fact, they are on different satellites. 

Thus, while they do overlap geographically, they do not interfere with each other. 

(This is the same principle that allows thirteen FM radio stations to operate in 

Washington DC without interfering with one another.) 

Question 4. A number of my constituents living in those five orphan counties— 

Clark, Cowlitz, Klickitat, Skamania, and Wahkiakum—have told me that they 

would like to receive news and public interest programs from the Seattle market, 

which includes coverage from our state capitol Olympia. As you know, several States 

have counties which are part of the DMA of a neighboring state. One thought is 

to have the news and public interest programming from the State the orphan counties are located in be broadcast on a separate satellite channel. I understand your 

concern about a channel that remains dark for most of the day and then is on for 

a few hours to broadcast news and public interest programming. What are the technical, operational, and legal barriers for setting aside one channel in each DMA 

where you provide local-into-local service to serve as a PEG-like channel? 

Answer. We would have to overcome many hurdles to make such an offering, but 

the biggest of these is our lack of capacity. Nearly all of our spot beams on which 

we provide local service are now full. (We needed to fill these spot beams in order 

to maximize the number of local markets we could serve.) So we simply could not 

offer news and public interest programming in the manner described above. We support an approach to ‘‘orphan counties’’ similar to the last reauthorization’s approach 

to southern Vermont, southwestern Mississippi, and northern New Hampshire. 

Such an approach would permit us to carry stations in neighboring, in-state markets (including orphan counties) where our technology permits. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. JOHN D. ROCKEFELLER IV 

TO R. STANTON DODGE

Question 1. Satellite television has spawned greater competition among pay television providers, especially in rural areas. This benefited consumers by giving them 

more choices and in some areas lowering prices. A key component to making satellite television attractive to consumers is the carriage of local channels. Unfortunately, in approximately 23 markets, neither DIRECTV nor DISH Network offers 

local broadcast channels. Two of those markets are in West Virginia, Parkersburg 

and Wheeling. Consumers in those communities want access to their local news, 

sports, and regional programming. 

What can be done to make sure that people throughout the country can get access 

to local broadcast stations? If there is no obligation or incentive to serve all 210 

markets would DIRECTV or DISH Network do so and by what date? What steps 

can broadcasters take to encourage or incentivize the extension of local service to 

unserved markets? 

Answer. Satellite-delivered local-into-local service has been a great driver of consumer choice and innovation in the subscription television business. DISH Network 

L.L.C. (‘‘DISH’) has been the leader in providing local-into-local service, launching 

service in 181 of 210 markets representing approximately 98 percent of households 

nationwide. There are a number of challenges—operational, legal, and economic— 

to add local-into-local service to the remaining 29 markets. Congress can take steps 

this year to help address each of these central challenges to launching additional 

markets, including the two unlaunched West Virginia DMAs. 

Operational Challenges 

The first is lack of available spot beam capacity, particularly along the East 

Coast. Unlike terrestrial providers that have substantial capacity to provide 

multiple services over their pipe, DISH has limited satellite frequencies and satellites to provide a competitive national video-only service. To launch the remaining unserved markets, DISH would need to find or create capacity to add 

approximately 100 additional channels (including those in the Wheeling DMA) 

on our system, which is effectively at capacity today. 

Wheeling is one of those markets that DISH does not have adequate capacity 

to serve today. Additional planned satellites will provide some capacity to expand service into additional markets like Wheeling. From a commercial perspective, DISH has to make a difficult decision in planning each new satellite on 

how to allocate the finite number of satellite frequencies and beams between 

local and national services. Adding more local-into-local markets—in standard 

definition or high definition—makes DISH more competitive in that particular 

market, but it reduces the variety of services that DISH can offer nationally in 

all 210 markets. 

54 

To address this issue, Congress should avoid mandating any additional carriage 

obligations on satellite providers—e.g., accelerating the FCC’s HD must carry 

mandate for some or all broadcasters—or providing broadcasters with expanded 

exclusivity protections for multicast signals. The focus of Congress has been to 

intent satellite providers to launch additional markets. Adding conflicting capacity demands would only frustrate our good faith efforts to fulfill Congress’s 

objective and launch additional local-into-local markets. 

Legal Challenges 

A second key challenge is one of consumer expectations. Our subscribers that 

choose to receive a locals package expect to receive at least NBC, CBS, ABC, 

and FOX content. Yet, in 26 of the 29 markets we have yet to launch, one or 

more of those networks is not available as the primary video feed of a station 

in that market. In some instances, only a single national network affiliate is 

present in these markets. Parkersburg is one of these ‘‘short markets,’’ because 

there is no ABC or CBS affiliate in Parkersburg. Today, DISH does not have 

the legal right to ‘‘fill’’ this short market under its local-into-local compulsory 

license. 

With respect to short markets, the Judiciary Committee has provided a potential framework with the Satellite Television Modernization Act of 2009 (S. 

1670). The bill would give DISH the rights to provide quasi-local services under 

its local-into-local license to fill in short markets like Parkersburg with adjacent 

broadcast stations. This provision would permit DISH to import an NBC and 

FOX affiliate from the Clarksburg DMA to provide a viable service to Parkersburg residents. However, importantly, just like any other pay TV provider, 

DISH should have the flexibility to provide an in-state or other broadcast station to fill a short market if the adjacent market’s signal does not adequately 

cover the short market. This is a modest, but important, alteration to the Senate Judiciary Committee’s approach. 

Additional key quasi-local rights included in that bill are the ability to import 

broadcast stations that are deemed significantly viewed in the local market and 

to provide in-market low-power stations. Some similarly complementary rights 

should also be included in the local license: the ability to import out of market 

signals during emergencies; the right to serve recreational vehicles and commercial trucks; and the right to provide network content to households outside of 

our local spot beams. 

Economic Challenges 

The last key challenge is economic. A national satellite provider has no existing 

infrastructure in an unlaunched market. Thus, DISH needs to establish new facilities and new infrastructure in each new market it elects to serve with local 

channels. The upfront and recurring cost to do so can be considerable, centered 

on the establishment of a local receive facility and associated backhaul fiber and 

equipment. Yet, many of the remaining markets are very small, limiting significantly our ability to recoup our upfront and recurring investment in these markets. Wheeling and Parkersburg are two such smaller markets, Nielsen market 

numbers 159 and 193 respectively. 

The expense associated with retransmission consent fees and other programming-related costs can adversely affect the business case for launching a new 

market: a market that could otherwise be economically viable becomes a money 

loser when escalating programming costs are factored into the equation. Congress should ensure that measures intended to incent additional market 

launches do not have the opposite effect because of financial considerations. A 

case in point, the importation of adjacent broadcast stations into short markets 

should not require double compensation. Typically, subscription TV providers 

pay either a retransmission fee to the local broadcast station or a copyright royalty payment for carriage. Any requirement to pay double compensation—that 

is, both a retransmission consent fee and a royalty payment—to carry the same 

station would create an unintended financial disincentive to provide these signals. DISH should pay a royalty fee for filling in a short market just as 

DIRECTV does today. Similarly, broadcasters should drastically reduce—if not 

forego altogether—their retransmission consent fees for these unlaunched markets to ensure our joint viewers have access to their free over-the-air content. 

Each of these proposed changes increases the likelihood that consumers in the remaining 29 unlaunched markets would receive service that is more comparable to 

their urban counterparts. Indeed, DISH is prepared to invest in the remaining 29 

markets if necessary changes to copyright and communications law are made to enVerDate Nov 24 2008 09:40 Jun 24, 2010 Jkt 054499 PO 00000 Frm 00058 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\54499.TXT SCOM1 PsN: JACKIE
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sure parity of rights going forward across competing providers. Assuming the final 

reauthorization statute reflects a framework that achieves parity of rights across 

competing providers, DISH will provide local-into-local service in all markets no 

later than 2 years from the date the bill is signed into law. Importantly, this commitment assumes that there are no new carriage obligations that would require 

DISH to redirect bandwidth to other services, and that there are no major unforeseen implementation challenges, such as a launch delay or failure, in-orbit satellite 

failure, or other similar mitigating event. 

Question 2. Far too much of the programming offered to consumers is designed 

to entertain on a base level. It does not enlighten, educate, or elevate the viewer. 

Instead, I see a coarsening of society with media in the vanguard. Public television 

is one of the few resources for programming that educates and shares the best of 

our culture. Programming such as Ken Bums’ documentary on the National Parks 

expose viewers to the grandeur and history of America. Such programming however 

is best viewed in high-definition (HD) format. I am concerned when satellite providers choose to offer ‘‘Dancing with the Stars’’ in HD format and not ‘‘The War.’’ 

I understand that DISH and the public television stations are in discussions over 

the carriage of local HD programming as well as mechanisms to provide subscribers 

with access to public television multicasting channels. What is the status of those 

negotiations? If no agreement is reached, what can Congress do to encourage consumer access to such programming? 

Answer. As an independent distributor of video programming, DISH worked 

proactively with its programming partners to establish the DISH Family programming package that offers households an affordable and kid-safe package of channels. 

Nonetheless, DISH shares your concerns about the overall quality of television programming, and offers both vertically-integrated and independent programmers the 

opportunity to bring high-quality and family friendly programming to over 13 million households today. We welcome your leadership to ensure that the wholesale 

programming market provides distributors with the flexibility to offer consumers 

high-quality and affordable packages of programming that appeal to all different 

types of consumers. 

With respect to public broadcasting, DISH currently carries more PBS affiliates 

than any other pay TV provider. Further, if the necessary changes are made to the 

statute and DISH serves all 210 markets, then all Americans will have access to 

their local PBS station—even if they are located outside the reach of a broadcast 

tower. For the first time, all residents of mountainous areas of West Virginia will 

be able to view the latest Ken Burns documentary. 

We are also preparing to roll out PBS affiliates in HD consistent with the Federal 

Communications Commission’s schedule adopted last year, starting this February. 

Given our current capacity constraints, it is not feasible for DISH to launch every 

PBS affiliate in HD before 2013. 

Nonetheless, we remain willing to work with the Association of Public Television 

Stations (‘‘APTS’’) and PBS on a deal that delivers PBS HD content to DISH subscribers on a more accelerated schedule than the FCC has mandated. To that end, 

we have negotiated in good faith with APTS to provide our joint viewers expanded 

PBS viewing options on DISH. We have offered numerous constructive proposals to 

address the needs articulated by APTS. Those negotiations have not yet resulted in 

a national carriage deal, but DISH remains committed to finding a commercial resolution. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. MARK PRYOR TO

R. STANTON DODGE

Question 1. What are the constraints to increasing your ability to offer local-intolocal programming for all television markets? 

Answer. Please see the response to Question 1 from Chairman Rockefeller with 

respect to the legal, economic and operational challenges faced in launching additional local-into-local markets. DISH has launched 181 markets to date, and is willing to work constructively to find means to launch the remaining 29 markets in a 

reasonable timeframe. Congress can take important steps this year to provide DISH 

with the tools and the incentive to launch local service in every market as long as 

it does not impose conflicting capacity demands on a satellite system that is effectively at full capacity today. 

Question 2. Hypothetically, should you be able to expand into all 210 television 

markets, How soon could you implement the agreement? 

Answer. Please see the response to Question 1 from Chairman Rockefeller with 

respect to the necessary changes to provide DISH the legal rights and proper incenVerDate Nov 24 2008 09:40 Jun 24, 2010 Jkt 054499 PO 00000 Frm 00059 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\54499.TXT SCOM1 PsN: JACKIE
56 

tives to invest in the remaining 29 markets, as well as the time frame DISH could 

commit to if final legislative action provides the legal and economic framework for 

a satellite carrier to serve every market. 

Question 3. What would DISH Network’s stated policy for distant signal importation be? Would priority be given to adjacent market signals? 

Answer. Given the ‘‘if locals, no distants’’ provision in the law today, DISH would 

not provide a traditional distant service if it launched all 210 markets. DISH would, 

however, still need to import out-of-market stations to fill in short markets, provide 

service to out-of-beam customers, and provide significantly viewed stations to our 

subscribers. To the extent DISH can provide an adjacent broadcast station from the 

same or an overlapping spot beam, DISH’s preference would be to offer consumers 

that more local option. DISH would, however, require some flexibility to provide a 

regional or national feed where the adjacent broadcast stations cannot reach all, or 

some, of the neighboring DMA just as other pay TV providers do today. 

Question 4. There is one short market in my state in Jonesboro. How would you 

fill this short market? 

Answer. It remains unclear what options DISH will have under the law to fill 

short markets like Jonesboro. Our ability to launch this market is dependent upon 

a path to offering a ‘‘locals package’’ that includes the missing CBS, NBC, and FOX 

content in a cost effective and straightforward manner. Technically, DISH has the 

ability to bring in the missing content from a national market or an adjacent market. With respect to compensation for filling a short market, DISH should pay a 

copyright royalty payment just as DIRECTV does today. There is no basis to layer 

on an additional payment (I. a, retransmission consent fee), which could have the 

perverse result of foreclosing DISH ‘s ability to justify the economics of launching 

more short markets. 

Question 5. What is the status of your negotiations with public television for HighDefinition and multicasting programming? 

Answer. Please see the response to Question 2 from Chairman Rockefeller above. 

As PBS’s largest distributor, we are hopeful a long-term carriage deal can be 

reached that increases the amount of PBS content on DISH in a manner that is consistent with the operational realities of our system. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. MARIA CANTWELL TO

R. STANTON DODGE

Question 1. What are DISH Networks publicly announced plans for launching new 

satellites in the upcoming years? What is the purpose of each of these satellites (i.e., 

add capacity, replacement, etc.)? 

Answer. The upcoming launch schedule for DISH and its sister company, 

EchoStar Corporation, is as follows: 

• 1Q–2Q 2010: EchoStar 14 (DISH) will be launched to replace EchoStar 7 at 

119° W.L. EchoStar 14 will be a hybrid national/local satellite that will provide 

some additional capacity and overall efficiencies, but will not materially change 

DISH’S overall satellite capacity. 

• 3Q–4Q 2010: EchoStar 15 (EchoStar) will be launched to replace EchoStar 3 at 

61.5° W.L. EchoStar 15 will be a national satellite that will provide some additional capacity and overall efficiencies that have been lost because of infirmities 

to EchoStar 3. Those gains, however, will not materially change DISH’S overall 

satellite capacity. 

• 2Q–3Q 2011: Quetzsat 1 (Quetzsat) will be a replacement satellite for EchoStar 

1 and EchoStar 8 at 77° W.L. This is a Mexican satellite on which EchoStar 

has leased capacity to provide service into both the United States and Mexico. 

As with the other replacement satellites, capacity gains will not be significant. 

• 3Q–4Q 2012 (tentative): EchoStar 16 (EchoStar) is the intended replacement 

satellite for EchoStar 12 at 61.5° W.L. This satellite will be designed in part— 

to satisfy the February 2013 final benchmark for the FCC’s HD carry-one, 

carry-all mandate. 

The key to expanding capacity significantly is new spectrum. The challenge faced 

today is that DISH and EchoStar effectively use all of their allocated direct-to-home 

satellite spectrum, so launching new satellites does not necessarily add any substantial capacity gains. DISH and EchoStar have, however, been able in recent years 

to add considerable capacity thanks to commercial arrangements with Canadian and 

Mexican companies with satellite spectrum that was not previously available to 

DISH subscribers. 

57 

DISH will continue to seek out additional non-U.S. spectrum resources to expand 

service available to U.S. consumers. One potential source of additional spectrum domestically is 17/24 GHz BSS (‘‘Reverse Band’’). EchoStar has recently been granted 

five 17/24 GHz BSS authorizations for frequencies not used today for direct-to-home 

services. The launch milestones for those satellites are not until 2014, and there are 

a number of technical and international coordination issues that must be resolved 

before DISH can achieve any increased capacity as a result of the Reverse Band frequency grant. 

Question 2. Has DISH Network switched over to using the MPEG–4 format exclusively? Has the use of the MPEG–4 format helped you to better manage the (bandwidth) capacity of your satellites? 

Answer. DISH continues to invest aggressively in new satellites and new technologies, one of which is state-of-the-art MPEG–4 compression. All of our high definition programming—both national and local content—has been transitioned to 

MPEG–4 compression. MPEG–4 has been critical to DISH’s ability to manage its 

capacity and to compete with bandwidth-rich terrestrial providers. Without MPEG– 

4 technology, DISH would not be a leader in national HD programming—140 HD 

channels—and would not be able to provide some local channels in HD in over 150 

markets. 

There is no current plan to transition all standard definition programming from 

MPEG–2 to MPEG–4. Among other issues, the key challenge to an MPEG–4 transition is our legacy customer base with one or more MPEG–2 receivers in their home. 

Our 13 million plus subscriber base would need to he upgraded with more expensive 

equipment to view MPEG–4 programming. Through new customer acquisition, HD 

upgrades, and customer churn, the number of households with MPEG–4 equipment 

will grow organically in the next few years. 

Question 3. Does the DISH Network currently offer service to consumers in the 

five so-called ‘‘orphan counties’’ in southwest Washington State that are in the Portland DMA? Is the spot beam servicing these communities the same one that covers 

the Portland DMA? How does DISH Network ensure that there is no overlap between the spot beams that serve the Seattle DMA and the Portland DMA? As a result, are there locations between the two DMAs where there is no spot beam coverage? 

Answer. Yes, DISH provides customers in Wahkiakum, Cowlitz, Clark, Skamania, 

and Klickitat counties with local-into-local service from the Portland, Oregon DMA. 

These counties are ‘‘orphaned’’ in that they do not have the option to receive local 

channels from in-state Yakima or Seattle in addition to their assigned locals. 

The Portland and Seattle local stations are not on the same DISH spot beam. 

DISH provides local-into-local service from a number of different satellites and orbital locations to minimize the out-of-beam overlap issue highlighted in the question. In this case, the Portland DMA is served from EchoStar 10 at 110° W.L., and 

Seattle DMA is served from EchoStar 7 at 119° W.L. There are no locations between 

Portland and Seattle DMAs where there is not spot beam coverage. 

As a practical matter, Portland and Seattle could not share the same satellite spot 

beam transponder because there are too many channels in the combined markets. 

Spot beam transponders typically carry up to 14 standard definition channels, yet 

Seattle has 13 local channels on DISH and Portland has 9 local channels. 

Question 4. A number of my constituents living in those five orphan counties— 

Clark, Cowlitz, Klickitat, Skamania, and Wahkiakum—have told me that they 

would like to receive news and public interest programs from the Seattle market, 

which includes coverage from our state capitol Olympia. As you know, several States 

have counties which are part of the DMA of a neighboring state. One thought is 

to have the news and public interest programming from the State the orphan counties are located in be broadcast on a separate satellite channel. I understand your 

concern about a channel that remains dark for most of the day and then is on for 

a few hours to broadcast news and public interest programming, What are the technical, operational, and legal barriers for setting aside one channel in each DMA 

where you provide local-into-local service to serve as a PEG-like channel? 

Answer. Our customers in Clark, Cowlitz, Klickitat, Skamania, and Wahkiakum 

counties and 731 more counties across the Nation tell us the same thing—the current system based on designated market areas is broken and too often fails to deliver the local content consumers deem local to them. These orphaned counties are 

often too far away from their ‘‘local- out-of-state broadcasters and their in-state 

broadcasters for any in-depth coverage. In-state DMA reform would create a clear 

incentive for both in-market and in-state broadcasters to provide more robust 

weather and regional news to these communities. 

58 

A PEG-like Station Is Technically Infeasible for Satellite Providers. The objective 

of in-state DMA reform efforts is to provide consumers with service they want by 

capitalizing on the national scale of satellite provider operations. Solutions that may 

make sense for cable companies but are a poor technical and operation fit for satellite providers will not result in expanding options for consumers. Unfortunately, 

a PEG-like channel dedicated to adjacent local news programming—which may 

work for a local cable company—is not feasible for a national satellite provider. 

The first challenge for a satellite carrier would be a lack of available spot beam 

capacity. A new PEG-like news channel is a new unique channel requiring the same 

space on the satellite as NBC or PBS. A spot beam typically ‘‘sees’’ multiple markets 

(e.g., San Francisco, Monterey, Sacramento), and that limited capacity is shared 

amongst those markets. Our spot beam configurations are designed to maximize the 

number of markets that can be served, and are effectively full today. For example, 

if DISH sought to add a Sacramento news feed station, it would need to eliminate 

another channel from San Francisco, Sacramento or Monterey (an impossibility 

under carry-one, carry-all rules). 

The second core challenge is one of implementation. DISH would be responsible 

for splicing together real-time programming from multiple broadcasters in any number of similarly situated markets across the Nation to create an adjacent market 

news channel. While a single channel is far superior for consumers than blacking 

out content on individual adjacent market channels, it creates even greater logistical 

challenges for DISH. DISH is not aware of any pay TV provider effectively creating 

daily programming line-ups in the manner that would be contemplated here. DISH’s 

national service greatly complicates the logistical and operational issues with such 

a proposal. DISH’s engineers manage over 1,400 local broadcasters nationwide without any local points of presence to make programming adjustments and changes. In 

contrast, cable is inherently local, offering more flexibility and minute-by-minute 

control than does a satellite’s national architecture. A cable system typically covers 

a single local market, and the operator of that cable system only has to navigate 

a single set of local broadcasters (4 to 20 in total). 

The third challenge is a legal one. Broadcasters have not addressed lingering 

questions about their ability to offer a private copyright license for their news programming that include national newsclips, and advertisements. Even if the broadcaster has legal rights to a particular newscast, that grant of rights is a very narrow 

private copyright limited to a few hours per day. Broadcasters offer no copyright 

protection or indemnification for what happens if NBC Sunday Night Football runs 

into the 11 PM news and is provided to DISH customers without rights or permission. Given the number of last minute programming changes and programming 

overruns (i.e., whenever you lose the last few minutes of a program on your DVR), 

DISH would have to manually monitor programming nationwide to ensure a compliant system or risk copyright and other liability, an impractical—if not impossible— 

logistical task. 

An Alternative Approach. DISH believes that an alternative solution that capitalizes on the national scale of our satellite system would achieve your objective in a 

more straightforward manner. In many instances, our spot beams cover areas larger 

than the DMAs they serve today and could provide service today to orphaned counties. From a technical perspective, we can easily offer our subscribers broadcast signals from a neighboring market if those signals are presently being delivered using 

the same spot beam as the broadcast signals for the subscriber’s ‘‘home’’ DMA. This 

type of adjacent market reform would capitalize on the fact that a nearby broadcast 

station—already on a satellite spot beam—could be provided with a flip of a switch 

to a consumer seeking in-state or regional coverage more pertinent to their lives or 

professions. It would not require dedication of finite spot capacity and would not require daily monitoring and program alteration. 

This approach could be implemented to protect the interest of the ‘‘local’’ broadcast stations. First, this adjacent market service could only be made available in the 

sliver of counties receiving out-of-state network affiliates, not the entire DMA. This 

would ensure that broadcasters remain the only source of network content for their 

in-state residents. Second, the adjacent market service would be complementary in 

that it would only be available to consumers subscribing to their ‘‘local’’ broadcasters 

first. This is, therefore, a very modest reform proposal that would have clear proconsumer results and should enhance broadcasters’ statewide and local coverage of 

news and events. Importantly, this is similar to what Congress did for four special 

test cases in 2004 in SHVERA. Congress established specific provisions to address 

a handful of the most glaring instances of consumers receiving out-of-state non-local 

networks by allowing the importation of out-of market yet in-state—broadcasters in 

New Hampshire, Vermont, Oregon, and Mississippi. Expanding this successful conVerDate Nov 24 2008 09:40 Jun 24, 2010 Jkt 054499 PO 00000 Frm 00062 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\54499.TXT SCOM1 PsN: JACKIE
59 

cept nationwide is the next logical incremental step to provide consumers with access to the programming that is local to them. 

Thus, in this instance, consumers in Clark, Cowlitz, Klickitat, Skamania, and 

Wahkiakum counties would receive Portland locals. Those consumers would then 

have the option to add on a package of Seattle locals as a complement to their Portland service. To the extent out-of-state broadcasters in Portland are effectively serving these orphaned counties today or are better situated geographically to provide 

news and emergency coverage in those orphaned counties, consumers are unlikely 

to pay a premium for access to additional broadcast stations. It is important to highlight that any additional limitations that would require programming to be blacked 

out or substituted would create substantial technical hurdles and undercut the viability of this consumer option. 

At a minimum, the Senate Commerce Committee should add study language similar to the bill that passed the House Energy and Commerce Committee last month. 

Specifically, H.R. 2994 included a provision requiring the FCC to study whether 

there was a better regulatory structure to ensuring that consumers receive in-state 

news, weather, and sports than the Nielsen Media designated market area system. 

We think this study has merit, and would welcome your support to ensure that consumers receive the local service they need and expect long-term. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. TOM UDALL TO

R. STANTON DODGE

Question 1. Broadcasters claim that there is no legal barrier that prevents satellite TV companies from providing ‘‘non duplicative’’ New Mexican TV programming to those parts of the state outside the Albuquerque-Santa Fe TV market. A 

cable TV provider, for example, broadcasts some of the Albuquerque ABC affiliate’s 

local news to New Mexican customers in the El Paso DMA. What then keeps satellite TV companies from providing such in-state television to all parts of the state? 

Answer. DISH agrees that all residents of New Mexico should have access to 

broadcasters from New Mexico. Residents of Quay county and other eastern New 

Mexico counties want to watch Albuquerque stations and should be afforded the opportunity to see that station in its entirety. 

As detailed in response to Question 4 from Senator Cantwell, DISH is prepared 

to provide the Albuquerque stations to all residents of eastern New Mexico within 

our existing spot beams if it is granted the right to provide the Albuquerque station 

in its entirety to those subscribers. DISH has no such legal rights today. To date, 

broadcasters, however, have offered only a small portion of their content, which 

would be operationally infeasible as detailed above. Blacking out content is not a 

viable option. The FCC has concluded that blacked out stations are bad for consumers, ‘‘recogniz[ing] that if a [pay TV provider] were required to delete network 

programming from a station, and the network programming subject to deletion constitutes a high percentage of the station’s programming, the [pay TV provider] 

would likely drop the entire station from carriage.’’ Implementation of the Satellite 

Home Viewer Improvement Act of 1999: Application of Network Nonduplication, 

Syndicated Exclusivity, and Sports Blackout Rules to Satellite Retransmissions of 

Broadcast Signals, FCC 00–388, ¶ 47 (2000). 

Here, 70 to 90 percent of programming on the channel would be dark. Broadcasters have conceded that DISH does not have the ability to fill in blacked out programming today. Letter from CBS and NBC Network Affiliate Associations to 

Chairman Leahy, Rockefeller et al, April 14, 2009. 

We seek your help to persuade broadcasters that the best solution for New Mexican residents is full access to their New Mexico broadcasters, just as it was for New 

Hampshire, Vermont, Mississippi, and Oregon residents in 2004. 

Question 2. Satellite television provides an important service to rural Americans 

who cannot always get cable or even broadcast television. I am concerned about 

those TV viewers in remote areas who lost their antenna TV reception due to the 

digital TV conversion. Although we do not yet know how many people live in these 

‘‘digital white spaces,’’ some TV viewers have lost their free, over-the-air television 

reception. Satellite TV is probably available to most of those affected, but satellite 

TV is not free. What are your thoughts on the role satellite TV could play in ‘‘filling 

in’’ the digital white space gaps for those who once had free analog TV but do not 

have digital TV reception. Is there any way to restore these TV households’ free TV? 

Answer. DISH shares your concern about over-the-air households. DISH was actively involved in the digital transition. Among other things, DISH sold digital-toanalog converter boxes with a recommended sales price of $40, the cost of the Federal Government’s coupon. Both our satellite and our converter box customers have 

60 

reported back to us that digital reception does not always reach areas covered by 

analog transmissions as reflected in your question. 

DISH offers households adversely affected by the digital transition a lifeline service of local broadcast stations today in markets in which DISH provides local-intolocal service. DISH also offers affordable options for households not accustomed to 

paying for their TV service, including a $24.99 DISH Family package of programming that includes local channels where available. 

While these options offer consumers affordable and flexible choices, it does not restore a ‘‘free TV’’ option. The cost of DISH equipment—both the actual receiving 

dish on the home and the set-top box receiver(s) in the home—is not inconsiderable, 

nor are the costs associated with the installation process. That said, DISH would 

be happy to work with your staff on exploring whether there is some mechanism 

by which formerly free over-the-air households could receive a subsidized lifeline 

satellite service with retransmission consent fee offsets from local broadcasters 

whose signals do cover their entire DMA or some other form of universal service 

program. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. JOHN D. ROCKEFELLER IV TO

PAUL A. KARPOWICZ

Question. Satellite television has spawned greater competition among pay television providers, especially in rural areas. This benefited consumers by giving them 

more choices and in some areas lowering prices. A key component to making satellite television attractive to consumers is the carriage of local channels. Unfortunately, in approximately 23 markets, neither DIRECTV nor DISH Network offers 

local broadcast channels. Two of those markets are in West Virginia, Parkersburg 

and Wheeling. Consumers in those communities want access to their local news, 

sports, and regional programming. 

What can be done to make sure that people throughout the country can get access 

to local broadcast stations? If there is no obligation or incentive to serve all 210 

markets would DIRECTV or DISH Network do so and by what date? What steps 

can broadcasters take to encourage or incentivize the extension of local service to 

unserved markets? 

Answer. Mr. Chairman, thank you for the question. As I stated during the hearing, local broadcasters strongly support the extension of local-into-local service in all 

210 markets. Localism is a beacon of Congressional communications policy. In 1999, 

Congress allowed satellite companies to retransmit a local broadcast network signal 

back into the same local market from where it originated. This was a ‘‘win-win’’ for 

all, as local residents received imperative news, weather and sports programming 

they desired and DBS providers scored a windfall of new subscribers effectively leveling the playing field with larger cable systems. However, when SHVIA was adopted, the law did not require DBS companies to provide this service, creating a system 

where smaller communities are often disenfranchised. As you know, a number of 

different legislative proposals have been introduced as we undertake the reauthorization of SHVERA to remedy this problem. In the House, both the Energy and 

Commerce and Judiciary Committee’s included language in their bills that would facilitate local-into-local carriage in all 210 DMAs. While NAB did not oppose these 

efforts, numerous concerns still lie in the details of how this potential solution 

would work. Furthermore, the Senate Judiciary bill (S. 1670), allows satellite carriers, using their local compulsory copyright license, to import in short markets the 

missing network from an adjacent market. Thus, DISH, which lost its distant signal 

copyright license, can use this provision to deliver local-into-local service to all 210 

markets. This approach facilitates, without mandating, the extension of local-intolocal service into all markets. Moreover, Congressman Bart Stupak (MI) introduced 

legislation (H.R. 927) in the House that would mandate local-into-local service in all 

210 markets. 

If there was no obligation or incentive to serve all 210 DMAs with local programming, I do not believe DIRECTV or DISH Network would make that investment. 

DIRECTV and DISH Network have repeatedly claimed that capacity and economic 

constraints severely limit their ability to offer local-into-local service to more than 

a small number of markets. A few years back, they said unless Congress allowed 

the two companies to merge, ‘‘the most markets that each company would serve 

with local channels as a standalone provider, both for technical and economic reasons, would be about 50 to 70.’’ Today, the satellite carriers no longer claim, seriously, that providing local-into-local service is technically impossible. They say it is 

expensive. Under your leadership, local broadcasters successfully transitioned to 

digital broadcasting in June. During the course of this massive transition, local staVerDate Nov 24 2008 09:40 Jun 24, 2010 Jkt 054499 PO 00000 Frm 00064 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\54499.TXT SCOM1 PsN: JACKIE
61 

tions spent billions of dollars upgrading facilities and informing the general public. 

While there has been very little economic return on that investment, those investments were in the public interest. I believe the satellite industry’s investment in 

providing local-into-local service to all American’s would also be in the public interest. 

Again, local broadcasters have long advocated for local communities to be served 

by their local television station. It is not lost on us that residents of the northern 

panhandle of West Virginia are better served by WTRF in Wheeling as opposed to 

distant signals from Denver or New York. 

RESPONSE TO WRITTEN QUESTIONS SUBMITTED BY HON. TOM UDALL TO

PAUL A. KARPOWICZ

Question 1. You claim that there is no legal barrier that prevents satellite TV 

companies from providing ‘‘non duplicative’’ New Mexican TV programming to those 

parts of the state outside the Albuquerque-Santa Fe TV market. You also note that 

one Albuquerque station would potentially allow carriage of its non-duplicative programming by satellite companies to orphan counties in New Mexico. Are there any 

examples where satellite companies provide such in-state, non duplicative TV programming to viewers in ‘‘orphan counties?’’ If so, why then is this not available to 

TV viewers in affected areas of New Mexico? If not, how then is this option a viable 

way to bring in-state TV to ‘‘orphan’’ counties? 

Answer. Senator Udall, thank you for the opportunity to answer your questions. 

To my knowledge, satellite companies have not been willing to provide in-state nonduplicative television programming to viewers in any so-called ‘‘orphan’’ counties. I 

respectfully submit that the mere fact that no DBS operator is offering such a service does not mean that it is not a viable option to do so. Rather, the failure of DBS 

to offer such a service stems from an unwillingness to devote the necessary capacity 

and financial resources which the carriers, in fact, have. DIRECTV and DISH are 

among the largest multichannel video program providers in the country. 

DIRECTV has given three reasons for refusing to provide in-state, non-duplicative 

programming from a New Mexico station to New Mexico residents located in an outof-state DMA. None is a valid reason for not providing their service. 

First, DIRECTV claims that stations, which have already provided written consent to carry their local programming throughout the state for free, nevertheless 

lack the necessary copyright licenses to authorize such consent. That assertion is 

false. My stations, in various markets in other states and the local television stations in New Mexico, as well, have secured the necessary copyright licenses to provide satellite carriers (as well as cable companies) local news, weather, public service, and political programming on a state-wide basis. Notwithstanding DIRECTV’s 

assertions, this is not an issue and is not an impediment to satellite delivery of this 

programming. 

Second, DIRECTV asserts that none of its subscribers have requested receiving 

service consisting only of in-state local programming. On one level, this is not hard 

to understand since DIRECTV has never offered such a service. Significantly, such 

a service is being offered by Comcast Cable in New Mexico, which presumably would 

not devote its resources to doing so if New Mexico subscribers in these counties had 

no interest in receiving this purely local, in-state programming service. 

Third, DIRECTV complains that requiring it to strip out duplicative programs 

would be ‘‘far more expensive’’ than retransmitting a station’s entire signal that includes duplicative programming, and would require DIRECTV to reconfigure its set 

top boxes. This, it seems to me, is the essence of the question you pose. It is simply 

not the case that providing only the non-duplicative programming to orphan counties is not ‘‘viable’’ for DBS. Rather, it is a matter of money and allocation of resources and technology. In this regard, it is significant to note that on page 4 of 

the June 22, 2009 edition of Communications Daily, DISH and DIRECTV announced that each would soon have the technical capability to insert local commercials for advertisers in markets where they were providing local to local service. 

Surely, if DIRECTV and DISH can insert local commercials, they can insert local 

news, weather, political, public service announcements, local emergency announcements, and public service programming from in-state stations. Ironically, the satellite industry strongly opposed an effort by the FCC to require satellite carriers to 

provide local public safety and emergency announcements. 

Moreover, satellite carriers also offer pay-per-view services offering sexually explicit and other programming requiring sophisticated addressable set top boxes. If 

satellite carriers can provide addressable boxes and the technology necessary to provide for sexually explicit content, why can they not provide the same technology to 

62 

enable subscribers to receive local, in-state news, public service, and local emergency programming and announcements broadcast by in-state stations? 

Clearly, DBS can offer non-duplicative in-state programming from a New Mexico 

station to orphan counties. 

Question 2. The last time SHVERA was reauthorized, a handful of exemptions 

were made for states with the same DMA problem as New Mexico. How were consumers harmed by these limited exemptions allowing satellite companies to provide 

secondary transmissions of in-state TV signals to ‘‘orphan counties’’? 

Answer. Senator, to answer your first question the ‘‘exemptions’’ made in 2004 in 

SHVERA ostensibly affected four states: New Hampshire, Vermont, Mississippi, and 

Oregon. To my knowledge the Oregon provision has not been utilized. Accordingly, 

there are, effectively, ‘‘exemptions’’ for just three states. 

The 2004 Act did not deprive the stations whose signals were subject to export 

into an adjacent market of the right to give or withhold their retransmission consent. Nor did the Act in the three affected markets apply to cable. In short, the arrangements for satellite carriage were worked out voluntarily by the parties. 

In addition, because the ‘‘exemptions’’ were enacted as part of the distant network 

signal license in Section 119 of the Copyright Act, DISH Network was prohibited 

from utilizing the ‘‘exemptions’’ beginning December 1, 2006, when it was permanently enjoined by a Federal court from use of the distant network signal compulsory license. Accordingly, to our knowledge only DIRECTV is utilizing the exceptions and the service is provided to only a few homes in each local market. 

In two of the markets, the out-of-market network station being imported is owned 

by the same company that owned the in-market station affiliated with that network—thus, the company’s stations simply exchanged viewers. The result is that 

the 2004 act’s provisions are quite limited in scope. 

If Congress should allow pay TV companies to retransmit duplicating national entertainment and sports programming from distant stations in other markets without 

obtaining the consent of the copyright holder or the stations whose signals are being 

retransmitted, local stations and local television broadcast service will be harmed 

in several ways. First, it will fragment local viewing of the same national programming—depriving stations of critical local advertising revenue. Second, it will deprive 

local stations of the ability to negotiate compensatory retransmission consent agreements with cable and satellite companies. Cable and satellite will not pay local stations retransmission consent fees for programs it can get without paying retrans 

fees at a government-subsidized copyright fee. Because the ‘‘exemptions’’ would only 

apply to broadcast programming—not to cable and satellite network programming 

such as ESPN, USA, HBO, etc.—they could result in national broadcast networks, 

program suppliers, and the sports leagues withdrawing their best programming 

from local, free, over-the-air television stations and placing them on pay services for 

more money on an exclusive basis in each local market. 

Consumers and viewers would then lose quality free, over-the-air broadcast programming, as local stations could no longer provide viewers with local news, weather, sports, and public interest programming. 

Without competition from local stations, cable and satellite companies would be 

able to increase and raise their pay TV rates for the same programs viewers had 

previously been able to see for free from their local stations—further harming consumers. 

Question 2a. Would further exemptions that apply to small areas truly destroy the 

entire broadcast TV business model nationwide? 

Answer. Yes, over time. Local stations buy their national entertainment and 

sports programming and compete in a fiercely competitive program market for their 

programming with cable and satellite. Why would the government want to give that 

same programming to cable and satellite at a government-set, highly subsidized 

copyright rate or deprive the creator of the programs of the right to pick its local 

distributor? What incentive would broadcast stations have to develop programming 

if the government gives it to pay cable and pay satellite at a subsidized rate to compete head-to-head with the stations that produced it? 

The interest in having the local news programming of in-state television stations 

made available for cable and satellite distribution throughout a state is clearly understandable. We support that objective. Fortunately, legislation to achieve that objective is not necessary; it can be done now without any change in the law. In fact, 

it is being done now in various states and television markets—including in New 

Mexico—and it could be done in other parts of New Mexico and in every state if 

DIRECTV and DISH were only willing to do so. 

Existing Federal copyright and regulatory law is not an impediment to the importation by satellite carriers and cable systems of non-duplicating local news, informaVerDate Nov 24 2008 09:40 Jun 24, 2010 Jkt 054499 PO 00000 Frm 00066 Fmt 6601 Sfmt 6621 S:\WPSHR\GPO\DOCS\54499.TXT SCOM1 PsN: JACKIE
63 

* Notice of Inquiry and Notice of Proposed Rule Making re Program Exclusivity FCC Rcd 2393 

(1987) at ¶ 62. 

tion, or sports programming from stations in distant markets. Local stations own 

the copyright for their local news and are in a position to allow—and do allow— 

cable and satellite companies to export their local news, weather, sports, public safety, and informational programming into distant markets. For example, Comcast imports the local news programming of KOAT-TV, Albuquerque, New Mexico, into Las 

Cruces, New Mexico, which is located in the El Paso, Texas, TV market. And there 

are numerous other examples, including: cable systems in Virginia, North Carolina, 

Southern Colorado, Tennessee and Palm Springs California that provide in-state 

programming to communities located out-of-state DMAs. 

DIRECTV and DISH, of course, could easily provide the same service. Congress 

should be asking cable and satellite to do more of this—not give them a free copyright to import duplicating national entertainment and sports programming already 

available to viewers for free—from local stations. 

Cable and satellite companies are asking Congress to enlarge the geographic 

scope of their existing government granted statutory compulsory copyright licenses 

to allow them to import the very same national, duplicating network, syndicated, 

and entertainment and sports programming from distant stations that local television stations are televising in their markets and for which they have paid large 

sums of money, in a competitive open market, for the exclusive right to do so. 

The competitive strategy of satellite and cable companies in urging Congress to 

enact market modification legislation is anti-competitive. Cable and satellite companies compete head to head for viewers and advertising dollars with local television 

stations. It is simply impossible for local stations to compete when they must provide their satellite competitors with a government subsidized copyright license and 

free retransmission consent to televise from a distant market station the most popular entertainment and sports programming which DBS in turn, can resell to their 

subscribers. 

If the broadcast networks, program studios, and sports leagues are deprived by 

Congress of the ability to control the reasonable terms for territorial and exclusive 

licensing of their copyrighted works when televised for free over the air by local television stations, they will simply withdraw their entertainment and sports programming from the free, over-the-air television broadcast service and place it, on a less 

regulated, less restricted cable or satellite video distribution platform where they 

can maintain control over the territorial scope of the copyright license and the terms 

of program exclusivity. 

Market modification legislation will, in short, relegate the free television broadcast 

service to a third- and fourth-run program service, to the detriment of local viewers 

and, in particular, those viewers who cannot afford a paid subscription television 

service. 

Without the ability to contract in a competitive market for program copyright exclusivity, local television stations will lose local viewers and, in turn, essential advertising revenue. They will also lose the ability to negotiate meaningful arrangements with cable and satellite companies for carriage of their signals. Cable and 

satellite companies will be able simply to by-pass local stations if Congress allows 

them to offer local viewers the same national network, syndicated, entertainment, 

and sports programming from distant stations that is televised by local stations. 

The FCC, under various administrations, has examined the public interest implications of broadcast program exclusivity for local, over-the-air television stations 

and has concluded that the loss of program exclusivity would place local, free, overthe-air television stations ‘‘at a competitive disadvantage relative to their rivals who 

can enforce exclusive contracts’’ and deny consumers the ‘‘benefits of full and fair 

competition and higher quality and more diverse programming.’’*

No reasonable public interest justification can be made for importing, on a paid 

subscription basis from another distant station, the very same duplicating entertainment and sports programming available to local viewers free from a local, over-theair television station. Obviously, the importation of duplicating programming does 

not contribute to program diversity. It would only serve the self-serving financial 

and anticompetitive interests of satellite and cable companies. 

Now is not the time to financially undermine the efforts of local television stations 

to provide free local news, weather, public affairs, public service, political, and public safety information programming. 

Question 3. You state in your testimony that offering duplicative TV signals in 

even a handful of ‘‘orphan’’ counties would harm consumers since broadcasters 

would no longer make available their most desirable TV programs to over-the-air 

64 

TV viewers. However, broadcasters already provide duplicative programming to 

some TV viewers in these orphan counties via TV station websites and Hulu. If 

those with Internet access in orphan counties can already watch in-state TV programming online, why should they not be allowed to watch this same programming 

via satellite television? 

Answer. Providing viewers in orphan counties with the opportunity to view isolated network programs (rather than the entire network schedule) on Internet 

websites is substantially different from making the full network schedule available 

from a distant network station via satellite for simultaneous viewing on conventional television sets. 

First, in the case of satellite delivery, the duplication would be simultaneous or, 

worse, with time zone differences, could precede broadcast of the programming by 

local stations. The vast majority of viewing to significant prime time network programming such as ‘‘Desperate Housewives’’ is ‘‘live.’’ That is where local stations 

make most of their advertising revenue—or would lose it if viewing of ‘‘Desperate 

Housewives,’’ for example, on Sunday night was to a distant duplicating network 

station. The amount of viewing of such programming on Websites is not nearly as 

significant as when it is being aired over the network and unlike satellite delivered 

distant signals which are live. Because Internet distribution is subsequent to a program being aired on the local affiliate, the two types of distribution and the threat 

they pose to local stations simply is not comparable. 

Second, the distribution of network programming via Internet venues is a function 

of private marketplace contractual negotiations among the networks, program suppliers and often the affiliates. Some of the TV Website distributors involve revenue 

sharing with local affiliates from Internet viewing. Under these arrangements, it is 

the private copyright holders of these program rights and their licensees who work 

out the distribution of the programs. In fact, some of these Internet websites instantaneously transfer the user to the local, in-market network station’s website, so the 

viewer is actually watching the program from the website of the network’s local affiliate—along with the local affiliated station’s own commercials. This viewing is accretive to the local station’s over-the-air viewing—not dilutive as would be the case 

with the importation of a distant duplicating network station. 

On the other hand, program distribution by satellite of a distant signal is accomplished by means of a government statutory compulsory copyright license, depriving 

copyright holders of the ability to license their creative works. Under the government’s compulsory license, the program creator and its licensees only control and 

exploit the program to the extent they are permitted by the government to do so. 

If the government interferes with the copyrighted licensing of programs on broadcast television stations, copyright owners, studios, and sports leagues will simply divert their marquee programs to less regulated Pay TV services—which, in turn, will 

be a disservice not only to local, free, over-the-air TV stations, but to viewers and 

consumers who depend on their local broadcast stations for quality entertainment, 

sports, national and local news, and emergency information. 

RESPONSE TO WRITTEN QUESTION SUBMITTED BY HON. JOHN D. ROCKEFELLER IV TO

LONNA THOMPSON

Question. Far too much of the programming offered to consumers is designed to 

entertain on a base level. It does not enlighten, educate, or elevate the viewer. Instead, I see a coarsening of society with media in the vanguard. Public television 

is one of the few resources for programming that educates and shares the best of 

our culture. Programming such as Ken Burns’ documentary on the National Parks 

expose viewers to the grandeur and history of America. Such programming however 

is best viewed in high-definition (HD) format. I am concerned when satellite providers choose to offer ‘‘Dancing with the Stars’’ in HD format and not ‘‘The War.’’ 

I understand that DISH and the public television stations are in discussions over 

the carriage of local HD programming as well as mechanisms to provider subscribers with access to public television multicasting channels. What is the status 

of those negotiations? If no agreement is reached, what can Congress do to encourage consumer access to such programming? 

Answer. Public television has worked for a number of years to reach a comprehensive carriage deal with Dish Network. In that time, APTS, on behalf of the Nation’s 

local public television stations, has worked consistently in good faith to reach a deal 

that brings the full array of local stations’ programming to Dish’s subscribers, while 

recognizing the capacity concerns of Dish Network. This is something that we know 

can be accomplished, as is evidenced by our prior carriage agreements with 

DIRECTV, NCTA, ACA and Verizon. Recognizing that each provider has separate 

65 

capacity and technological constraints, each of these past agreements have been individually crafted to reflect these realities, while ensuring that viewers have access 

to the highest quality of locally produced digital content. 

Unfortunately, after years of trying to conclude a similar agreement with Dish, 

as of this date, no such agreement has yet been reached. Dish, by their own record 

is providing local HD service in over 150 markets, yet they have refused to carry 

any local public television stations except in Alaska and Hawaii, where they are legally obligated to do so. Absent a private carriage agreement, we call on Congress 

to help us end this discriminatory practice. 

All efforts to finalize carriage agreements with Dish have ended with their refusal 

to accept a deal that does not contain a national HD feed of public broadcasting programming in exchange a specific accelerated roll-out of local-into-local HD that exceeds the FCC rules. 

A national HD feed threatens the foundation of local public television stations. 

This type of feed in markets where there is no local HD carriage would compete 

against local stations’ programming and would erode valuable local pledge fundraising—undercutting stations and ultimately destroying the principle of localism. 

Without an agreement with Dish, we are asking Congress to ensure that all citizens are able to have access to their local public television stations’ HD programming—regardless of how they receive their television signals. 

During the House Energy and Commerce Committee mark-up of its version of 

SHVERA reauthorization legislation, Representative Eshoo offered an amendment 

that mandated the carriage of local public television stations’ HD signals. The 

amendment requires Dish to carry local public television stations’ HD signals in 50 

percent of their local HD markets within a year and the remaining 50 percent in 

2 years. Additionally, if Dish goes into new markets in local HD after the bill is 

enacted, they have to carry the local public television station on a prospective basis. 

If an agreement can be reached before the legislation is signed into law, the amendment does not take effect. 

As the Senate Commerce Committee considers its version of SHVERA reauthorization, we are asking that the Committee consider adopting similar language in its 

bill. Given the fact that we have not been able to finalize a deal at this point, we 

feel we have no other option than to ask that this language be included in the bill. 

In the meantime, APTS will continue to try to reach a private agreement with Dish. 

We continue to believe that private negotiations are in the best interest of all parties, including Congress. 

Dish Network’s nearly 14 million subscribers deserve access to the highest quality 

of local programming that local public television stations are producing. Congress 

and the American public have invested in this programming. From major productions like The War, to local arts, education and public affairs programming, consumers deserve access to the full breadth of programming and services offered by 

their local public television stations. 

Public television remains committed to doing everything we can to bring these 

services to the American public. We will continue to negotiate, as we have all along, 

in good faith with Dish Network. However, at the end of the day, absent a private 

agreement, we cannot miss this opportunity of SHVERA reauthorization to ask Congress for help in addressing this long standing practice of discrimination that prevents Dish subscribers from accessing the highest quality programming being offered by local public television stations nationwide. 

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