RS20425 -- Satellite Television: Historical Information on SHVIA and LOCAL Updated December 15, 2004 The 1999 Satellite Home Viewer Improvement Act (1) (SHVIA) expands on and extends some provisions of the 1988Satellite Home Viewer Act (SHVA), as amended, regarding consumer reception of television signals via satellitedishes. Two major companies, EchoStar and DirecTV (a subsidiary of News Corp.), offer satellite televisionservicestoday through their direct broadcast satellite (DBS) systems. EchoStar's service is called Dish TV. DirecTV'sprogramming is also distributed through the National Rural Telecommunications Cooperative (NRTC) and byPegasusCommunications. Another company, Rainbow DBS (a subsidiary of Cablevision) offers a comparatively smallnumber of satellite channels though a service called Voom. Historical information on SHVA and the issuesCongressfaced in revising it are available in CRS Report 98-942. The 1999 law, SHVIA, provides consumers greater access to broadcast network television programming via theirsatellite dishes. The original law permitted rebroadcast of distant network signals to consumers wholived outside the"Grade B contour" of broadcast network affiliate stations. The 1999 law continues to permit that activity, but also allows satellite companies to rebroadcast local network signals back into the same localmarket area. They are notrequired to do so, however. Local versus Distant Network Signals. The distinction between local and distant network signals is important to understanding SHVIA. A local signal is received within a networktelevision affiliate's local area. A distant signal is from elsewhere in the country. If a consumer lives in Denver andisreceiving a signal from a Denver network affiliate, that is a local signal. If a consumer lives in West Virginia andisreceiving a signal from that Denver network affiliate via satellite, it is a distant network signal. Who May Receive Distant Network Signals. The original SHVA established the "Grade B" (2) contour as thedetermining factor as to whether a particular household was eligible toreceive distant network signals via satellite. Consumers living inside the Grade B contour were not allowed toreceivesuch signals while those outside the contour (in so-called "white areas") were allowed to receive them. Somesatellitecompanies transmitted distant network signals to consumers inside Grade B contours, however, leading to courtchallenges by the networks to try to force the satellite companies to obey the law. Based on decisions by a Miamijudge in 1998, over 2 million consumers reportedly had, or were scheduled to have, distant network signalsterminatedby their satellite companies. EchoStar appealed the decision to the Supreme Court in 2002, which declined to hearthecase. In the 1999 law, Congress "grandfathered" consumers who had been receiving distant network signals illegally as longas they could not receive a signal of "Grade A" 2 intensity. For new subscribers, however, the originalrules apply. Toreceive distant network signals, new subscribers must not be able to receive a signal of Grade B intensity asdetermined using the Individual Location Longely-Rice (ILLR) method for predicting signal strength establishedbythe Federal Communications Commission (FCC) in February 1999. SHVIA directed the FCC to review whethertheGrade B standard should still be used for the purposes of SHVIA. The FCC concluded it should (FCC-016, ETDocket No. 00-90). Consumers who believe they are not receiving a Grade A or Grade B signal despite predictive models showing thatthey are may seek a waiver to receive distant network signals via satellite. Consumers must apply to their satellitecompany for the waiver. The satellite company forwards the request to the local network affiliate. There is no timelimit for the satellite company to take that action. Once the request is received, the local affiliate has 30 days todecidewhether or not to grant the waiver. If the waiver is granted, or if no action is taken by the affiliate, the consumermaythen receive distant network signals from the satellite company. If a waiver is denied, consumers may then requestasignal intensity test from their satellite company. The satellite company and the local affiliate are required jointlytochoose someone to conduct the test. The consumer does not bear the cost of the test. Instead, the "loser" pays(eitherthe satellite company or the affiliate), or the satellite company and the affiliate may choose some other method ofpaying the costs as long as the consumer does not pay. Exceptions were made for recreational vehicles (as definedbyDepartment of Housing and Urban Development regulations), commercial trucks (as defined by Department ofTransportation regulations), and for consumers using large "C-band" satellite dishes. The RV or commercial truckcannot be a fixed dwelling. In summary, the following consumers may receive distant network signals until December 31, 2004, the period forwhich the compulsory license (see below) was extended: if they do not receive a signal of Grade B intensity from the local affiliate of a particular network; if their satellite dish is installed on an RV or commercial truck, or if they had been receiving distant network signals illegally and those signals were terminated orscheduled to be terminated under the 1998 Miami court rulings, and they do not receive a signal ofGrade A intensityfrom the local affiliate of the network. Consumers using "C-band" dishes are not subject to the five year limitation. They may receive distant network signalsthey were receiving before October 31, 1999 indefinitely. Who May Receive Local Signals. SHVIA permits DBS companiesto provide "local-into-local" service, where a local broadcast TV signal is transmitted up to the satellite and backdown to consumers in that same "designated market area" (DMA). The law does not require the DBScompanies toprovide this service. There is considerable confusion on this point, stemming, in part, from the fact the lawalsocreated a " must carry " provision. Under must carry, each DBS company must provide all local broadcast stations ina particular market if it provides any local station in that market. This does not mean that DBScompanies must carrylocal broadcast programming throughout the country . Instead, if a DBS provider chooses to provide local broadcastprogramming in a market, it must carry all local TV stations in that market that wish to be carried (with exceptionsforduplicative programing and educational stations). The DBS companies still may choose not to providelocal-into-local service in any particular market. Cable companies already were subject to must carry rules (depending on the size of the cable system). The must carryprovisions for DBS went into effect on January 1, 2002. (3) The DBS companies oppose the must carry requirement(see below) and unsuccessfully attempted to overturn it in court. According to their respective websites, as of October 2004, EchoStar offered local-into-local in 152 markets andDirecTV in 106 markets. Both plan to add more markets as additional capacity becomes available. There are 210designated market areas (DMAs) in the United States as identified by Nielsen Media Research, meaning that manysmaller communities do not receive local signals via satellite. DMAs differ in size, so the number of DMAs servedisnot necessarily indicative of the percentage of the population able to receive local-into-local. When EchoStar passedthe 100 DMA mark, it reported that 83% of the population could receive its local-into-local service. DirecTVassertsthat it will provide local-into-local in at least 130 DMAs by the end of 2004, which it says represents 92% of TVhouseholds. Congress passed the LOCAL Act (see below) in 2000 to help ensure that small and rural areas thatcannotobtain local-into-local service from EchoStar or DirecTV can receive local television via other satellite or terrestrialtechnologies. Compulsory Copyright License. Another issue regarding satellite retransmission of television programming concerns compensation to those who own the copyright on theprogramming. Under both the 1988 and 1999 laws, satellite carriers were given a compulsory copyright license forrestransmitting distant network and superstation signals. That means that the copyright owners must make thatprogramming available to the satellite companies at government-set prices. (4) Without such a license, the satellitecompanies would have to negotiate with each copyright owner individually. The 1999 law extended the compulsorylicense for distant network signals for five years, until December 31, 2004. The 108th Congress isconsidering whetherto extend it further, and whether to change how the prices are set (see CRS Report RS21768 ). For retransmittinglocalsignals, however, Congress gave the satellite companies a royalty-free permanent compulsory copyright license. Cable has a permanent compulsory copyright license. (Copyright compensation is separate from businessarrangements negotiated to obtain retransmission consent, which is explained in footnote 3 below.)