Satellite TV Goes Local
The nation's leading satellite TV companies are getting a running start on the holiday season, bolstered by new legislation that lets them beam local channels into subscribers' homes.
The satellite provision, included in the massive budget package that President Clinton signed into law Monday, will enable satellite customers to watch local TV news, weather and sports broadcasts, just as cable owners do.
Federal regulators hope the legislation will boost competition to the cable industry and drive down prices.
"I expect that this law will keep cable rates and services in check by making satellite a real choice for customers," said Bill Kennard, chairman of the Federal Communications Commission.
Almost immediately, top satellite companies began offering local CBS, ABC, NBC and Fox channels in some of their largest markets. The legislation lets satellite companies begin to provide local signals right away, allowing them to tap into the holiday gift-buying spree.
Once they start offering local channels, satellite TV providers will have six months to hammer out required retransmission agreements with the networks. By 2002, companies that carry any local broadcast stations in a market would have to carry all of them.
Littleton, Colorado-based EchoStar, a big player in the industry, launched local channel service Monday in 13 markets, among them New York, Los Angeles, Chicago, San Francisco, Denver, Miami and Washington.
Company officials spent part of Monday at a consumer electronics store in Denver, where they watched customers sign up for the service.
"It's kind of like the president put the pen down and we started selling," said Judianne Atencio, EchoStar spokeswoman. "This has been the barrier to entry; not only the last one, but the biggest one."
The company said it plans to offer local channels in more than 30 markets within the next four months, which will enable it to reach 60 percent of U.S. households.
DirecTV, the nation's largest satellite company, introduced local signals Monday for customers in its New York and Los Angeles markets. In the coming days, it will add five more cities and expects to enter around 25 of the top markets by the end of January. That would offer a satellite package with local channels to 50 million households.
Local channels will cost $5.99 a month, on top of other services customers select. DirecTV satellite packages start at $14.99, but the average subscriber spends about $58, company spokesman Bob Marsocci said. This figure also reflects consumers who watch pay-per-view movies and televised events, he said.
EchoStar is charging $4.99 a month for its local channel package. The average customer bill is $40 monthly, EchoStar's Atencio said.
The legislation is intended to boost satellite's position as a rival to cable by allowing companies to beam local broadcast signals to customers using either pizza-sized satellite dishes or big "backyard" dishes. Cmpanies were barred previously from doing this.