Dish Urges Senate to Modernize Satellite Legislation

[Scott Greczkowski]

DISH Network EVP and General Counsel Urges Senate Subcommittee ​

to Modernize Satellite Legislation​

ENGLEWOOD, Colo. – Oct. 7, 2009 – Today, R. Stanton Dodge, Executive Vice President and General Counsel of DISH Network, testified on the Reauthorization of the Satellite Home Viewer Extension and Reauthorization Act of 2004 before the U.S. Senate Committee on Commerce, Science and Transportation, Subcommittee on Communications, Technology and the Internet.

Dodge stated, “We are hopeful that the reauthorization process this year will modernize an outdated statute as well as provide the incentive to achieve a national policy goal: making local TV service available to consumers in all 210 markets.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.”

Dodge’s testimony focused on the challenges of providing consumers with access to all local channels, particularly the substantial cost. Though DISH Network has launched local channels in 98 percent of households nationwide in less than 10 years, Dodge stated the job is not yet complete, “until all consumers have the opportunity to view their local channels.”

Dodge continued, “the bill voted out of Senate Judiciary Committee two weeks ago is a good first step but could have unintended consequences. Other pay TV providers pay either a retransmission fee to the local broadcast station or a copyright royalty payment. Any requirement to pay double compensation to carry the same station would create an unintended financial disincentive to provide these signals.”

“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. That study should examine the current compensation regime and whether it is truly market-based and serves consumers.”

 

[Scott Greczkowski]

Here is his testimony...

​

Testimony of
Stanton Dodge
Executive Vice President and General Counsel of DISH Network L.L.C.
On the
Reauthorization of the Satellite Home Viewer Extension and Reauthorization Act of 2004
Before the
Committee on Commerce, Science, and Transportation
Subcommittee on Communications, Technology, and the Internet
United States Senate
October 7, 2009
​

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 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 spot-beam 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 two 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 low-power stations that may offer valuable content within the local
market. 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.

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 towards 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 towards 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.

 

[Fitzie]

Scott--nice post. Thanks.

Fitzie

 

[riffjim4069]

Dish could start by modernizing their HD-Lite signals!

 

[peaked]

Good post. "...cutting edge spotbeam technology..." Sell it, brother! Seriously, thanks for letting us know what's going on at the top.

 

[buckeye927]

As someone living in one of those 29 unserved areas, Marietta (OH) - Parkersburg (WV), this is very exciting news. I have long argued that "nearby" regional networks should be made available to unserved markets. This dma only has an NBC affiliate, so it would be awesome to get the remaining networks out of Columbus (OH) or at the very worst Charleston/Huntington (WV).

 

[LocutusOfBorg]

It isn't necessary for any satellite provider to provide local channels when a yagi on the roof will get the job done. If there are covenents prohibiting the yagi (or "flat panel") antenna then the government should step in and forbid such restrictions by HOA's and covenents. It should also be noted that not all broadcasters are in all areas. In my case, there's no local FOX or NBC affiliate. Also, they should change the SHVA so that we're not limited to local stations and be allowed to subscribe to broadcast stations in other markets. If the local stations can't run their business to keep local people viewing their broadcast then they should go out of business.

 

[chhc84]

It isn't necessary for any satellite provider to provide local channels when a yagi on the roof will get the job done. If there are covenents prohibiting the yagi (or "flat panel") antenna then the government should step in and forbid such restrictions by HOA's and covenents. It should also be noted that not all broadcasters are in all areas. In my case, there's no local FOX or NBC affiliate. Also, they should change the SHVA so that we're not limited to local stations and be allowed to subscribe to broadcast stations in other markets. If the local stations can't run their business to keep local people viewing their broadcast then they should go out of business.

WRONG !!!!!!!!!!!!!!!!!!!!!!!! not everybody with a yagi on the roof can get their local channels, your ignorance to that fact is sickening.

digital signals do not go as far as the old superior analog signal (not talking about the resolution - i am talking about the method to transfer the signal)

 

[LocutusOfBorg]

WRONG !!!!!!!!!!!!!!!!!!!!!!!! not everybody with a yagi on the roof can get their local channels, your ignorance to that fact is sickening.

digital signals do not go as far as the old superior analog signal (not talking about the resolution - i am talking about the method to transfer the signal)

Then it isn't local programming, is it? BTW, do you have to be so inflammatory or do you just like being a jerk or immature?

 

[Jim S.]

Hey, he's not the only person who's sick and tired of seeing people with the attitude of "why would anybody pay for something you can get with an antenna".

And by the way, according to the geniuses at Nielsen, who have (illegally in my opinion) been allowed to dictate copyright law, EVERYBODY supposedly has local channels.

 

[psdstu]

Several years ago I used to be able to get CBS out of Dothan AL on DISH even though I am in the Panama City FL DMA which has no CBS station.

Like many others DISH pulled the CBS signal from us for some reason (which I never fully understood) even though it's still available on the local Comcast Cable service.

Never really understood why Comcast can offer CBS from both Dothan AL, and Tallahassee FL but DISH cannot?

Perhaps in the future DISH will be able to once again provide a CBS local to those of us in the Panama City FL DMA.

 

[mongo999]

In regard to the 'locals' where I live, I am presented with a kind of mess that I am sure Congress did not intentionally create, but did nonetheless.

I reside in Massachusetts; I pay my taxes here too. My local, state and national representatives all come from Massachusetts, so most political coverage of interest to me originates in Boston and so does all political advertising of interest (at least on a state or federal level).

Unfortunately, Nielsen and Congress both think I reside in Rhode Island.

Why do I say that? Because, even though the 'locals' I have always considered to be *my* locals come from Boston (in Massachusetts), when it comes to getting them via DBS, I have no choice but to get Providence stations which have none of the kind of content I mentioned above.

An expensive OTA antenna setup or Comcast cable TV subscription can provide me with my choice of both Boston *and* Providence 'locals', but neither Dish nor DirecTV can legally offer me the same choice.

What adds even more salt in the wound is that, instead of being able to receive our nationally-acclaimed WGBH/WGBX PBS affiliate, all I can get is some station out of Connecticut!!!

Is that really what ANYONE had in mind when they set up these stupid guidelines and boundaries? I think not.

Things would have been much simpler and sensible if 'local' was defined as any station that could be received over the air by an antenna, and not any other definition. Why didn't anyone think of that, way back when this mess was created? If they did, what sane person would ever have picked the mess we have now over that much more simple, elegant and fair definition?

Or, if forced to pick just one market, then let me pick it, for crying out loud!

My first post and 2c. YMMV

 

[david_jr]

In regard to the 'locals' where I live, I am presented with a kind of mess that I am sure Congress did not intentionally create, but did nonetheless.

I reside in Massachusetts; I pay my taxes here too. My local, state and national representatives all come from Massachusetts, so most political coverage of interest to me originates in Boston and so does all political advertising of interest (at least on a state or federal level).

Unfortunately, Nielsen and Congress both think I reside in Rhode Island.

Why do I say that? Because, even though the 'locals' I have always considered to be *my* locals come from Boston (in Massachusetts), when it comes to getting them via DBS, I have no choice but to get Providence stations which have none of the kind of content I mentioned above.

An expensive OTA antenna setup or Comcast cable TV subscription can provide me with my choice of both Boston *and* Providence 'locals', but neither Dish nor DirecTV can legally offer me the same choice.

What adds even more salt in the wound is that, instead of being able to receive our nationally-acclaimed WGBH/WGBX PBS affiliate, all I can get is some station out of Connecticut!!!

Is that really what ANYONE had in mind when they set up these stupid guidelines and boundaries? I think not.

Things would have been much simpler and sensible if 'local' was defined as any station that could be received over the air by an antenna, and not any other definition. Why didn't anyone think of that, way back when this mess was created? If they did, what sane person would ever have picked the mess we have now over that much more simple, elegant and fair definition?

Or, if forced to pick just one market, then let me pick it, for crying out loud!

My first post and 2c. YMMV

First of all welcome aboard.


I also live in MA and get no stations that originate in the Commonwealth. I sent my congressman the following email:

Congressman Olver,

I understand that a bill has been introduced by Senator Leahy to modernize satellite television services. As I'm sure you are well aware, many of your constituents in Western Mass and particularly in the Berkshires, have no other source of receiving reliable television signals except through the use of a satellite dish. Congressman Olver I would like to bring to your attention the fact that under the current law, which I believe is referred to as SHVERA, Berkshire County satellite dish customers are deprived of receiving any local programming sourced from Massachusetts. Being in the Albany, NY DMA, we are deprived of receiving anything other than token tidbits of Massachusetts news from the Albany stations and are deprived of the ability to watch the New England Patriots on Network TV during the NFL Season, due to the Albany stations showing the New York teams. As I'm sure you are aware, cable customers in Berkshire County are not so deprived, but are receiving so-called "significantly viewed" channels from Boston and Springfield allowing them to both receive significant amounts of Massachusetts news information and also allowing them to watch the home team, the New England Patriots during the football season. I have personally spoken to a representative of Time Warner Cable regarding the fact that our town (Hancock) is unserved by cable television services and have been advised that it is not economically feasible for TWC to run cable into the town of Hancock due to too few customers here to make it cost effective. Many other towns in the Berkshires and Western Mass are in the same situation and we are unfairly deprived of these services that our neighbors with cable access enjoy. Congressman Olver please do your best to make the pending bill fair to your rural constituents who receive television through the use of satellite dish services by allowing the transmission of significantly viewed out of market network channels from our state to be received here. Thank you for your attention to this matter.


David B

I have received no response from Congressman Olver, but I would urge others to email or call their reps on this.

 

[DishSubLA]

Then it isn't local programming, is it? BTW, do you have to be so inflammatory or do you just like being a jerk or immature?

He's just frustrated with huge amount of ignorance on this subject. Perhaps he mean to say that they are many situations when one is in the middle of all the broadcasters in their area but can not receive their locals by yagi, etc. Geography is one of the most common reasons. some folks are in the shadow of a hill and the fact they can't receive locals via OTA antenna because of an obstruction doesn't mean that the stations they can't receive OTA "aren't local programming [stations]," as you have charged in your post. The Los Angeles DMA is filled with several areas where you only hope of local broadcasts are pay TV. Some one 10 miles from the transmitters can't receive OTA, but someone else 20 miles away gets it good and strong.

There are other reasons why yagi, etc. aren't always a solution, but I think the point was made. I do think you owe an apology to all those people around the country who can't get their local OTA broadcasters simply because you charge they aren't local, implying that people are trying to receive out of DMA stations via OTA antenna. I'm sure johnnynobody feels quite embarrassed by his charge. Please go easy on him.

 

[david_jr]

I followed up with a similar email to Senator Kerry. We'll see if I get a reply from him. Still nothing from Rep. Olver.

 

[JTBenson]

I can get my channels OTA, but live in a DMA that is not served by Dish. I would just like the ability to get guide information on my 622 ViP. Dish CAN make this happen very easily, but refuses to.

 

[brownover]

Has anyone besides me read S.1670, the Satellite modernization act of 2009? I interpet the new significantly viewed section of this bill to say that significantly viewed includes local stations that are on cable will now be included.

 

[joecap1946]

Several years ago I used to be able to get CBS out of Dothan AL on DISH even though I am in the Panama City FL DMA which has no CBS station.

Like many others DISH pulled the CBS signal from us for some reason (which I never fully understood) even though it's still available on the local Comcast Cable service.

Never really understood why Comcast can offer CBS from both Dothan AL, and Tallahassee FL but DISH cannot?

Perhaps in the future DISH will be able to once again provide a CBS local to those of us in the Panama City FL DMA.

I'm in the same boat my friend. I'm too far to receive a Dothan signal, so I have to buy my CBS from All American Direct. We used to have Dothan as our CBS, but as you mentioned that changed. The cable company in the area, Mediacom is allowed to carry the signal. Very confusing.