Satellite Watch News February 1998 - Notes of Interest


Satellite Watch News
February 1998
Notes of Interest





CBS Eye On People On PrimeStar

CBS Eye on People will appear on Primestar under the service's basic PrimeValue package for $32.99.

Eye on People is also on DirecTV's lineup. With Primestar, the service remains on target to reach its revised goal of 10 million homes by spring.

The service has signed affiliation agreements with cable operators reaching a total of 45 million homes, but has landed very few actual commitments.



Canuck's To Name New Bird

Entertainers Bryan Adams and Dan Aykroyd are part of a panel of famous Canadians that will select the name of Telesat Canada's new direct broadcast satellite from among thousands of entries submitted by Canadians.

Telesat has received more than 6,000 possible satellite names since launching its National Satellite Contest in November and the company released some of the more unusual entries received so far.

Some entrants focus on the satellite's power, offering names such as The Boss of the Future, The Mother of All Satellites and El Nino.

Others (no doubt direct-to-home TV fans) hail its coming with grandiose possibilities such as Earth Guru; Universal Beam, Galaxy Love, The Phunk-a-Tron; Sweet Balm of Berceuse and Bird of Paradise.

An amazing number of people are eager for their own chance at immortality, suggesting versions of their own first names Tele-Simon; Celestial Ned, The Reza-Max 2000; Gord; SuperRod; Dave and Bub.

Other entrants draw their inspiration from pop culture, Canada's Third Rock from the Sun; Princess Leia Launcher; Big Bird; and Buzz Lightyear. A final group takes to heart the need for the name to be distinctly Canadian The Celestial Maple; Nucker Canucker; Shiny Beaver; Mountie-Vision; Poutine; and Itzarz' (i.e., "It's ours, eh?").



Canadian Firms Suspend Suit vs. Grey Market

The Satellite Communications Association of Canada says it welcomes a decision by a coalition of Canadian broadcasters to suspend its Federal Court lawsuit against them.

But SCAC President Brian Dinsdale says he will continue the fight for Canadian TV viewers to subscribe to American direct-to-home satellite services not licensed to operate in Canada.

There are two domestic DTH services, Star Choice and Express-Vu, up and running. But the association, which represents various electronics retailers, says there are still an estimated 800,000 dishes in Canada receiving satellite programming from outside the country, called the gray market.

The SCAC says it has received formal notice that a court action against them is "in abeyance" as WIC Premium Television, TMN Networks and the Family Channel suspend their action aimed at blocking the sale of hardware designed to pick up foreign satellite services. ExpressVu had already withdrawn from the lawsuit after some dish retailers threatened to boycott the sale of their equipment if drawn into a legal action.

The SCAC says it will proceed with its own Charter of Rights case, arguing that freedom of expression is being violated by the current interpretation of the Radio Com-munication Act.

"We are very much alive and determined to defend the rights of our customers and our own rights as business people," says Gloria Gibbins, co-owner of Davia Satellite Systems, Ltd. of Concord, Ont.



FCC SlashesFunding For Education

Federal Communications Com-mission Chairman William Kennard said the regulatory body will reduce the amount of money allocated for advanced communication networks in schools and libraries by approximately one-third.

In announcing the new funding structure, Kennard said the $325 million for the second quarter of 1998 is more in line with the actual needs of the marketplace.

The money in question comes from the Universal Service Fund, which is comprised of surcharges paid by all consumers to ensure basic communications services can be delivered affordably to all residents and educational facilities. The original budget had called for up to one billion dollars to be available to schools and libraries by June of 1998.

It became clear however, that since most schools will already be midway through their calendar year when the USF program begins in January, there was no need to collect and distribute all of the funds. The FCC will now recalculate the contribution level which will be required to fund the new spending levels.



DirecTV To Build New Broadcast Facility In Los Angeles

DirecTV unveiled plans for its Los Angeles Broadcast Center Monday, a facility that will complement the company's existing broadcast center in Castle Rock, Colo.

Construction of the new facility's interior will begin next month and is scheduled to be operational by second quarter 1999. Around 200 people are expected to be employed at the new center. "The City of Los Angeles has been an accessible, nimble and efficient partner to DirecTV in our effort to establish a digital broadcast center in the city," said Dave Baylor, DirecTV senior vice president. "In particular, Mayor Richard Riordan's L.A. Business Team and Councilwoman Ruth Galanter's team have gone to unbelievable heights to develop creative solutions to private sector concerns."

As part of an incentive package to DirecTV, Mayor Riordan's L.A. Business Team eliminated trans- portation trip fees and helped negotiate a favorable Department of Water & Power contract. The Business Team also expedited building and earthquake retrofit permits. In addition, DirecTV will take advantage of the City's recent 80 percent reduction in business taxes for multimedia companies.

The new center will be oper-ational 24 hours a day, seven days a week, will be capable of digitally transmitting via satellite more than 200 channels of feature films, entertainment, sports, educational programming, cultural performances and special events. The LABC will also provide the infrastructure to support new business opportunities and services for present and future subscribers.



USSB Expands Concentration On Movies, Premium Channels

As Expected, U.S. Satellite Broadcasting expanded its focus on movies with its upcoming elimin-ation of basic channels, giving them to DSS partner DirecTV for more premium programming.

The agreement announced by the two companies Tuesday calls for basic channels carried by USSB to transition to DirecTV in March. Channels involved are the MTV Networks (MTV, M2, VH1, Nickelodeon, and Nick at Nite's TV LAND), Lifetime and Comedy Central. In their place, USSB is adding new premium movie services from Showtime Networks and FX Networks.

Included in the new fare are Showtime Extreme and fXM: Movies from Fox. USSB said the new movie channels will be added at no additional cost.

"We are thrilled to be able to respond to the tremendous out-pouring of enthusiasm and unbeliev-able demand from our customers for even more movie channels," said Stanley E. Hubbard, USSB CEO and president. "The new networks we are adding from Showtime and FX will augment an already unprecedented selection of movie and viewing choices."

USSB plans to announce more movie networks in the near future, including new channels from HBO and Showtime. A year ago, USSB and Showtime announced a joint effort to develop programming for the DSS system, part of which is debuting with Showtime Extreme.



DirecTV To Expand Lineup With MTV Networks Fare, Others

Pointing out that cable operators around the country continue to raise their rates without adding any new services, DirecTV announced recently it will add eight channels - most of which are offerings from MTV Networks - to its programming packages at no additional cost.

Beginning March 10, MTV, M2, two feeds of Nickelodeon, Nick at Nite's TV Land, VH1, Comedy Central and Lifetime Television will be offered by DirecTV. The networks are moving from U.S. Satellite Broadcasting, which is adding new premium movie networks to its lineup, also at no additional cost to its subscribers.

The eight channels will be available in all Total Choice pro-gramming packages, which start at $29.99 per month. With the new additions, DirecTV offers more than 55 cable networks and 31 commercial-free audio channels in its basic Total Choice package.

DirecTV's Total Choice Silver features an additional 14 commercial-free movie channels, and Total Choice Gold offers more than 25 additional specialty sports networks. Total Choice Platinum offers all of the programming included in the Silver and Gold packages.



Asian/Niche Programming Launched On Telstar 5

Calif.,-based SpaceTV Systems launched a home satellite TV service aimed at Asian viewers and other niche groups located throughout North America using a Ku-Band transponder aboard Telstar 5.

SpaceTV is offering subscribers five Chinese video channels, ten Chinese audio channels, one Thai video channel, one Filipino video channel and an Asian Business News channel. The company said it will launch more channels, such as Korean, Japanese and Vietnamese offerings, in the near future. Plans also include interactive education channels for the coming months.

The company has built two digital broadcasting centers in Asia and the United States, and will sell a low-cost digital satellite receiver that is MPEG-2/DVB compliant now being mass manufactured in Taiwan.

SpaceTV also is offering an end-to-end turn-key service, including video playout, digital up-link, Telstar 5 Ku-Band transponder capacity, digital satellite receiver distribution, conditional access control and smart card management to niche broad-casters in the U.S. that need to distribute their video service.



Royalty Fee Fight - From The Other Side

A group of copyright owners, reportedly led by the Motion Picture Association of America, is circul- ating a "white paper" on Capitol Hill supporting a jump in satellite royalty fees to 27 cents for both superstation and network signals.

The white paper, which discusses the fee increase approved by Librarian of Congress James Billington, is apparently in response to bills introduced by Rep. Billy Tauzin (R-LA) and Sen. John McCain (R-AZ) that would repeal the Librarian's decision until Congress has a chance to examine the issue. The two bills introduced just prior to adjournment generated a strong show of support for the satellite industry.

The paper was signed by several groups, including ASCAP, BMI, National Basketball Association, the National Football League, the National Hockey League, the NCAA, the Office of the Commissioner of Baseball, and the Recording Industry Association of America.

The paper claims that if Congress blocks the royalty fee increase, it would be the same as imposing "price controls" which Congress has been reluctant to do. The paper also states the issue is whether or not satellite companies with multimillion dollar revenues should receive a statutory subsidy. "The proposal is unfair, unjustified and unnecessary,"



HDTV/DirecTV Demo, From Castle Rock to Vegas

By late 1998 or early 1999, consumers across the continental United States will be able to watch high definition television (HDTV) programming using an RCA 61-inch projection television set in com-bination with DirecTV program-ming.

During a joint press conference here at the annual International Consumer Electronics show, the two companies announced "aggressive" plans to bring HDTV to U.S. consumers.

The first HDTV sets, to be produced by RCA manufacturer Thomson Consumer Electronics in partnership with Hitachi, will likely cost in the $7,000 range, according to TCE Executive VP Jim Meyer. Noting that the new technology is ideally suited for movies and special events, DirecTV President Eddy Hartenstein presented the first-ever live broadcast of HDTV signals from the company's Castle Rock, Colo., broadcast center. The signals included a tape from last year's Super Bowl Game, with pictures clear enough to be nearly three-dimensional in quality.



EchoStar Goes Local...Hoping For Station Consent

Beginning this month, EchoStar will offer local signals in 20 top U.S. television markets, representing more than 40 percent of the population.

The company, which made the local channels announcement at the 1998 CES convention in Las Vegas, is hoping interpretations of com-munications regulations will allow it to retransmit local signals without necessarily getting prior approval from the networks. However, the company said it is still working with broadcasters regarding a satellite uplink.

With its EchoStar III satellite, the company's DISH Network service will uplink ABC, CBS, NBC and FOX affiliates in New York, Boston, Washington, D.C., Chicago, Atlanta and Dallas. The digital local TV channel package will retail for $4.99 monthly and will be available to eligible con-sumers beginning in mid-January.

"Existing law clearly gives EchoStar the ability to make the significant investment required to retransmit local channels now," the company said in a statement. Section 119 of the Satellite Home Viewer Act "specifically provides a copyright license covering EchoStar's plans" as well as another provision in communications law, according to the company.

"While Section 325 of the Communications Act of 1934 clearly exempts EchoStar from any requirement to obtain retransmission consent from local broadcasters, EchoStar plans to focus on providing local network channels to households in the local markets served by those affiliates," EchoStar said.

"Consequently, EchoStar con-tinues to work with networks and their affiliates to assure the best possible solutions for the consumer," the company went on to say. EchoStar added "must carry" laws apply only to cable and are not applicable to satellite, wireless cable or other alternatives.

The plan is also a very important step towards resolving the "white area" issue, EchoStar said.

Additional markets in the Eastern and Central Time zones will be added in February. EchoStar plans to add network affiliate stations from the Mountain and Pacific Time zones following the launch of EchoStar IV in the spring of this year.



EchoStar plan bothers others in TV industries

Plans by EchoStar Commun-ications Corp. to deliver local TV signals to small-dish satellite customers in major East Coast markets is giving heartburn to entrenched broadcast and cable interests.

EchoStar, based south of the Denver Tech Center, says it will begin offering ABC, CBS, NBC and Fox affiliates in cities such as New York, Boston, Atlanta and Wash-ington, D.C, this month. The price will be about $4.99 a month, plus $99 for a second satellite dish. Other markets, including Denver, could be served later in the year.

Most satellite-TV companies are prohibited by law from delivering local broadcast channels. However, EchoStar claims the right to serve certain viewers unable to receive those channels with an antenna. EchoStar Chief Charlie Ergen also wants federal approval to deliver broadcastsignals to any subscriber and thus become a full-fledged competitor to cable.

"This is good news for consumers and those of us who are committed to unleashing competitive forces in the marketplace," said Rep. Billy Tauzin of Louisiana, a key legislator who chairs the House telecommunications subcommittee.

But entrenched broadcast and cable interests don't like the plan. The National Association of Broadcasters said EchoStar's plan is a "radical misinterpretation" of federal copyright law. The National Cable Television Association said that satellite companies should not be able to provide just the top broadcast stations, but all of them - including public access, home shopping and religious channels - as cable companies must do.



EchoStar Gets Philips, Bloomberg

At the 1998 CES event in Las Vegas, EchoStar announced it partnered with Philips Consumer Electronics in an effort to market and sell the DISH Network satellite service through their national retail system.

The DISH Network also will begin providing Bloomberg Interactive Television data during summer 1998. The service will be digitally delivered to customers' PCs via the DISH Network/Adaptec Satellite PCI Receiver Card. In addition to the data product, DISH Network will offer Bloomberg Television, a 24-hour global news programming service that will be available to customers during the first quarter of 1998.



EchoStar Counters Rainbow's Carriage Fee Claim

Rainbow Programming's defense of fees it charges for regional sports channels is "unvailing and misleading," EchoStar Communications told the Federal Communications last week.

Rainbow, which owns several Sportchannel and the Madison Square Garden networks, said the fees it assesses EchoStar and other providers cover in-market and out-of-market factors. Rainbow, owned by Cablevision, filed its defense in response to EchoStar's claim that the company overcharges for carriage of its networks.

In its counter-attack, EchoStar said it "provides Rainbow with a sufficient level of volume that justifies a lower, not higher, rate than EchoStar's cable competitors, the majority of which serve far fewer subscribers."

EchoStar also asked the FCC to require Rainbow to disclose the fees it charges cable operators for carriage of its networks.



NBC Loses NFL Rights To $4 Billion CBS Deal

NBC lost future NFL weekend coverage to CBS, which forfeited its package to FOX after the 1993 season when the News Corp.-backed network placed a record billion-dollar deal with the league.

CBS reportedly will pay $4 billion for an eight-year deal to televise the Sunday AFC package formerly held by NBC. Earlier Monday, Fox and the NFL settled on a $4.4 billion, eight-year contract that allows the network to continue showing NFC games on Sunday.

The NFL holds the option to reopen the Fox and CBS contracts after five years, prior to the 2003 season.

The Sunday afternoon games are televised on NFL Sunday Ticket, the satellite-based package available to C-Band and DirecTV subscribers.

Still to be decided is the Monday Night Football package, which ABC has held since its inception. NBC, after losing the AFC Sunday afternoon rights it had held for several seasons, has put in a bid challenging ABC for Monday night coverage.



Canada's Norsat Goes Legit, No More Gray Sales

Canada's Norsat International and its Aurora Distributing division, which once sold DTH systems capable of receiving illicit U.S. programming, will debut a line of digital satellite TV receiving systems for the Star Choice DTH service.

The systems will be marketed under the Norsat brand name. The product line is an important step in the restructuring of Norsat's Aurora Distributing division. In December, the unit discontinued sales of small- dish DTH systems that enabled Canadians to receive U.S.-originated gray-market programming.



DirecTV, Warner Bros. Partner For PPV Promotion

DirecTV and Warner Bros. will launch an exclusive national sweepstakes offering the grand-prize winner a walk-on role in the movie studios' summer 1998 theatrical release, "Lethal Weapon 4."

The sweepstakes promotion for "Lethal Weapon 4" launches Feb. 4. Consumers enter by postcard only, and the grand-prize winner will be selected in March.

The promotion is part of a joint pay-per-view marketing effort that includes a comprehensive campaign to support Warner Bros.' action-thriller "Conspiracy Theory." Marketing support for "Conspiracy Theory" in February includes multiple full-page color ads in top magazines and publications and extensive on-air promotion.

"Conspiracy Theory" will debut on DirecTV's "DIRECT TICKET" Pay-Per-View service on Feb. 13.



Broadcasters OK Local TV For DTH..With Conditions

The National Association of Broadcasters endorsed a proposal that would allow satellite broadcasters to provide local TV programming, but with conditions.

The proposal from the broad-caster-backed organization would require DTH satellite providers to follow the same local TV regulations followed by cable, including must carry provisions that force cable operators to air all local TV station signals.

Broadcasters also want DTH companies to guarantee they won't import programming into markets violating exclusive deals struck by TV stations. The settlement approved by the NAB and DTH programmers would create a database of homes eligible for distant market signals. The database would qualify homes by their ZIP code.

A lawsuit against PrimeTime24 is still pending.

Commenting on the NAB move, EchoStar Chairman Charlie Ergen said he was happy with the NAB's stand, and added delivery of local channels by satellite is critical to foster more competition to cable.

However, he said satellite tech-nology today can't handle all local stations. And despite assertions from the NAB that all stations get carriage, EchoStar said current law doesn't require the company's DISH Network to make room for those stations.

"The 'must carry' laws specifically apply only to cable and are not applicable to satellite, MMDS or other alternative means by which local network stations are broadcast because their penetration in house-holds are a mere fraction of the monopoly share that the cable industry holds," Ergen said.

"The burden of 'must carry' on innovative strategies such as EchoStar's DISH Network's digital local satellite broadcasting would stop this competitive force before it even gets started. However, when EchoStar's local market penetration approaches that of the local cable operator and technology permits, EchoStar would be pleased to submit to a technology-appropriate 'must carry.'"



More Football Changes

ESPN Becomes NFL's Exclusive Cable Carrier - ESPN will become the NFL's exclusive cable carrier for the next eight years, through the year 2005. The deal beats out Time Warner's TNT future coverage. Each year from 1998-2005, ESPN will televise the NFL's entire 18-game Sunday night package as well as four pre-season games.

This announcement came along with the news that ABC has renewed its Monday Night Football series for eight more years.



DirecTV To Use G3R, Has Plans For Ka-Band

DirecTV acquired 4 Ku-Band transponders from PanAmSat in an effort to further expand its program- ming lineup with niche and ethnic-oriented programming.

And a spokesman with the Hughes Electronics-backed service said Tuesday the company will also pursue Ka-Band capacity near its 101-degree position, with plans for 6 Ka Band birds; 2 at 96.5 degrees, 2 at 105.5 degrees and 2 at the 101 degree position.

DirecTV will deliver new pro-gramming using Ku-Band trans-ponder capacity aboard the Galaxy III-R satellite at 95 degrees.

The Galaxy satellite will also offer expansion capabilities for the launch of high definition television later this year.

Under its proposal, DirecTV would launch six Ka-Band satellites. Two would be placed at 96.5 degrees, another two at 105.5 degrees while the remaining two would be parked somewhere inside the 101-degree location.

Additionally, Hughes Network Systems developed a new DSS system for the niche service. Equipment includes an elliptical-shaped dish that is a little larger than present DSS systems, and a receiver that can take programming from Galaxy III-R as well as DirecTV's DBS satellite.



CNN Signs For G3R Capacity

GE AmeriCom's GE-3 satellite will deliver CNN programming throughout North America after signing an agreement with Turner Broadcasting International.

The satellite will deliver financial news, sports, weather and breaking news to network television affiliates, independent stations and millions of viewers in the United States and Canada.

Turner Broadcasting will utilize three C-Band transponders to transmit programming for both CNNfn and CNN/SI. A fourth GE-3 transponder, a Ku-Band pipeline, will deliver programming for CNN Newsource, a syndicated news service with more than 500 network affiliates and independent television stations in the United States, Canada and Puerto Rico.



DirecTV Settles Program Switch Complaints

Attorney general offices in 31 states reached a settlement with DirecTV over consumer complaints regarding changes in programming, specifically premium movie chan-nels that were taken away after they were paid for through annual subscription packages.

Under terms of the agreement, DirecTV won't admit any wrong-doing and will pay $812,000, a sum which will be shared by 29 of the 31 states in the settlement. Two of the states were ineligible to obtain expense reimbursement. More than 500,000 subscribers are impacted by the settlement.

Pennsylvania Attorney General Mike Fisher and Florida Attorney General Robert Butterworth lead the multi-state group negotiating the agreement.

Consumer complaints centered around DirecTV's advertisement for a "$200 Cash Back Offer." In the offer, consumers who purchased a system and paid in advance for a year of programming were eligible for either a $200 cash refund or $200 off their annual subscription package.

In the pre-paid "Total Choice" subscription package, consumers were offered a variety of channels, including seven Encore Movie premium selections. However, before the pre-paid subscriptions ended, DirecTV replaced the seven Encore channels with networks that did not include movies. In order to keep the Encore Movie channels consumers were told they had to pay an additional $4 per month.

In the settlement, DirecTV also agreed not to make programming changes in the future for consumers who pre-pay annually for specific channels, unless the company offers a pro-rated refund to those that would prefer to cancel their subscription.

States participating in this agreement include Arizona, Arkan-sas, California, Connecticut, Dela-ware, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Tennessee, Texas, Vermont and West Virginia.



EchoStar Seeking Permission To Move Around Satellites

Echostar has asked the FCC for permission to move one of its satellites at 119 degrees to 148 degrees after a new satellite is launched in March.

The company originally had planned on using 148 degrees in 2002, but according to FCC material it has requested permission for earlier access. EchoStar has said in the past it wanted to use the orbital location at 148 degrees for delivery of local channels to markets in the western United States.






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