Government Stimies Broadcast Competition

Starting February 28, the government began enforcing a court order for all direct satellite broadcasters to stop sending out of market signals to subscribers. While the number of people losing their ability to watch programs like Ally McBeal, the X Files, and 60 Minutes, TV networks celebrated that the government has decided to protect their monopoly, at least for a little while longer.

That is because, unlike 50 years ago, the major networks and cable companies are experiencing intense competition from satellite broadcast companies. Of course, the broadcasters didn't notice this rarely enforced law until they began facing serious competition from satellite TV providers. In reality, local TV affiliates don't like the fact that satellite TV viewers are watching popular shows on out-of-town stations rather than on local stations. Fewer viewers means lower ratings, which in turn leads to lost advertising revenue.

That, at any rate, is what local broadcasters told a U.S. District Court judge in Florida, where the suit originated. Satellite TV is particularly popular in the Sunshine State, where there are often more alligators than cable TV providers and rooftop antennae often bring in only a few snowy television stations. Millions of consumers have flocked to their local electronics store to buy satellite dishes, which promise them more programming choices and top-quality picture and sound.

To get their network TV shows, though, dish owners must subscribe to a package of out-of-market channels carried by their satellite system provider. Satellite broadcasters lack the technology to send local network broadcasts to every household located in a specific region. This means Floridians who subscribe to satellite TV get their network broadcasts from Tennessee, New York and Washington state rather than from West Palm Beach or Gainesville.

Of course, satellite TV viewers don't mind having to watch out-of-town stations-they're just happy to be able to catch their favorite network shows instead of watching static. And poor TV reception isn't confined to remote rural areas. Millions of Americans who live in congested metropolitan areas such as Washington, D.C., struggle with the interference caused by tall buildings, cellular systems and government broadcasting towers. These consumers often opt for satellite service.

But to local broadcasters in places such as Florida, the satellite TV providers represent unfair competition. The judge who heard the case agreed and said that millions of Americans-not just in Florida, but throughout the country-can no longer receive out-of-market broadcast signals. DirecTV recently claimed it can prevent the cutoff by dropping a certain programming contractor, but satellite TV providers admit the legality of such a move is doubtful.