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Satellite TV Firms Ask For Tax Breaks

February 25, 2009

Testifying before a congressional subcommittee on Tuesday, senior executives of DirecTV Group Inc and DISH Network Corp said that proper incentives would make satellite television companies willing to extend local service to underserved and rural areas.

Lawmakers are debating whether to renew a law that gives the two national satellite television companies the right to carry and retransmit broadcast television content.

Some in Congress say any renewed law should require companies to provide local service in all of the nation’s 210 designated market areas.

Rick Boucher, who chairs the House communications and technology subcommittee, said rural residents in about 30 markets cannot currently receive local news and weather programming via satellite subscriptions.

Charles Ergen, CEO of DISH Network, said his company is willing to provide the local programming if it receives assistance in funding the technical fixes needed for retransmission.

Ergen said that local TV stations should be required to allow the retransmission at no cost, or for a fixed royalty rate.  And stations without truly local content, a number Ergen estimated at 15 to 20 percent, should be excluded from retransmission requirements, he added.

“We would love to be able to do it with the right incentives,” Ergen said.

However some stations have been increasing their rates, according to DirecTV Senior Vice President Bob Gabrielli.

“Broadcasters now routinely demand fees three times those previously paid. And it does not appear that this additional money is being used to provide more or better local programming,” he told the subcommittee.

“Many broadcasters are producing less and less local news.”

Representative Bart Stupak (D-MI) expressed frustration with the firms, saying residents of his hometown of Marquette did not have access to local content such as school closings, despite pledges that the situation would be resolved.

“All these promises that we get from these guys, but you never seem to fulfill it,” said Stupak, who has introduced a bill requiring satellite TV companies to carry local broadcasting in all markets.

Boucher said the law being considered for renewal was established to help satellite television companies compete against cable network operators and to give consumers more programming alternatives.

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