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EchoStar/DirectTV Announce Joint Letter on Satellite Legislation

LITTLETON, Colo.--(BUSINESS WIRE)--Oct. 12, 1999--

October 11, 1999

The Honorable Orrin G. Hatch

United States Senate

131 Russell Senate Office Building

Washington, DC 20510-4402

Dear Senator Hatch:

As we monitor the Conference Committee on reauthorization of the Satellite Home Viewer Act, we are increasingly concerned that the Conference Report may fail to meet the stated goal of both the House and the Senate: to increase competition to cable by allowing Direct Broadcast Satellite (DBS) providers to offer a fully comparable service to cable which includes local broadcast stations. This goal will not be achieved if DBS providers are unable to offer consumers local channels in a way that meets their expectations and their needs.

As the chief executives of the two largest DBS companies in the United States, we are writing to urge the Conference Committee to include certain provisions without which we will be unable to provide a meaningful local-into-local service. If that happens, consumers will remain deprived of the competitive choice they desire and deserve.

Since DBS providers began offering service, studies consistently have shown that consumers consider the lack of a local signal offering as a major obstacle to viewing DBS as a full competitor to cable. DIRECTV and EchoStar are prepared to become full-fledged competitors if the legal and regulatory framework for providing this service is fair and workable.

Although we each have our own business plans and set of expectations for meeting those plans, we are in full agreement that without the appropriate resolution of key issues, we will not be able to commence a meaningful local-into-local service. These essential elements are:

1. The FCC should be directed to take into account the fundamental capacity and other differences between cable and satellite, as well as the public interest, in crafting must carry rules. A "full" must carry requirement that fails to take into account channel capacity and other differences between cable and DBS is a major disincentive to entering a local market, and would effectively foreclose any possibility of bringing local channel service to medium and small markets.

2. The ability of consumers to choose a fully cable competitive DBS service will be substantially delayed unless Congress includes a phase-in period for retransmission consent, which is parity with what cable received in the 1992 Cable Act. If there is a phase-in, local-into-local service can commence almost immediately upon enactment of enabling legislation while we complete retransmission consent negotiations.

3. Broadcasters should be prohibited from discriminating among multichannel video programming distributors with respect to retransmission consent. If broadcasters can charge prohibitive retransmission consent fees, which render our companies non-competitive with cable, it will be uneconomical for our companies to commence a meaningful local-into-local service.

4. The network non-duplication, syndicated exclusivity and sports blackout rules should not be applied to DBS services. Consumers expect to receive 100% of the programming carried by a local broadcast station, just as they would if they watched the local station using a rooftop antenna. Consumers will reject local-into-local service if DBS providers are required to black out certain programs because of the application of these obscure FCC rules.

5. Eligible households must be able to get distant signals if they so choose, even if their DBS provider offers local signals in their market and even if they subscribe to local signals. Consumers should have the broadest array of viewing choices possible.

To be sure, there are other issues in H.R. 1554 about which we are deeply concerned, including those related to ensuring that we have a pro-consumer process for determining eligibility to receive distant network signals. But on behalf of the more than ten million current satellite TV subscribers, and the additional tens of millions of consumers who would benefit from increased competition to cable, the above-listed provisions are the minimum needed to fulfill your stated goal of enabling DBS providers to offer a meaningful local-into-local service.

We appreciate your interest in the Satellite Home Viewer Act legislation, and look forward to continuing to work with you to see it enacted this month.


Charlie Ergen                         Eddy W. Hartenstein
Chairman and CEO                      President
EchoStar Communications Corp.         DIRECTV, Inc.

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