LV satellite customers still waiting for local stations

Kevin Ferguson

Thursday, May 3, 2001 | 11:05 a.m.

More than 18 months after satellite TV providers were given permission from Congress to add local TV stations to their networks, Las Vegas stations still aren't carried on satellite TV services.

Some Las Vegas TV station executives are frustrated with the delay after seeing smaller markets, like Austin, Texas, get local programming by EchoStar Communications's Dish Network and Hughes Electronics' DirecTV.

Without such program connections, Las Vegans who own a satellite dish have to install antennas on their dish or hook up rabbit ears to their TVs to tune into local news and other Las Vegas programs.

"I'm concerned about (this), because we had hoped that they would come into the market by the fourth quarter of last year," said Dick Fraim, general manager of KLAS-TV, channel 8, the CBS affiliate in Las Vegas.

Local industry observers say about 10 percent of Southern Nevada households with TVs have satellite dishes. EchoStar's Dish Network offers local programming in 35 markets and DirecTV does so in 41 U.S. regions -- but neither offers such programming yet in Las Vegas.

Las Vegas is the nation's 51st largest TV market, but some local TV executives believe the area's rating will climb into the top 50 after the next survey is released in July due to the area's rapid growth.

When choosing which TV markets to expand local programming, satellite companies say the decision is based on population, demographics and whether satellite television equipment and services are readily available at local retailers, said DirecTV spokesman Bob Marsoci. Major league sports in a market is also a factor.

The satellite companies have to negotiate retransmission agreements with the local TV stations in the markets they enter.

EchoStar spokesman Marc Lumpkin said the company has expedited its local programming into markets that are smaller or of comparable size to Las Vegas because market size is only one element of the equation.

"We expanded into Albuquerque (market size 50), for example, because that area is unique. Its local stations reach almost the entire state, so we are able to reach beyond just the Albuquerque market," Lumpkin said.

While representatives of both major satellite providers say they want to expand their services in Las Vegas, they're not doing so because of a government rule requiring them to carry all local stations in every market they serve -- not just the most popular stations like those affiliated with the major networks. Satellite companies say the expense of these additions and limited capacity on their systems makes carrying all local stations impractical.

The Federal Communications Commission, under a 1999 Congressional bill, plans to implement this policy on by Jan. 1, 2002.

"That could delay us (expanding) into the Las Vegas market," Lumpkin said in an interview last week at the National Association of Broadcasters convention in Las Vegas.

Both companies are appealing the order in the Fourth Circuit Court of Appeals in Virginia.

A must-carry rule is a policy that cable providers adhere to. But satellite proponents say such policies are not warranted for their industry.

"The biggest difference between us and the cable industry is that we have a national footprint. We are not a monopoly in the areas we serve," said James Ashurst, spokesman for the Satellite Broadcasting and Communications Association (SBCA).

Rob Weisbord, who manages KVWB Channel 21 (Cable 12, the WB-affiliate) and KFBT Channel 33 (Cable Channel 6), both in Las Vegas, favors the must-carry rule.

"Our corporate stance is that we've petitioned that it's a fair right for all stations to be included," said Weisbord, whose Baltimore, Md.-based company Sinclair Broadcasting Group owns WB TV stations in various markets that are often excluded from satellite local programming packages.

But in court documents arguing against the must-carry rule, the SBCA compares the satellite companies' services to those of newspapers and magazines.

"They have the right to select (and exclude) the content they deliver, on their privately owned systems," a court filing states.

El Segundo, Calif.-based DirecTV, which is the largest U.S. satellite provider with 9.8 million customers, has halted its regional expansion plans until the court's ruling, Marsoci said.

"The bottom-line for Las Vegas residents is that we are hopeful that we will prevail in our lawsuit, but if we do, we expect (the FCC) to appeal it," Marsoci said.

Littleton, Colo.-based EchoStar Communications has 5.2 million customers. Neither EchoStar or DirecTV release publicly the number of customers they have in regional areas.

If the satellite companies win all court appeals, Marsoci said "it's highly likely" DirecTV would offer local programming in Las Vegas, but he declined to say when.

Marsoci said DirecTV had plans to expand into 70 markets, but this "must-carry" policy would be a major roadblock to expand.

For example, "there are 23 local broadcast channels in Los Angeles, but there are only seven or eight which most people watch," Marsoci said. "So we say, 'don't make us carry all these extra channels at the expense of smaller markets."'

In Los Angeles, DirecTV carries the four major network-affiliated stations. It also carries KTLA channel 5 (which broadcasts the Los Angeles Dodgers games), KCAL, channel 9 (which airs Los Angeles Lakers games) and WB-affiliate KCOP, channel 13.

EchoStar plans to launch two more satellites into orbit by spring 2002, which will give it the capacity to add more channels. DirecTV also plans to launch another satellite by the end of the year. But those satellites would likely be used for new channels in existing markets if the satellite companies' court appeals are unsuccessful.