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Press Release November 29, 1999 |
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WASHINGTON, D.C. -- President Clinton today signed the Satellite Home Viewers Act, a bill approved by Congress to allow satellite TV companies to offer local broadcast network channels.
With a final stroke of the presidential pen, millions of consumers will soon be able to get local TV channels via satellite for the first time, if satellite companies follow through on their promises.
In the hours immediately following the president's signature, the nation's major satellite TV companies DirecTV and EchoStar are planning to start providing local channels to major metropolitan markets across the country.
Over the next year, satellite providers say they expect to be able to offer local channels to up to 50 million homes, or about half of the nation's television households.
This development could signal a significant change for consumers who desire more choice and lower prices for their TV-viewing needs. Cable television has long dominated the TV provider market, but the new law could help satellite TV compete.
The law comes amid complaints among cable subscribers about rates and service. For overall satisfaction, cable finished a clear second to satellite in a national survey of 1,900 cable-TV and satellite-TV subscribers conducted by Consumer Reports magazine and published in its December issue.
According to the survey, just over one-third of cable subscribers were very or completely satisfied with their service, while about two-thirds of satellite customers were very or completely satisfied. Satellite subscribers gave higher scores than cable customers for picture and sound quality, selection of channels, value for money, and customer service. About one-third of cable subscribers in the survey complained of a substantial hike in rates in the past year; only 1 in 20 satellite customers had the same complaint.
Consumers Union, the publisher of Consumer Reports, has urged federal regulators and lawmakers to take action to restrain cable rates while boosting competition in the TV provider market. CU cites the cable rate increases that exceed three times the inflation rate since Congress and the White House called for the end of cable regulation in the 1996 Telecommunications Act as the basis for more aggressive efforts to help cable customers. Under the new law that takes affect today, satellite companies will have a six-month period to work out agreements with the major TV networks, during which time they would be entitled to broadcast local channels to all viewers. After six months, contracts between satellite providers and networks would have to be in place for satellite companies to continue to carry the channels.
Satellite providers plan to start rolling out local channels today in the largest markets and continue to add markets throughout the remainder of 1999 and in 2000. Markets targeted by the satellite companies include Atlanta, Boston, Chicago, Dallas/Ft. Worth, Los Angeles, New York City, Miami, Pittsburgh, Washington, D.C., Denver, Phoenix, Salt Lake City and San Francisco.
Gene Kimmelman, co-director of Consumers Union's Washington D.C. office, says he hopes the new satellite law will improve competition between cable and satellite, but he says much more needs to be done.
"The law will definitely help satellite companies offer local TV channels to dish owners in the biggest cities, but it fails to ensure that these channels will still be available to them six months from now. It also fails to create real opportunities for a satellite company to offer the stations to a much broader segment of the public.
"We hope that Congress will review the impact of this law after six months to determine whether adequate competition to cable companies is developing. Consumers who make a major investment in a satellite dish should be able to count on getting their local broadcast stations for as long as they want them."
Consumers Union, Publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumers. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers.
