Definitions Edit

A direct broadcast satellite (DBS) is

a high-powered satellite that transmits or retransmits signals which are intended for direct reception by the public. The signal is transmitted to a small earth station or dish (usually the size of an 18-inch pizza pan) mounted on homes or other buildings.[1]
a system in which GEO satellites broadcast a signal with sufficient power to enable direct reception in a home, office, or vehicle with an inexpensive receiver.[2]

Historical background Edit

The FCC received the first application for a license to offer satellite television from the Satellite Television Corporation in 1980, shortly after the ITU designated the 12.2-12.7 GHz band for Broadcast Satellite Services. Several other applications soon followed, from CBS, Direct Broadcast Satellite Corporation, RCA, United States Satellite Broadcasting Corporation and Western Union.[3]

Broadcasters (e.g., NBC, the Association of Maximum Service Television) and several public interest groups (e.g., the United Church of Christ), and others (e.g., the American Newspaper Publishers Association, the American Petroleum Institute, the Association of American Railroads) opposed the applications.

What did the FCC do? Edit

The FCC authorized DBS service, amended the Table of Frequency Allocations to permit DBS downlink operations in the 12.2-12.7 GHz band and uplink operations in the 17.3-17.8 GHz band, and adopted rules to prevent harmful interference to DBS operators from terrestrial licensees in the 12 GHz band.[4]

The FCC also decided to adopt a “flexible regulatory approach” to DBS systems, permitting DBS providers to choose to operate either as broadcasters or common carriers or both (i.e., as a broadcaster on some channels and a common carrier on others) and declined to impose ownership restrictions or access requirements.[5]

The FCC’s rationale for its actions Edit

The FCC concluded that DBS would give high-quality television service to as many as 11 million people in rural areas who in 1981 had no on-air reception or got fewer than 3 channels and who would be willing to pay as much as 5 percent of their income for this service.[6]

The FCC also determined that viewers in urban areas would highly value the additional options for television viewing that DBS could provide.[7]

Overall, the FCC concluded that the benefits of DBS far outweighed any adverse impact DBS would have on local broadcasting, and would also constitute efficient spectrum utilization.[8]

Impact of the decision: The long view Edit

Although the FCC “moved with the regulatory speed of light” in approving this new service, the market was slow to follow. DBS, thus, at least initially was seen as a major flop. Cable companies, fearing the threat from DBS, denied emerging DBS operators like DirecTV access to programming, and also formed their own DBS operator (Primestar), which led to an antitrust lawsuit filed by the New York Attorney General.

Congress then stepped in and helped DBS by enacting the Satellite Home Viewer Act of 1988 which allows satellite carriers to deliver broadcast programming to satellite viewers who were unable to receive broadcast programming (“unserved households”). In 1992, Congress went further and enacted the “program access” requirements (section 628), which essentially enabled DBS to get the right to offer cable content to its viewers on non-discriminatory terms.

An ongoing issue for regulators is whether (or when) these “program access” rules should be ended. If the rules are continued too long, there is a danger of harm to the competitive process.

In 1994, DirecTV became the first DBS system in operation in the United States and quickly became a popular service, signing up close to 10 million subscribers by 2000. In 2006, a Kagan report showed that cable’s market share had dropped more than 20 points throughout the previous 10 years as DBS added about 25 million subscribers. In 10 years, Kagan projects net new DBS subscribers will grow more than 6 million to more than 33.5 million by 2015.

References Edit

  1. FCC, Glossary of Telecommunications Terms.
  2. The Evolution of Untethered Communications, at 184.
  3. Inquiry into the Development of Regulatory Policy in Regard to Direct Broadcast Satellites, 90 FCC 2d 676 ¶¶2-5 (1982).
  4. Id. at ¶¶7, 59-77.
  5. Id. at ¶¶78-101.
  6. Id. at ¶¶13-14.
  7. Id. at ¶¶15-20.
  8. Id. at ¶21.

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