[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]






      REAUTHORIZATION OF THE SATELLITE HOME VIEWER EXTENSION AND 
                          REAUTHORIZATION ACT

=======================================================================

                                HEARING

                               BEFORE THE

      SUBCOMMITTEE ON COMMUNICATIONS, TECHNOLOGY, AND THE INTERNET

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 24, 2009

                               __________

                            Serial No. 111-5








      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov




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                    COMMITTEE ON ENERGY AND COMMERCE

                       HENRY A. WAXMAN, California
                               Chairman
JOHN D. DINGELL, Michigan               JOE BARTON, Texas
  Chairman Emeritus                       Ranking Member
EDWARD J. MARKEY, Massachusetts         RALPH M. HALL, Texas
RICK BOUCHER, Virginia                  FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey          CLIFF STEARNS, Florida
BART GORDON, Tennessee                  NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois                 ED WHITFIELD, Kentucky
ANNA G. ESHOO, California               JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                   JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York                ROY BLUNT, Missouri
GENE GREEN, Texas                       STEVE BUYER, Indiana
DIANA DeGETTE, Colorado                 GEORGE RADANOVICH, California
  Vice Chairman                         JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California                  MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania          GREG WALDEN, Oregon
JANE HARMAN, California                 LEE TERRY, Nebraska
TOM ALLEN, Maine                        MIKE ROGERS, Michigan
JANICE D. SCHAKOWSKY, Illinois          SUE WILKINS MYRICK, North Carolina
HILDA L. SOLIS, California              JOHN SULLIVAN, Oklahoma
CHARLES A. GONZALEZ, Texas              TIM MURPHY, Pennsylvania
JAY INSLEE, Washington                  MICHAEL C. BURGESS, Texas
TAMMY BALDWIN, Wisconsin                MARSHA BLACKBURN, Tennessee
MIKE ROSS, Arkansas                     PHIL GINGREY, Georgia
ANTHONY D. WEINER, New York             STEVE SCALISE, Louisiana
JIM MATHESON, Utah                      
G.K. BUTTERFIELD, North Carolina        
CHARLIE MELANCON, Louisiana             
JOHN BARROW, Georgia                    
BARON P. HILL, Indiana                  
DORIS O. MATSUI, California             
DONNA M. CHRISTENSEN, Virgin Islands    
KATHY CASTOR, Florida                   
JOHN P. SARBANES, Maryland              
CHRISTOPHER MURPHY, Connecticut         
ZACHARY T. SPACE, Ohio                  
JERRY McNERNEY, California              
BETTY SUTTON, Ohio                      
BRUCE BRALEY, Iowa                      
PETER WELCH, Vermont                 
      Subcommittee on Communications, Technology, and the Internet

                         RICK BOUCHER, Virginia
                                 Chairman
EDWARD J. MARKEY, Massachusetts      FRED UPTON, Michigan
BART GORDON, Tennessee                 Ranking Member
BOBBY L. RUSH, Illinois              J. DENNIS HASTERT, Illinois
ANNA G. ESHOO, California            CLIFF STEARNS, Florida
BART STUPAK, Michigan                NATHAN DEAL, Georgia
DIANA DeGETTE, Colorado              BARBARA CUBIN, Wyoming
MICHAEL F. DOYLE, Pennsylvania       JOHN SHIMKUS, Illinois
JAY INSLEE, Washington               HEATHER WILSON, New Mexico
ANTHONY D. WEINER, New York          CHARLES W. ``CHIP'' PICKERING, 
G.K. BUTTERFIELD, North Carolina         Mississippi
CHARLIE MELANCON, Louisiana          VITO FOSELLA, New York
BARON P. HILL, Indiana               GEORGE RADANOVICH, California
DORIS O. MATSUI, California          MARY BONO MACK, California
DONNA M. CHRISTENSEN, Virgin         GREG WALDEN, Oregon
    Islands                          LEE TERRY, Nebraska
KATHY CASTOR, Florida                MIKE FERGUSON, New Jersey
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
PETER WELCH, Vermont
JOHN D. DINGELL, Michigan (ex officio)





















                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Rick Boucher, a Representative in Congress from the 
  Commonwealth of Virginia, opening statement....................     1
Hon. Cliff Stearns, a Representative in Congress from the State 
  of Florida, opening statement..................................     4
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     5
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, prepared statement...................................     6
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     7
Hon. Zachary T. Space, a Representative in Congress from the 
  State of Ohio, opening statement...............................     8
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     8
Hon. Doris O. Matsui, a Representative in Congress from the State 
  of California, opening statement...............................    10
Hon. Nathan Deal, a Representative in Congress from the State of 
  Georgia, opening statement.....................................    11
Hon. Lee Terry, a Representative in Congress from the State of 
  Nebraska, opening statement....................................    12
Hon. Mike Ross, a Representative in Congress from the State of 
  Arkansas, opening statement....................................    12
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................    13
Hon. Edward J. Markey, a Representative in Congress from the 
  Commonwealth of Massachusetts, opening statement...............    14
Hon. John D. Dingell, a Representative in Congress from the State 
  of Michigan, opening statement.................................   152
Hon. G.K. Butterfield, a Representative in Congress from the 
  State of North Carolina, opening statement.....................   153

                               Witnesses

Cynthia M. Lummis, a Representative in Congress from the State of 
  Wymoming.......................................................     8
    Prepared statement...........................................     8
Charles W. Ergen, Chairman, President, and Chief Executive 
  Officer of DISH Network Corporation............................    15
    Prepared statement...........................................    18
    Answers to submitted questions...............................   154
Martin D. Franks, Executive Vice President, Policy, Planning, and 
  Government Relations, CBS Corporation..........................    22
    Prepared statement...........................................    24
Bob Gabrielli, Senior Vice President, Broadcasting Operations and 
  Distribution, DIRECTV, Inc.....................................    39
    Prepared statement...........................................    41
    Answers to submitted questions...............................   168
Willard Rowland, President and CEO, Colorado Public Television, 
  on behalf of the Association of Public Television Stations.....    56
    Prepared statement...........................................    58
    Answers to submitted questions...............................   180
K. James Yager, CEO, Barrington Broadcasting Group, LLC, on 
  behalf of the National Association of Broadcasters.............    66
    Prepared statement...........................................    68
    Answers to submitted questions...............................   186
Gigi B. Sohn, President and Co-founder, Public Knowledge, on 
  behalf of Public Knowledge, Consumers Union, and Free Press....   107
    Prepared statement...........................................   109
W. Kenneth Ferree, President, Progress and Freedom Foundation....   118
    Prepared statement...........................................   120

 
      REAUTHORIZATION OF THE SATELLITE HOME VIEWER EXTENSION AND 
                          REAUTHORIZATION ACT

                              ----------                              


                       TUESDAY, FEBRUARY 24, 2009

              House of Representatives,    
Subcommittee on Communications, Technology,
                                  and the Internet,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:05 a.m., in 
room 2123, Rayburn House Office Building, Hon. Rick Boucher 
(chairman of the subcommittee) presiding.
    Present: Representatives Boucher, Markey, Eshoo, Stupak, 
DeGette, Weiner, Melancon, Matsui, Christensen, Castor, Murphy 
of Connecticut, Space, McNerney, Waxman (ex officio), Stearns, 
Deal, Shimkus, Buyer, Radanovich, Walden, Terry, Rogers, 
Blackburn, and Barton (ex officio).
    Also Present: Representative Ross.
    Staff Present: Amy Levine, policy coordinator; Roger 
Sherman, senior counsel; Tim Powderly, counsel; Shawn Chang, 
counsel; Philip Murphy, legislative clerk; Neil Fried, minority 
senior counsel; Garrett Golding, minority policy analyst; Will 
Carty, minority professional staff member; and Amy Bender, 
minority detailee.

  OPENING STATEMENT OF HON. RICK BOUCHER, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF VIRGINIA

    Mr. Boucher. The subcommittee will come to order. On the 
occasion of the first order of this subcommittee, I want to 
welcome all of the members of the subcommittee and encourage 
each member to share with me your ideas for matters that we 
should place on the subcommittee's agenda. It is my 
determination that the subcommittee will operate in a 
completely bipartisan fashion, and I intend to consult 
colleagues on both sides of the aisle about each matter that 
the subcommittee will address. So please give me the benefits 
of what you would like for the subcommittee to achieve and 
share those suggestions with me over the coming several weeks.
    The full agenda for the subcommittee is still under 
construction, but I can announce this morning that the next 
hearing for the subcommittee will be on March 12th, during 
which we will begin our work on universal service reform, and 
that is a subject on which I hope that we can report 
legislation to the full committee during the coming months. 
After the hearing on March the 12th, the pace for having 
hearings for this subcommittee will accelerate.
    The subcommittee has a longstanding tradition of 
bipartisanship, and over 2 decades, I have enjoyed an ongoing 
partnership across a range of issues with the ranking 
Republican member of this subcommittee, the gentleman from 
Florida, Mr. Stearns. We have been lead sponsors of privacy 
legislation in past years, and in this Congress we may well 
consider bringing that issue forward again as well as other 
matters relating to information technology policy.
    And so this morning as I make general opening comments, I 
want to say that I very much welcome the position of Mr. 
Stearns as the ranking Republican on this subcommittee, given 
the long experience and technology-related issues that he 
brings to this work and to that position, and I very much look 
forward to our work together as I do with all members of the 
subcommittee on both sides of the aisle.
    Today the subcommittee takes the first step is 
reauthorizing the Satellite Home Viewer Act, which sets forth 
the terms pursuant to which satellite carriers retransmit 
distance signal broadcast programming. Certain provisions of 
the Communications and Copyright Acts expire at the end of 
2009, making reauthorization of the Home Satellite Viewer Act 
and that compulsory license must-pass legislation during the 
course of this year.
    This year marks more than 2 decades since Congress created 
the distance signal compulsory copyright license in 1988 and 10 
years since it created the local-into-local compulsory license 
in the 1999 Satellite Home Viewer Improvement Act. Since 1988, 
direct broadcast satellite has grown to be a robust competitor 
to cable. Today, nearly one-third of all homes subscribing to a 
multi-channel video programming service choose a DBS provider. 
And DIRECTV and EchoStar are the second and third largest 
multi-channel video programming service providers in the Nation 
respectively.
    This increase in a competitive video programming 
marketplace would not have been possible had it not been for a 
series of acts of this Congress, including the two licenses to 
which I have previously referred, as well as the program access 
rules that were adopted in the early 1990s.
    Let me state at the outset my desire that Congress proceed 
with the reauthorization before us in the most straightforward 
manner possible. I do not wish for us to get sidetracked by 
collateral issues, such as retransmission consent reform that 
are relevant to all multi-channel video platforms, not just to 
satellite platforms.
    However, there are several matters that I think we cannot 
avoid discussing in the hearing today and as we continue our 
work on this reauthorization. One is whether satellite carriers 
should provide local service in all 210 designated market areas 
nationwide as a condition of relying on the Section 122 local-
into-local compulsory license.
    As I mentioned earlier, the Section 122 license was created 
10 years ago. At that time, due primarily to the severe 
capacity constraints that were faced by satellite carriers in 
part because spot beam technology had not been at that time 
widely deployed, Congress allowed satellite carriers to roll 
out local service on a market-by-market basis.
    Today, most of the country is served with local-into-local 
service. Today DIRECTV relies on that Section 122 license to 
offer local service in 150 markets and EchoStar provides local 
service in 178 markets. But about 30 markets, among the 210 
nationwide, do not have local-into-local coverage at all. Most 
of the DMAs that lack local-into-local service are in rural 
areas, such as the congressional district that I represent. 
And, in fact, constituents in one of the four DMAs that 
comprise my congressional district still cannot get their local 
stations by way of satellite, a fact with which I am 
reacquainted on a regular basis as constituents in that area 
complain to me vocally whenever I am in that region about their 
inability to get local signals delivered by satellite.
    While I understand that the numbers of subscribers in these 
areas are small, these households which often cannot receive 
local signals over the air because the DMAs in which they 
reside are large or because of terrain issues--many of these 
regions are also mountainous--these individuals are very vocal 
in their desire to receive the opportunities that those in more 
densely plated portions of the Nation presently have.
    Another matter for discussion is whether residents in one 
DMA should be able to receive broadcast programming from an 
adjacent DMA. DMAs in 45 States straddle State lines, which 
means residents in one State are assigned to a DMA that is 
primarily located at a neighboring State. For many, in that 
kind of situation, the local news, sports and public safety 
information they receive from the stations in their designated 
DMA actually derive from another State and/or are more 
concentrated on events that occur in that other State.
    So, one possible arrangement might be to allow for the 
provision of adjacent market signals in those situations with 
the people in the State that has a minority of the viewers in 
that straddle situation being able to subscribe to the adjacent 
market signals of the adjacent market within the State in which 
those individuals live.
    In past years, the law has been modified to allow adjacent 
market signal transmission in certain specified markets. Today 
we begin a discussion about the potential for enacting a 
general rule on adjacent market signals for situations where 
the DMAs straddle State lines, about 45 markets in total across 
the country.
    The Energy and Commerce Committee and the House Judiciary 
Committee share jurisdiction over the Home Satellite Viewer 
Act. And as a member of both of those committees, it is my 
desire that the subcommittees work closely together and create 
a common text which both committees can then process. In fact, 
the Judiciary Committee has its first hearing tomorrow morning 
on this subject, and we are already in discussions, senior 
staff to senior staff, about the kinds of coordination we could 
achieve in the work between these two committees.
    I want to welcome our witnesses this morning, and I want to 
thank each of them for taking the time to share their 
thoughtful comments with us. The prepared testimony is 
excellent. We appreciate your providing that, and after we have 
had an opportunity for other members to make their statements 
we will turn to your testimony.
    In accordance with the rules of the committee, any member 
who decides to waive an opening statement will have 2 minutes 
added to the time that member can propound questions to our 
witnesses this morning.
    It is my pleasure now to recognize the ranking Republican 
member of our subcommittee about whom I have already made some 
welcoming remarks, the gentleman from Florida, Mr. Stearns.

 OPENING STATEMENT OF HON. CLIFF STEARNS, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Mr. Stearns. Good morning. And thank you very much, Mr. 
Chairman, for having this hearing. Obviously we are all 
excited. Let me congratulate you on becoming the new chairman 
of this very important committee. As you pointed out, it has 
had a long history of bipartisanship. So I look forward to 
working with you. You have the capability, you have the 
interest and the passion for telecommunications and Internet. 
So you and I have worked together on other things, so I look 
forward to this great opportunity to work again with you on 
this important committee.
    Obviously we live in exciting times. Advances in broadband 
technology, health care, and how we produce and distribute 
electricity will spur long-term economic growth, increase 
international competitiveness and improve the quality of life 
for all Americans. Frankly, we are only limited by our 
imagination.
    The topic of today's hearing, the Satellite Home Viewers 
Act, simply allows satellite companies to deliver broadcast 
television signals. The act should be updated and made more 
consumer friendly. Its antiquated provisions are frustrating 
television viewers. At a minimum we should revise the law to 
reflect the end of analog broadcasting as well as to allow 
willing satellite operators and broadcasters to offer in State 
signals to households whose local markets include only out-of-
State stations. We should resist calls to expand the carry-one/
carry-all requirements governing satellite delivery of local 
broadcast stations. Doing so would not only be bad policy, it 
would be unconstitutional.
    My colleagues, over the past 20 years, technology has 
progressed beyond what most of us have ever or could have 
imagined. Twenty years ago, the Internet was used as a mere 
fraction of what it is today. There are other signs of how much 
things have changed.
    For example, let me just give you this little statistic. In 
the United States today, more people earn their living on eBay 
than are employed by the entire steel industry. Furthermore, in 
1989, all of us remember the Tandy 5000. It was billed as the 
most powerful computer ever built. It had a lightning fast 
20MHz processor and a whopping 2 megabytes of RAM. All of this 
cutting edge technology cost you almost $9,000. Monitor and 
mouse were not included. Now, if you take and make in today's 
dollars, that would be equivalent to $15,000. So we have seen 
how things have changed so dramatically.
    This brings us to the subject of today's hearing. I am 
looking forward to this committee moving forward on the 
Satellite Home Viewer Act Reauthorization. This act has served 
multiple times to advance competition and frankly to give 
consumers more choices. I anticipate exploring market-based 
avenues for satellite providers to continue adding even more 
local stations because all of us know local content is 
essential and a customer's desire.
    I would add that I am concerned about some interest in 
requirements that satellite TV providers serve all 210 media 
markets. Now, such initiative not only challenges the laws of 
physics, but also challenges how one is able to go to the 
capital and credit markets to achieve and accomplish this goal. 
A better approach, I believe, is to make smaller markets more 
attractive by allowing them to be carried as an adjacent local 
market in addition to the market that Nielsen determines that 
you live in. That is the rational way to incentivize more 
carriage and one that doesn't even go as far as the Internet 
distribution model that the broadcast networks are already 
presently implementing.
    The video marketplace has never been more competitive. In 
the past cable was the only pay TV option. Fifteen years ago, 
cable had 95 percent of the pay TV market. Now that share has 
dropped to 68 percent. More than 32 million consumers now 
subscribe to a service other than cable. After Comcast, the 
second and third largest pay TV providers are DIRECTV and DISH 
Network. Phone companies are aggressively stealing subscribers 
with their video offerings. In fact, both AT&T and Verizon 
would rank in the top 10 of largest pay TV providers today.
    Furthermore, local and national programmers alike are 
offering content to consumers over the Internet either on Web 
sites for free or simply through services such as iTunes.
    So as you can see, Mr. Chairman, consumers have a number of 
choices, and this competition will lead to new products and to 
new better services. We no longer have the justification to 
deny America's households access to the programming of their 
choice, subject only to free market negotiations by 
distributors and the content owners. Indeed, we should be 
reducing video regulation in this competitive environment, not 
increasing it. We need to innovate and not regulate.
    So I look forward to the hearing, Mr. Chairman, and I look 
forward again with working with you on these important matters. 
Thank you.
    Mr. Boucher. Thank you very much, Mr. Stearns. The 
gentleman from California, Mr. Waxman, chairman of the full 
Energy and Commerce Committee, is recognized for 5 minutes.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman. Today's 
hearing marks the first step of the 111th Congress toward its 
required reauthorization of the Satellite Home Viewer Extension 
and Reauthorization Act, known as SHVERA. Today is also the 
first hearing of this newly constituted Subcommittee on 
Communications, Technology, and the Internet. The subcommittee 
has a new name, a new chairman and some new members. And I 
would like to congratulate Mr. Boucher on his chairmanship and 
welcome the new members to the subcommittee.
    Mr. Boucher has a long history on this subcommittee and an 
exceptional command of telecommunications issues, and I look 
forward to working closely with him and Ranking Member Cliff 
Stearns and relying on their expertise as we consider this 
reauthorization.
    SHVERA is a complicated bill that grew out of competing 
policy goals promoting competition for pay television service 
and protecting our nationwide system of free over the air 
broadcast television. Achieving these competing goals 
especially during the time of dramatic change in the 
communications marketplace requires a careful balancing of 
interests, and the panel before us today represents a diverse 
group of stakeholders. So we are all anxious to hear their 
testimony and we very much appreciate their participation.
    Thank you very much, Mr. Chairman, for this opportunity to 
say a few remarks and to express my desire to work with you and 
other members of this committee as we fashion this legislation.
    Mr. Boucher. Thank you very much, Chairman Waxman, and I 
appreciate your kind words. And I look forward very much to 
working with you as well.
    The gentleman from Illinois, Mr. Shimkus, is recognized for 
2 minutes.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Shimkus. Thank you, Mr. Chairman, and I too am excited 
about your chairmanship of this committee. And let me just say 
if you can have some hearings in regular order you may be able 
to set the example for the rest of this Congress. So I am 
applauding your attempt to do that.
    Let me also report on the digital transition. Many of my 
broadcasters have turned off their analog signal, which I 
applaud. And we have heard very few complaints. In fact, I 
think my D.C. office got one call. I know one broadcaster may 
have had 40 calls and that was just to set the scan button on 
the digital receiver. I am very excited to report that.
    Yesterday I was on a major St. Louis morning talk show and 
the host there, a guy, McGraw Milhaven, and I have had a 10-
year relationship. And it started with the debate of SHIVA, 
which he was really a late night guy, I think 1:00 in the 
morning, and had followed in the local debate, was pleased with 
our passage, saw the benefits and we have been friends ever 
since. So I mentioned it to him yesterday that I was going back 
to Washington to start the debate on reauthorization, which 
brings me to the aspect of reauthorization.
    We know it ties in with the digital transition and analog. 
There has to be some changes because of that technology. But I 
would also just caution us that we be careful not to harm the 
multiple options that consumers have today. It is truly a 
phenomenon of all the availability to view and compete and 
receive signals from a multitude of area. It is very important 
in my congressional district that we have the local in the 
local for the public safety debate. But again, I would just 
caution that we move diligently, and with your promise to have 
hearings and move through regular order, I think that is the 
way in which we address the minute details of bills which could 
be very, very harmful.
    I thank you and yield back my time.
    Mr. Boucher. Thank you very much, Mr. Shimkus. The 
gentlelady from California, Ms. Eshoo, is recognized for 2 
minutes.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman. First of all, my 
congratulations to you on assuming the chairmanship and the 
gavel of this really wonderful and important subcommittee. I 
have always enjoyed your insights and I respect them relative 
to technology and telecommunications issues, and I look forward 
to working with you and all of my colleagues on this 
subcommittee.
    I am very pleased that we are starting out with the 
discussion of this reauthorization early so that we can flush 
out all of the issues surrounding it. The week before last, 
many members were visited by their local public television 
stations. They expressed their concern that access to local 
public television stations' digital programming is denied to 
almost half of all direct broadcast satellite households. That 
is nearly 12 million households in our country because one 
major DBS provider has failed to negotiate a long-term deal 
with public television.
    I am reintroducing legislation in this Congress, as I did 
in the last, the Satellite Consumers Access to Public 
Television Digital Programming Act--it is a mouthful--to 
require DBS carriage of all public television stations, 
multicast digital stations. I am very pleased that DIRECTV, the 
Association for Public Television Stations, and PBS announced 
that they reached an agreement whereby DIRECTV would carry 
public television stations' digital signals. I think it is 
unacceptable for any household to be denied access to public 
television's digital programming.
    So I am looking forward to questioning the witnesses 
certainly DISH Network, and I appreciate meeting Mr. Ergen this 
morning. I think the bill would be unnecessary if they would 
just come to a similar agreement as their competitor.
    So thank you, Mr. Chairman, again. And congratulations and 
I look forward to a very full 111th Congress where we will 
really distinguish ourselves on behalf of our constituents. 
Thank you.
    Mr. Boucher. Thank you very much, Ms. Eshoo. The ranking 
Republican member of the full Energy and Commerce Committee, 
the gentleman from Texas, Mr. Barton, is recognized for 5 
minutes.
    Mr. Barton. Mr. Chairman, I won't take too long. I 
appreciate you doing this hearing. I think we do need to 
reauthorize the satellite home viewer extension and 
reauthorization legislation, and I think this may be an issue 
that we can work together on. So I am supportive and look 
forward to hearing from the witnesses.
    Mr. Boucher. All happy thoughts. Thank you very much, Mr. 
Barton.
    The gentleman from Michigan, Mr. Stupak, is recognized for 
2 minutes.
    Mr. Stupak. Thank you, Mr. Chairman. Congratulations being 
chairman of this committee. I want to waive my time and use it 
for questioning.
    Mr. Boucher. The gentleman from Michigan waives his opening 
statement. The gentlelady from Colorado, Ms. DeGette, is 
recognized for 2 minutes. She is not here, is she? The 
gentlelady from the Virgin Islands, Mrs. Christensen, is 
recognized for 2 minutes.
    Ms. Christensen. Thank you, Mr. Chairman. I will waive my 
opening statements.
    Mr. Boucher. Mrs. Christensen waives her opening statement. 
The gentleman from Ohio, Mr. Space, is recognized for 2 
minutes.

OPENING STATEMENT OF HON. ZACHARY T. SPACE, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF OHIO

    Mr. Space. Thank you, Mr. Chairman. I represent the 18th 
Congressional District in Ohio, a district that spans 16 
counties and covers almost a fifth of the State's geographic 
area. This district is composed of small towns and villages and 
rural areas and lies in the hills of Appalachia. Our largest 
town and throughout the district is Zanesville, Ohio, with 
about 25,000 people. And perhaps of most interest pertaining to 
today's hearing Ohio's 18th Congressional District encompasses 
five designated market areas. The Columbus market covers the 
majority of our counties, but in the north we pick up Cleveland 
and Akron. To the south, two of my counties are actually part 
of the Charleston-Huntington, West Virginia market. In the east 
two more of my counties are in the Wheeling-Steubenville 
market. And finally, Muskingum County is the sole county 
comprising the Zanesville market.
    This scenario makes the reauthorization of the Satellite 
Home Viewer Act of particular relevance to me and my 
constituents. I am looking forward to working with the 
subcommittee to address the complicated issues, many of which 
you mentioned in your opening statement, Mr. Chairman, that we 
will be talking about further today and specifically the local-
into-local component of the legislation as the Wheeling-
Steubenville market is one of a few dozen, I think 30, DMAs 
without local-into-local service.
    But thank you, Mr. Chairman. I yield back.
    Mr. Boucher. Thank you very much, Mr. Space. The gentleman 
from Georgia, Mr. Deal, is recognized for--I am sorry. The 
gentleman from Oregon, Mr. Walden, is recognized for 2 minutes.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Thank you, Mr. Chairman, and I appreciate your 
having this hearing. I will apologize up front. We also have an 
energy hearing going on at the same time. So I am going to have 
to bounce back and forth.
    At the outset, Mr. Chairman, I would like unanimous consent 
to insert into the record an opening statement from our 
colleague from Wyoming, Mrs. Lummis, she would like in there 
regarding satellite issues.
    Mr. Boucher. Without objection.
    [The prepared statement of Mrs. Lummis follows:]

                     Statement of Cynthia M. Lummis

    I greatly appreciate the opportunity to address this 
subcommittee on the issue of Designated Market Area (DMA) 
reform. While only one small part of the Satellite Home Viewer 
Extension and Reauthorization Act, DMA reform is critical for 
the advancement of local television content.
    The advent of satellite television ushered in a new era of 
video connectivity that for rural areas like my home state, 
made what had been previously impossible--multiple channel 
options and a clear picture--finally possible. This 
subcommittee deserves a great deal of praise for setting up a 
statutory and regulatory environment that has helped to protect 
local broadcasts while simultaneously allowing the satellite 
industry to corner 30 percent of the television viewing market. 
Not everything has worked perfectly, however. These are truly 
complicated issue, and they continue to change with each new 
technological breakthrough. As video technology evolves across 
all platforms, we can agree that the statutory and regulatory 
framework that governs them should evolve as well.
    Ensuring that local broadcasts and local content remained 
viable was an early goal of this subcommittee, and it continues 
to be a goal we all share. However, enough time has elapsed 
since syndicated exclusivity and network non-duplication rules 
were attached to each DMA that we have begun to understand the 
unintended consequences of those actions. The decision to use 
Neilson Media's local market area map to determine the 
boundaries of local market areas was not without merit. After 
all, the DMA system was intended to link together television 
viewers by geographic and cultural affinities, and Neilson's 
map accomplishes that goal in some cases.
    Unfortunately, it is also true that much of the DMA map 
makes little sense neither geographically, nor culturally. The 
problem is national, but Wyoming is the poster child of what is 
wrong with the DMA system. Sixteen of our twenty three counties 
are part of DMAs that originate out-of-state. Put differently, 
over 50 percent of Wyoming's television households are not 
eligible to receive Wyoming-originated programming, including 
news, weather, sports and emergency programming. I believe, and 
Wyoming's example illustrates, that the DMA system is an 
impediment to localism, not an aid.
    I am thankful both to Representative Mike Ross (D-AR), and 
to my predecessor, Representative Barbara Cubin (R-WY), who are 
responsible for early, important work on this issue. I am eager 
to continue that work with this subcommittee to craft a 
solution that retains the important and necessary work of our 
local broadcasts and content. I urge this subcommittee to take 
the necessary steps to ensure that television viewers in my 
state and around the Nation have access to their home state's 
television programming.
                              ----------                              

    Mr. Walden. And I would concur with my colleague from 
Illinois, Mr. Shimkus, two of the markets that serve my 
district also converted to digital, although one station in 
each market remained analog because of their corporate 
ownership decisions. We didn't have a signal phone call in my 
office about that conversion. And yes, we are listed in the 
phone book. The managers of the stations whom I spoke to 
repeatedly--in fact, I was in one of the markets when it 
occurred--they had a couple hundred phone calls. Predominantly 
it was about plugging in the box, rescanning the channels, and 
that was it.
    So I hope in the very near future, Mr. Chairman, we might 
have an oversight hearing on this issue, because I am not 
convinced that we need to spend 90 million on community 
organizers and another 650 million on converter boxes. It 
appears in markets where the conversion has taken place it has 
done so rather seamlessly and with little problem.
    In terms of this legislation, I look forward to working 
with you on the reauthorization of the Satellite Home Viewer 
Act. I know that I am not alone in concern out in the country 
about the local-into-local issue. It seems like when you 
represent a rural district with rural communities you are 
always sort of the last one considered, and I have got areas, 
for example, in Bend, Oregon, that still have not been able to 
get local-into-local. This is not a subject that you all are 
unaware of certainly, but it is one that I feel pretty strongly 
about.
    So I hope you will be able to address that in your comments 
or at some point in this legislation because it seems to me 
whether you live in New York or Bend, Oregon or Medford, 
Oregon, when it comes to Federal law you ought to be treated 
the same.
    So, Mr. Chairman, I look forward to working with you on 
this, and I yield back.
    Mr. Boucher. Thank you very much, Mr. Walden. The 
gentlelady from Colorado, Ms. DeGette, is recognized for 2 
minutes.
    Ms. DeGette. Thank you, Mr. Chairman. Mr. Chairman, I waive 
my opening statement in favor of extra time during questions. 
But I do want to mention that underscoring the fact that 
Colorado is ground zero for telecommunications, I have two 
constituents on this panel who I would like to welcome, Charlie 
Ergen, who will be testifying for DISH Network and Rick 
Rowland, who will be testifying on behalf of public TV. He is 
the CEO of Colorado Public Television. Thank you, Mr. Chairman.
    Mr. Boucher. Thank you very much.
    Ms. DeGette. And welcome to both of our witnesses.
    Mr. Boucher. Thank you very much, Ms. DeGette. Two minutes 
will be added to your questioning time. The gentleman from 
Louisiana, Mr. Melancon, is recognized for 2 minutes.
    Mr. Melancon. Thank you, Mr. Chairman. I would wish to 
waive my opening statement.
    Mr. Boucher. Mr. Melancon waives his opening statement. The 
gentlelady from Florida, Ms. Castor, is recognized for 2 
minutes.
    Ms. Castor. Thank you very much, Mr. Chairman. I will 
waive.
    Mr. Boucher. Ms. Castor waives her opening statement. The 
gentlelady from California, Ms. Matsui, is recognized for 2 
minutes.

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Matsui. Thank you, Mr. Chairman, and I also would like 
to congratulate you on assuming this chairmanship of this 
wonderful committee. I look forward to working with you. I 
would also like to thank today's panelists for sharing their 
expertise on this very complex issue.
    We are here today to begin the process to reauthorize the 
Satellite Home Viewer Extension and Reauthorization Act, which 
is set to expire on December 31st, at the end of this year. In 
the past, Congress has tried to ensure that as many households 
as possible have access to local television programming while 
expanding competition and consumer choice in programming and 
service providers. As we move forward, we should continue to 
advance these principles.
    In today's marketplace, we should encourage carriers to 
provide local television stations and news broadcasts to more 
and more customers. It is particularly important that consumers 
have access to local emergency broadcasts. Unfortunately, 
Californiais home to many natural disasters, such as 
earthquakes, flooding, and wildfires. Consumers need access to 
local emergency information when such events occur.
    I look forward to hearing from each of today's witnesses 
about how we can advance solutions that are effective and 
efficient.
    Thank you again for your leadership on this issue, Mr. 
Chairman. I yield back the balance of my time.
    Mr. Boucher. Thank you very much, Ms. Matsui. The gentleman 
from Georgia, Mr. Deal, is recognized for 2 minutes.

  OPENING STATEMENT OF HON. NATHAN DEAL, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Deal. Thank you, and I add my congratulations to you on 
your chairmanship. And I also welcome the witnesses and thank 
them for their attendance today.
    I am glad we are considering the reauthorization of the 
Satellite Home Viewers Act because it brings into focus one of 
the issues that has concerned me for a very long time, and that 
is the lack of true consumer choice in television viewing. As 
we all know, because DMAs, designated market areas, cut across 
State lines, hundreds of thousands of television households 
have little or no access to broadcast TV stations from their 
own State and therefore have very limited access to their State 
news, elections, government, and weather programming. And 
likewise, individuals who may live across a State or a DMA line 
but are part of a community on the other side of the line 
cannot receive the programming that matters to them. And as we 
have heard already today in these opening statements, this is a 
common concern that many of my colleagues share.
    Now, I understand the reasoning behind the drawing of the 
DMA maps, but it seems to me to be an archaic system. Depending 
on who you ask, broadcast TV viewers make up around 10 to 15 
percent of the total viewing audience. It seems odd that the 
other 85 to 90 percent of the television viewing audience is 
constrained by a system that is based on the viewing habits of 
a fraction of that 15 percent.
    Now, I understand the desire of broadcasters to control the 
distribution of their programming, but it seems rather absurd 
to me that in this day and age that consumers who are willing 
to pay are still prevented from watching the content that they 
desire. The free market has allowed technology to meet consumer 
demand for content in many ways outside of the world of cable, 
satellite, and broadcast TV. We should strive to foster a 
framework that allows the free market to meet consumer demands 
in an equally efficient way for television viewers, and I hope 
that this hearing will be a step in that direction.
    I yield back the balance of my time.
    Mr. Boucher. Thank you very much, Mr. Deal. The gentleman 
from New York, Mr. Weiner, is recognized for 2 minutes.
    Mr. Weiner. I waive my opening statement, except to offer 
my congratulations to you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Weiner. And we 
certainly welcome you as the new vice chairman of this 
subcommittee as well.
    The gentleman from California, Mr. McNerney, is recognized 
for 2 minutes.
    Mr. McNerney. Thank you, Mr. Chairman. I want to offer my 
congratulations for assuming the chairmanship of this exciting 
committee. As a person with a technical background, I am 
looking forward to learning about this issue from experts such 
as yourselves. And this is exciting. It is a dynamic and it is 
a critically important area.
    So I am looking forward to contributing to our national 
policy in this area. Thank you very much.
    Mr. Boucher. Thank you, Mr. McNerney. The gentleman from 
Nebraska, Mr. Terry, is recognized for 2 minutes.

   OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF NEBRASKA

    Mr. Terry. Thank you, Mr. Chairman. I appreciate that. And 
frankly, I want to start off by saying congratulations and I am 
pleased that you are chairman and you have a depth of knowledge 
and a universal respect within the telecom community. So I 
really appreciate you accepting that role.
    Digital conversion, I want to hear from you how that is 
going to impact or whether there should be policies we need to 
incorporate in this reauthorization. Like Mr. Shimkus, I had 
two stations out of five that converted on the 17th. Between 
station calls and then Nebraska set up our 211 to receive 
calls, there was something around 550 calls. Like Mr. Shimkus 
mentioned, probably well over 50 percent was helping people 
with their setup in the sense of learning how to scroll through 
or setting up the--I am just drawing a blank on the word right 
now--but easily resolved. And frankly, only about 10 were calls 
about I don't have a box and I don't have a coupon. What we did 
is pooled coupons before, so every one of those people received 
a coupon and a box that same day. So we were able to resolve 
every issue on the conversion.
    But I also, as I mentioned, want to hear how it impacts--
especially at the digital signal--and if there are still 
problems with the local broadcasters or is that being resolved 
with local-into-local. And I look forward to your testimony, 
and thank you all for being here.
    Mr. Boucher. Thank you. Thank you very much, Mr. Terry. The 
gentleman from Arkansas, Mr. Ross, is recognized for 2 minutes.

   OPENING STATEMENT OF HON. MIKE ROSS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ARKANSAS

    Mr. Ross. Thank you, Chairman Boucher, for holding this 
hearing and for allowing me, as a member of the full committee 
but not this subcommittee, to be here and to participate and to 
raise an issue that is extremely important to so many of our 
constituents.
    Across our Nation, many satellite and cable subscribers 
cannot receive the local channels of their home State because 
the current law specifies that stations be transmitted 
primarily within their designated market area, or DMA. However, 
these boundaries assigned by the Nielsen Media Research Company 
were designated 50 years ago. And many of these DMA boundaries, 
up to 47 percent by some estimates, cross State lines. This 
leaves millions of subscribers watching the local news, 
weather, and sports of their neighboring State and missing 
vital weather information about--and other information about 
the State in which they live, work and, may I add, pay taxes. 
We are essentially using 1950s laws to deliver 21st century 
technology.
    In the 110th Congress, I introduced legislation to remedy 
this problem, and I am currently drafting new legislation that 
will update our law and bring it into the 21st century by 
giving consumers access to their local channels.
    But let me be clear, I am not proposing to change the DMAs. 
I simply want to allow those who are receiving the local 
channels of a neighboring State the choice, the choice to also 
receive local channels from their home State. Satellite and 
cable subscribers should not be denied the freedom, the freedom 
to choose stations from their home States simply because of an 
outdated law. And I am hopeful that we can work together to 
provide all subscribers more choice and greater local content. 
I am also hopeful that the witnesses today will specifically 
address this issue in their comments.
    And I look forward to working with the committee and you, 
Mr. Chairman, to remedy this problem in this year's 
reauthorization. Thank you again for allowing me to be here, 
and I yield back the balance of my time.
    Mr. Boucher. Thank you very much, Mr. Ross. The gentlelady 
from Tennessee, Mrs. Blackburn, is recognized for 2 minutes.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Ms. Blackburn. Thank you, Mr. Chairman, and I add my 
congratulations to you. I want to welcome our panelists and the 
return of some of our panelists who are here to talk with us 
today on the issues that we have got in front of us. We have 
heard some of the problems that we have existing with accessing 
local programming.
    So I will submit my full statement and just add a couple of 
comments on this. In Tennessee, my constituents in the 
metropolitan areas are well served. There is no problem with 
accessing and having choices and expanded services. And, Mr. 
Ferree, I like the way you illustratively pointed that out in 
your written testimony, and we thank you for that.
    Let me mention, though, as some of my colleagues have, in 
our rural and underserved areas--I have two counties: Hardin 
and Henderson Counties. And there the citizens cannot receive 
the subscription video service from traditional cable 
programmers and they are limited to a weak or nonexistent 
broadcast signal as we are making the digital switch. But the 
DBS, the satellite service providers, they are the only game in 
town for some and they don't extend the local programming 
option for a variety of factors, whether it is policy or market 
driven factors. But this is something that we are going to need 
to address. These constituents of ours are frustrated. We 
understand this. I share that frustration with them.
    I also see it as an issue of safety, and this is one that I 
don't think my colleagues have raised yet today, so I will. We 
had a tornado last year: 30 dead, 150 that were injured. We 
know that that local programming is important. We want to work 
with you as we look at reauthorization and see how we best 
address this issue. It is one of convenience and enjoyment, but 
it is also one of safety. So we do want to hear from you on 
this.
    Thank you, Mr. Chairman, and I yield back.
    Mr. Boucher. Thank you very much, Mrs. Blackburn.
    The gentleman from Massachusetts, Mr. Markey, former 
chairman of this subcommittee, is recognized for 2 minutes.

OPENING STATEMENT OF HON. EDWARD J. MARKEY, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF MASSACHUSETTS

    Mr. Markey. Thank you, Mr. Chairman. I am chairing a 
hearing on energy upstairs as the former chairman of the energy 
subcommittee. A decade ago, Mr. Chairman, I successfully 
offered the local-to-local amendment that made it possible for 
direct broadcast satellite companies to offer consumers their 
local broadcast channels as part of a seamless satellite video 
service offering. This new legal ability dramatically increased 
the competitive prospects for the DBS companies against 
incumbent cable operators.
    The rise in subscribership to satellite service in urban 
and suburban America as a result of my local-to-local amendment 
had another beneficial consequence. It induced cable operators 
to invest heavily in greater bandwidth for additional channel 
capacity, enhanced picture quality, and to offer broadband and 
voice services in a headlong effort to distinguish its services 
in competition with DBS satellite.
    The point is that even if consumers stuck with their local 
friendly cable operator, such consumers have also benefited 
from the satellite competition this subcommittee fostered.
    In previous legislative consideration of these issues, 
questions have been raised about out-of-market signal carriage 
of broadcast signals, as well as the applicability of 
syndicated exclusivity, sports blackout, and network 
nonduplication rules that were adopted originally decades ago 
to protect the interests of free over the air broadcasters and 
the viability of their services. As the march of digital 
technology moves inexorably forward, it is appropriate to once 
again examine all of those issues so that our laws and 
regulations not only keep pace with changes in technology, but 
so that we may reassert policy support for the long held 
communications values of localism and diversity in a manner 
that embraces competition and innovation. The consumer 
ultimately should be the beneficiary of the policies we 
advance.
    I want to commend you, Chairman Boucher, for calling this 
important hearing this morning and the excellent panel of 
witnesses that I see down here. It is like Hall of Fame weekend 
as I look down: Mr. Ergen, Mr. Franks, Mr. Gabrielli, all of 
them who have helped us so much over the years in framing our 
policies.
    I yield back the balance.
    Mr. Boucher. Thank you very much, Mr. Markey.
    The gentleman from Connecticut, Mr. Murphy, is recognized 
for 2 minutes.
    Mr. Murphy. Thank you very much, Mr. Chairman. I look 
forward to the testimony, and I will submit my statement for 
the record.
    Mr. Boucher. OK. The gentleman waives his opening 
statement.
    The Chair asks unanimous consent for two matters. First, 
that a written statement prepared by National Programming 
Service, which distributes distant network signals to the 
subscribers of the DISH Network, be submitted for the record. 
Without objection, so ordered.
    [The information was unavailable at the time of printing.]
    Mr. Boucher. And also that all members of this subcommittee 
may submit their prepared written statements for the record. 
And without objection, so ordered.
    We now turn to our panel of witnesses. And just as the 
gentleman from Massachusetts has welcomed our witnesses, I want 
to do the same and note that they have worked with us 
cooperatively and very constructively for a number of years as 
we have adopted the Home Satellite Viewer Act, the Home 
Satellite Viewer Improvement Act with its local-into-local 
opportunities, and now as we reauthorize the Home Satellite 
Viewer Act are with us again. So they are old hands at this 
subject matter, and we very much welcome them here this 
morning. Mr. Charles Ergen is the Chairman, President and Chief 
Executive Officer of DISH Network Corporation. Mr. Martin 
Franks is Executive Vice President of Policy Planning and 
Government Relations for the CBS Corporation. Mr. Bob Gabrielli 
is the Senior Vice President for Broadcasting Operations and 
Distribution for DIRECTV. Mr. Willard Rowland is the President 
and Chief Executive Officer of Colorado Public Television. He 
testifies today on behalf of the Association of Public 
Television Stations. Mr. James Yager is the Chief Executive 
Officer of Barrington Broadcasting Group. He testifies on 
behalf of the National Association of Broadcasters. Ms. Gigi 
Sohn is the President of Public Knowledge, a very respected 
public interest group. She testifies today on behalf of Public 
Knowledge, the Consumers Union, and Free Press. Mr. Kenneth 
Ferree is the President of another respected public interest 
group, the Progress and Freedom Foundation.
    And we welcome each of our witnesses. Without objection, 
your prepared written statements will be made a part of the 
record, and we would welcome your oral summaries and ask that 
you try to keep those to approximately 5 minutes so that we 
will have plenty of time for questions, of which I am sure 
there will be many.
    And, Mr. Ergen, we are pleased to begin this morning by 
hearing from you.

 STATEMENT OF CHARLES W. ERGEN, CHAIRMAN, PRESIDENT, AND CHIEF 
         EXECUTIVE OFFICER OF DISH NETWORK CORPORATION

    Mr. Ergen. Thank you, Chairman Boucher, Ranking Member 
Stearns, and members of the subcommittee. I appreciate the 
opportunity to testify today. My name is Charlie Ergen, and I 
am the Chairman and CEO of DISH Network, the Nation's third 
largest paid TV provider.
    We are in the middle of a digital transition that is 
changing the way people watch TV. It is pretty simple. People 
want to watch what they want to watch, when they want, and 
where they want. And as TV evolves, there are some things that 
no longer make sense for consumers under today's laws.
    First, many consumers can't get local news and sports in 
their home State because of the way local markets are defined.
    Second, many rural communities are missing one or more of 
the four major networks.
    Third, consumers are losing their local stations during 
disputes over retransmission consent.
    And fourth, consumers suffer when must-carry stations have 
little or no local content.
    It is our hope that all these challenges can be fixed as 
part of the SHVERA reauthorization this year. The digital age 
has arrived and the laws need to catch up. On DMA reform, many 
of your constituents are being denied access to news, weather, 
and election coverage from their home State.
    For example, depending on where a customer lives in 
Indiana, from the map over here, they may get local news from 
Indiana, Illinois, Kentucky, or Ohio. As you can see from the 
map, defining local map based on DMA does not make sense from a 
consumer perspective. This is an issue in 45 States. The 
Copyright Office recognized this problem in their report last 
year. Paid TV providers should be allowed to bring in a 
neighboring broadcaster and consumers should be able to 
determine what local means to them.
    With respect to missing network affiliates, DISH Network 
provides local service in 178 markets today, reaching 97 
percent of households nationwide. This translates into over 
1,400 local broadcast stations, which is far more than any 
other pay TV provider. In most of the remaining markets, one or 
more of the four networks is missing.
    The Copyright Office has highlighted this problem in its 
report. We agree with the Copyright Office that all consumers 
should have access to NBC, CBS, ABC, and FOX programming. If a 
local community is missing one of the Big Four network 
stations, pay TV providers should be able to treat a nearby 
affiliate as the local affiliate under copyright and 
communications law.
    On retransmission consent reform, a broadcaster used to 
negotiate with a single cable company and the leverage was 
relatively equal. But today, DISH Network customers and others 
are held hostages as broadcasters play their local monopoly off 
against multiple pay TV providers. In 2008 alone, consumers 
lost programming in approximately 15 percent of our markets 
because of retransmission consent disputes. This is a huge 
increase over prior years, and the problem continues to get 
worse.
    Today, stations in seven of our markets remain down because 
of unreasonable demands from Fisher Communications. Yet 
broadcasters provide the same content for free on the Internet 
and those lucky enough to live within the shrinking areas of 
digital over-the-air coverage.
    Because broadcasters receive billions of dollars of 
spectrum for free, we think retransmission consent should be 
free. Failing that, we support the creation of a national 
retransmission consent rate, which would apply to all 
broadcasters and all paid TV providers. Treat a monopoly like a 
monopoly. Satellite providers already pay a fixed per 
subscriber copyright royalty rate, and we see no reason why a 
similar concept can't work for retransmission consent.
    As a second alternative, we support the creation of an 
actual market. If a broadcaster threatens to drop programming, 
paid TV providers should be able to get a nearby affiliate to 
fill the gap. Consumers should never have to wonder what 
happened to Sunday Night Football.
    Finally, on must-carry, we are forced to carry hundreds of 
stations today that have little or no local content. This 
increases our cost, raises our prices to consumers at a time 
when consumers need all the disposable income they can get. 
Must-carry stations should be required to earn carriage by 
offering at least 20 hours of local programming each week. This 
is beneficial to consumers and has no harmful effect on 
broadcasters that invest in their local market.
    Each of these four issues can be addressed within the 
structure proposed by the Copyright Office. Specifically, a 
unitary compulsory copyright license for all pay TV providers 
would give Congress the chance to make sure all consumers get 
the services they need in a digital world in a manner that is 
fair to copyright holders, broadcasters, cable and satellite.
    The Copyright Office recognizes that TV has changed 
fundamentally and incremental changes to outdated rules are not 
good enough. We encourage you to review the recommendations and 
act boldly on behalf of your constituents.
    Thanks again for allowing me to testify.
    [The prepared statement of Mr. Ergen follows:]





    Mr. Boucher. Thank you very much, Mr. Ergen. Mr. Franks, we 
will be pleased to hear from you.

   STATEMENT OF MARTIN D. FRANKS, EXECUTIVE VICE PRESIDENT, 
   POLICY, PLANNING AND GOVERNMENT RELATIONS, CBS CORPORATION

    Mr. Franks. Thank you, Mr. Chairman.
    Mr. Boucher. And we need the microphone.
    Mr. Franks. Sorry. Thank you, Mr. Chairman and members of 
the committee.
    First, let me congratulate the committee on a remarkable 
legislative success story. Twenty-one years ago, prodded by 
Chairman Boucher and others through the original Satellite Home 
Viewer Act, Congress began a process which has resulted in a 
robust video distribution and programming marketplace which 
happily has made the local cable monopoly a relic of the past. 
There are many winners from Congress' vision in this aspect of 
the video marketplace, but none bigger than the American 
consumer.
    The legislative issue on the table today is really a very 
narrow one, whether to extend satellite's compulsory distance 
signal license once again. In contrast, the local-into-local 
license is permanent and not part of this debate. Yet during 
the course of congressional deliberation over the distance 
signal license, you will hear from parties seeking to exploit 
this legislation as a vehicle for a wish list of unrelated 
items such as changes to retransmission consent or DMA 
modification. Besides complicating the legislative process, the 
issues of retrans and DMA modification are not broken and do 
not need fixing.
    Each year, CBS and other television broadcasters conclude 
hundreds of retransmission consent agreements with cable, 
satellite, and telephone operators. In an overwhelming majority 
of such instances, agreements are reached quietly, amicably and 
in a mutually beneficial manner. Infrequently, a dispute erupts 
at least initially and both sides threaten the disruption of 
service. Even more infrequently, a very small handful of those 
disputes lead to a short-term disruption. Legislating to deal 
with a few disputes against a pattern where there are literally 
hundreds of instances where willing sellers and willing buyers 
successfully reach agreement would be a solution in search of a 
problem. In the end, the retransmission consent regime works 
and in the manner Congress intended.
    As for DMAs, they are not a governmental creation. Rather 
they are a product of Nielsen Media Research, which groups 
counties by viewing patterns and the laws of physics and signal 
propagation rather than geographic boundaries. DMAs are the 
center of a broadcaster's economic universe. And any tinkering 
with the system, even in good economic times, could be 
financially seismic, not only for smaller local broadcasters 
but also for local merchants who buy time on their local 
stations in order to reach potential customers in their local 
areas without competing and confusing ads coming into the 
market from a station 100 or 1,000 miles away. But if the 
desired outcome is for viewers to access news from their out-
of-market but in-state television stations, right now, without 
the need to change any law or redefine any DMA, MVPDs may 
already import any station's newscast into any other market 
simply by securing the imported station's permission to do so. 
Stations control the copyright of their news programming and 
can make them available to multi-channel providers in nearby 
markets looking to augment news programming.
    We are prepared to work on any problem areas where there 
may be issues with regard to local and in-state news. But 
please do not fall for the masquerade of those who are using 
DMA reform as a proxy for their real objective, a means for 
MVPDs to obtain bargaining leverage in a retransmission content 
regime that is now in nearly perfect balance.
    Please also remember that television broadcasters have the 
right to the copyright and communications acts and private 
contracts to control the distribution of the national and local 
programming they transmit. The CBS television network alone 
invests billions of dollars each year to deliver the highest 
quality news, sports and entertainment programming. We are not 
complaining. We strongly believe that our heavy investment in 
programming pays off. Superior programming generates viewing 
that helps not only the CBS network in our owned and operated 
television stations, but also our affiliated stations 
nationwide. When network programming is of high quality and 
compelling, local stations benefit because they sell 
advertising within the network programming. That allows them to 
make significant financial investments in local news, sports, 
weather, and other programming, including syndicated shows like 
Wheel of Fortune, Jeopardy, and Oprah, some of your 
constituents' favorite programs.
    This network affiliate, national and local arrangement, of 
course, is not unique to CBS. It is also enjoyed by the other 
networks, including Univision and Telemundo, and their 
affiliated stations across the country. In the end, however, it 
is local viewers who benefit most from this system.
    Mr. Chairman, again I would like to thank the Committee for 
helping to steer our industry through the complex technical and 
market conditions to get us where we are today, a robust video 
delivery marketplace where thanks to vigorous competition, 
broadcast television is still an integral player deeply valued 
by American viewers. We look forward to working with the 
committee to preserve and advance the role of broadcast 
television in that extremely competitive marketplace.
    Thank you.
    [The prepared statement of Mr. Franks follows:]



    Mr. Boucher. Thank you very much, Mr. Franks. Mr. 
Gabrielli.

STATEMENT OF BOB GABRIELLI, SENIOR VICE PRESIDENT, BROADCASTING 
           OPERATIONS AND DISTRIBUTION, DIRECTV, INC

    Mr. Gabrielli. Thank you. Chairman Boucher, Ranking Member 
Stearns, and members of the subcommittee, thank you for the 
opportunity to testify.
    My name is Bob Gabrielli, Senior Vice President for 
Programming Operations and Distribution at DIRECTV. On behalf 
of more than 17 million customers, I offer the following 
suggestions for updating SHVERA. First, Congress should retain 
and modernize the distance signal statutory license. Second, 
Congress should improve consumer access to local stations. 
Third, Congress should not require satellite subscribers to 
bear the burden of nationwide mandatory carriage. And fourth, 
the retransmission consent system should be modernized to 
protect consumers from high prices and withheld signals.
    To begin, I would like to discuss the distance signal 
license. Today, the vast majority of subscribers get network 
programming from local, not distance stations. Only about 2 
percent of satellite subscribers receive distance signals, but 
those subscribers rely on distance signals to receive network 
programming and many will continue to do so into the future. 
Congress should thus renew the distance signal license. It 
should also modernize the license to make it simpler and to 
protect consumer access to network programming. In particular, 
it should ensure that consumers in markets missing one or more 
local affiliates have access to network programming through 
distance signals.
    Next, let me discuss DMAs. Millions are unable to receive 
truly local news and sports and entertainment because they live 
in one State while their DMA is mostly in another State. For 
example, viewers in Fulton County, Pennsylvania, are assigned 
to the Washington, D.C. DMA. As a result, they do not receive 
any Pennsylvania-based local programing.
    Five years ago, SHVERA addressed a handful of these 
situations by creating special rules. The time is right for a 
more general approach. Congressman Ross has a proposal allowing 
delivery of neighboring stations to households in these orphan 
counties like Fulton County. DIRECTV endorses this effort. Time 
and again, consumers tell us what local channels best meet 
their needs. Where possible, we should be able to meet those 
demands.
    I would like to now discuss local carriage. Satellite is an 
excellent medium for distributing national programming to even 
the most remote locations, but it is far more difficult to 
deliver thousands of local network stations from a handful of 
satellites in space.
    Congress recognized the difficulty of this task when it 
created the carry-one/carry-all rule. We have nonetheless made 
extraordinary progress in offering local programming. Our track 
record speaks for itself. We have spent billions of dollars to 
provide local service and now offer local television by 
satellite to 95 percent of households, and we intend to add six 
more markets by the end of this year.
    Using the FCC calculations, over 80 percent of our 
satellite capacity is now devoted to this local service, nearly 
triple the amount cable operators are required by law to carry. 
This is because, unlike cable, we have to rebroadcast identical 
network programming hundreds of times throughout the country. 
For the 5 remaining percent of households, we now offer a local 
seamless solution. We will install a rooftop antenna and tuners 
that integrate local broadcast signals into a set top box. To 
our subscribers, offer signals will appear and function exactly 
as any other channel on the guide, in the DVR, et cetera.
    If the broadcasters made their signals available throughout 
the DMA, every DIRECTV subscriber could receive local channels 
in this fashion. This simple investment in repeaters and 
translators by broadcasters would be the fastest and most 
efficient way to achieve the goals of H.R. 927.
    Last, I would like to discuss the retransmission consent. 
Congress created the must-carry/retransmission consent regime 
before we even offered local channels. The regime functioned 
until recently in part because of the equilibrium that existed 
between monopoly broadcasters and monopoly cable operators. But 
as satellite emerged, broadcasters found their relative 
bargaining power increased.
    Today, the market is tilted even more heavily in favor of 
broadcasters. Each has at least three competitors with whom to 
negotiate government-protected exclusive control over their 
content and public air waves they use for free.
    At the same time, new private equity investors have 
pressured broadcasters to increase rates. 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. In fact, the opposite 
appears to be true. Many broadcasters are producing less and 
less local news, while others have replaced local programming 
with national infomercials.
    DIRECTV willingly pays for high-quality content. We think 
programmers deserve fair and reasonable compensation for the 
product they create, but it does not serve the American public 
if the broadcasters have the unfettered ability to raise rates 
without any obligation to provide local content.
    We would like to work with you to establish a new rate 
transmission consent policy that compensates broadcasters 
fairly for its investment in high quality content yet protects 
consumers from withheld services.
    In closing, millions of your constituents throughout 
America, whether they are satellite or not, are better off 
because of the legislation this committee has championed over 
the years. I ask you to keep those consumers in mind as you 
consider SHVERA reauthorization this year.
    Thank you.
    [The prepared statement of Mr. Gabrielli follows:]



    
    Mr. Boucher. Thank you, Mr. Gabrielli.
    Mr. Rowland.

   STATEMENT OF WILLARD ROWLAND, PRESIDENT AND CEO, COLORADO 
   PUBLIC TELEVISION, ON BEHALF OF THE ASSOCIATION OF PUBLIC 
                      TELEVISION STATIONS

    Mr. Rowland. Thank you, Mr. Chairman and Ranking Member 
Stearns, for inviting me to testify today on behalf of Colorado 
Public Television in Denver and the Association of Public 
Television Stations.
    As an aside, at the outset I might note that this is 
probably a first in the history of communications policymaking 
in which a humble public broadcaster is sitting here situated 
in the middle of the panel between all of these distinguished 
members of the broadcast and telecommunications media to my 
right and left. Perhaps, indeed, this means change is in the 
air.
    The reauthorization of SHVERA is of great importance to my 
station and the 364 local public television stations across the 
country. KBDI is located in Five Points, the historically 
African American and Latino neighborhood of north Denver, and 
over the years, under the banner ``World View, Community 
Voice,'' we have developed a wide range of local and 
international programming that serves 85 percent of Colorado's 
population.
    There are three SHVERA reauthorization issues of particular 
interest to public television stations: multicast carriage; 
local-into-local; and the reach of public television Statewide 
networks.
    Public stations nationwide were early adopters of digital 
technology and have been at the forefront of maximizing the new 
digital capacity to serve our core missions of localism, 
education, and diversity. My station in Denver currently offers 
three multicast streams and plans to offer more. In addition to 
our traditional mix of local and national public affairs and 
cultural programming on one channel, we provide a documentary 
service and an international stream featuring news, foreign 
affairs, and arts programs.
    Without multicast carriage, this rich educational content 
made available through digital technology is lost. Given the 
complexities of multicast carriage, we prefer voluntary market-
driven arrangements with multi-channel video providers, such as 
those we have already reached with cable, Verizon, and DIRECTV. 
The DIRECTV agreement proves that a mutually beneficial 
creative approach is possible involving high-definition, 
multicast standard definition, and video-on-demand options. 
Such an approach provides viewers with a full array of public 
television's high quality digital content while respecting the 
capacity constraints of DBS providers.
    However, after years of unsuccessful attempts to reach a 
similar private agreement with Dish Network, we have no choice 
but to conclude that there is a market failure, and it is time 
for the Federal Government to intervene to ensure that Dish's 
14 million customers have access to the full benefits of their 
local public television stations' digital offerings.
    As she noted today, Congresswoman Eshoo introduced H.R. 
4221, which would mandate DBS coverage of public television 
stations' complete digital signals where no private agreement 
between the DBS provider and the local station has previously 
been reached. We are delighted that Representative Eshoo is 
going to reintroduce this legislation. We applaud her 
initiative and urge that this important legislation be 
incorporated as part of the SHVERA reauthorization.
    Turning to local-into-local, SHVERA does not require that 
DBS providers carry local broadcasts in all the areas they 
serve. As a result, viewers in more than 50 smaller and often 
rural markets cannot receive even the primary offerings of 
their local public television stations through one or both DBS 
providers.
    Public television is strongly and irrevocably committed to 
the principle of localism. As stations transition to digital-
only broadcasting and invest in greater local services, 
carriage by all multi-channel video providers is critical. 
Public television calls on Congress to ensure that DBS 
customers in every market are able to view through some 
mechanism the offerings of their local public television 
stations as soon as reasonably practicable.
    The final SHVERA issue for us involves Statewide or 
regional public television networks charged by statute or 
mission with reaching all viewers in their State or region. 
Because the SHVERA carriage regime is based on the DMA system, 
many of these networks cannot be carried by DBS providers in 
certain portions of their States because they do not have full 
power transmitters in each DMA.
    The most glaring example is with our neighboring Wyoming 
Public Television, which reaches only 45 percent of the State's 
population through DBS carriage. But this problem affects State 
or regional public television networks in at least 18 States. 
It is our hope that public television can work closely with the 
committee to solve this problem.
    Finally, Mr. Chairman, I would be remiss if I did not 
stress the importance of Federal funding for public 
broadcasters. Federal funding is more critical now than ever 
before as public stations are rolling out their new digital 
services while facing the greatest economic challenge in their 
42-year history. We ask this authorizing committee to support 
increased Federal funding to offset the projected 15 percent 
declines in other sources of funding.
    Again, thank you, Mr. Chairman, for inviting me to 
participate in today's hearing. I look forward to answering any 
questions you might have.
    [The prepared statement of Mr. Rowland follows:]



    
    Mr. Boucher. Thank you very much.
    Mr. Yager.

   STATEMENT OF K. JAMES YAGER, CEO, BARRINGTON BROADCASTING 
     GROUP, LLC, ON BEHALF OF THE NATIONAL ASSOCIATION OF 
                          BROADCASTERS

    Mr. Yager. Chairman Boucher, Ranking Member Stearns, and 
members of the subcommittee, thank you very much for having me 
here today. My name is Jim Yager, and I am the CEO of 
Barrington Broadcasting, which owns and operates 21 television 
stations in 15 small- to mid-size markets. I am also the 
chairman of the Television Board of the National Association of 
Broadcasters.
    Ever since Congress crafted the original Satellite Home 
Viewer Act of 1988, it has worked to further two objectives: 
first, that free over-the-air television will remain widely 
available to American households; and, second, that satellite 
re-transmissions will not jeopardize the strong public interest 
in maintaining vibrant local television services. Those two 
goals remain paramount today.
    Our Barrington stations keep our communities informed and 
connected. We work every day to embody the spirit of localism 
which Congress has affirmed time and time again as a vital 
public policy goal. We do not charge our viewers to watch our 
programs, rely on payments from advertisers to deliver a free 
service to our constituents.
    Without free, over-the-air television, cable and satellite 
companies would essentially be unrestrained in their ability to 
charge subscribers even higher prices. Broadcast television 
stations remain the primary source of the most diverse and 
popular entertainment, news, weather, and sports programming in 
the country. In fact, according to data from Nielsen Media 
Research, in a 2007-2008 television season, 488 of the top 500 
prime time television programs were broadcast on over-the-air 
television.
    While these stations represent a relatively small number of 
channels of those on cable and satellite systems, broadcast 
stations offer a unique and valuable service to their local 
markets that could be undermined by unnecessary changes to the 
law.
    As Congress considers updates to SHVERA, it is vital that 
you uphold the strength and tradition of localism. Any changes 
should not impair enforcement of program market agreements that 
are essential to local broadcast service.
    Furthermore, this committee should strengthen localism by 
phasing out satellite licensing for distant signals. The 
license should be replaced with a requirement for local-into-
local carriage in all television markets which would enhance 
localism, programming, and price competition, and increase 
viewer choice.
    To assist viewers in this difficult economic climate, 
Congress should mandate local-into-local satellite service in 
every market. I would like to thank Congressman Stupak for the 
introduction of legislation to accomplish this goal.
    There are 31 of 210 television markets in small and rural 
areas like Marquette, Michigan, that the satellite companies do 
not serve. They have said that this is a capacity issue, but I 
believe it is quite simply a business decision on their part. I 
am certain that, if Congress does not step in, the satellite 
companies won't ever provide local service to every market in 
this country.
    Broadcasters have invested well over $1 billion in making 
the transition to digital television. So far, there is very 
little economic return on that investment. Nevertheless, those 
investments are still in the public interest. The satellite 
industry's investment to provide local-into-local service to 
all Americans would also be in the public interest.
    Localism is at the forefront of broadcaster operation. In 
emergency situations, it is the broadcaster, not the cable or 
satellite companies, who is on the scene providing the public 
with the emergency, life-saving, and timely information it 
needs. Localism is not in cable or satellites's DMA or their 
business models.
    Some Members of Congress have expressed frustration that 
their constituents do not have the access to in-State but out-
of-market broadcast stations. Current law allows cable and 
satellite systems to offer nonduplicating, out-of-market 
programming to their subscribers, but many cable and satellite 
systems choose not to do so. However, Congress should not 
change current law to allow cable and satellite companies to 
offer network and syndicated programming that is identical to 
programming already offered by the local broadcasters with 
rights to that market. Doing so would be inconsistent with the 
long-standing principle of localism and the carefully balanced 
system of retransmission consent that was established by 
Congress to further this principle.
    If the retransmission consent rights of an in-market 
station were undercut by the importation of distant in-State 
duplicating signals, the economic basis for the local 
broadcaster service to the public would be eroded, and the 
public, in my opinion, would be harmed.
    Thank you for giving me this opportunity to testify. I 
welcome your questions following the panel.
    [The prepared statement of Mr. Yager follows:]



    
    Mr. Boucher. Thank you very much, Mr. Yager.
    Ms. Sohn.

  STATEMENT OF GIGI B. SOHN, PRESIDENT AND CO-FOUNDER, PUBLIC 
KNOWLEDGE, ON BEHALF OF PUBLIC KNOWLEDGE, CONSUMERS UNION, AND 
                           FREE PRESS

    Ms. Sohn. Chairman Boucher, let me extend my hearty 
congratulations to you.
    Ranking Member Stearns, members of the subcommittee, thank 
you for inviting me to give a consumer perspective on the 
reauthorization of SHVERA.
    As Congress considers renewing satellite compulsory 
licenses, it should repair the current fragmented regulatory 
structure by accomplishing three goals: one, treat all those 
who retransmit broadcast content and signals equally; two, 
ensure special protections given to broadcasters do not result 
in unfair licensing terms for multi-channel video providers, or 
MVPDs; and three, move toward a world without restrictive 
distant signal regulations.
    The current patchwork of laws and regulations unnecessarily 
differentiates between types of providers, restricts the 
availability of content to consumers, and sets the stage for 
discriminatory pricing.
    I have three recommendations: first, unify the regulatory 
and licensing systems for MVPDs. While at one time there may 
have been justification for maintaining separate structures for 
cable and satellite retransmission, that time is passed. 
Disparities in treatment of cable systems and satellite 
services are a result of historical and technical factors that 
are no longer relevant. In its report on SHVERA, the Copyright 
Office emphasized that regulatory parity between MVPDs is ``a 
good governmental goal of the first order.''
    It is time to level the playing field, not just between 
these services but also for new types of MVPDs, including those 
who deliver content through the Internet. Allowing Internet-
based MVPDs to voluntarily join this regulatory scheme could 
provide much needed competition. Congress should therefore 
create a single unified structure for all MVPDs, extending the 
benefit of the compulsory license to any that opt in and meet 
their regulatory obligations, including local carriage 
requirements.
    In addition, no provider should be subject to a 5-year 
reauthorization cycle. This presumably means that satellite 
providers, like cable providers, would be required to carry all 
local broadcast stations, a fair trade for significant 
regulatory relief.
    Second, reform retransmission consent rules to promote 
competition and eliminate unfair price discrimination.
    And, Mr. Chairman, I would take issue that retransmission 
consent rules are unrelated to SHVERA. I would say that the 
problems with retransmission consent are directly related to 
restrictions on distant signals and the combination of the two 
produces anti-competitive results.
    The rules create an imbalance that allows powerful 
broadcasters to engage in discriminatory pricing or tie in 
carriage of unrelated stations, raising prices for customers 
and harming the ability of smaller MVPDs to compete. 
Unfortunately, most broadcaster-MVPD agreements are not public, 
preventing anyone from determining the scope of these 
discriminatory practices. Therefore, first and foremost among 
Congress's remedies should be transparency in retransmission 
consent deals.
    But Congress should go farther, for instance, by requiring 
that retransmission consent licenses be on reasonable and 
nondiscriminatory terms. Even more effective would be a 
statutory retransmission consent license that parallels the 
copyright license for broadcast retransmission. This would 
ensure price parity among MVPDs, eliminate troubling tie-in 
arrangements, and prevent broadcasters from withholding 
important local content as leverage against smaller video 
providers.
    Third, move toward eliminating distance signal protection. 
Distance signal protection is an anachronism in an Internet 
age, where consumers who have Internet access can view content 
that is not restricted by State lines or artificial market 
areas. Attempts to force subscribers to watch only local 
stations is doomed to fail.
    More pressingly, current rules create situations in which 
satellite providers are unable to provide customers with the 
local broadcast channels that are most relevant to their lives 
because they originate in a different DMA.
    Over the long term, Congress should work toward eliminating 
distant signal restrictions. MVPDs should be free to respond to 
customer desires and offer, in addition to local stations, 
other stations from wherever they broadcast.
    In the short term, however, Congress should fix the 
immediate problems caused by DMA-based and distant-based 
restrictions on MVPD retransmissions. At a minimum, the rules 
should be relaxed to allow retransmissions of any in-State 
signals, stations from neighboring areas, and any missing 
networks.
    Finally, I urge the subcommittee to reject efforts to make 
SHVERA a vehicle for unrelated changes to copyright and 
communications law.
    I would like to thank the chairman, the ranking member, and 
this subcommittee again for giving me the opportunity to 
testify today.
    [The prepared statement of Ms. Sohn follows:]



    
    Mr. Boucher. Thank you very much, Ms. Sohn.
    Mr. Ferree.

STATEMENT OF W. KENNETH FERREE, PRESIDENT, PROGRESS AND FREEDOM 
                           FOUNDATION

    Mr. Ferree. Thank you, Chairman Boucher and Ranking Member 
Stearns, and thank you to members of the committee.
    I am Ken Ferree, president of the Progress and Freedom 
Foundation, a think tank here in Washington that is focused on 
studying the digital economy.
    Today's hearing is about the reauthorization of the 
Satellite Home Viewer Act, but in fact, this discussion we are 
having is really about a much larger debate about how and 
whether traditional media platforms will thrive in the emerging 
media world.
    The evidence is all around us. The days of force-feeding 
consumers media selected for them by monopolistic or near 
monopolistic operators is over. The gems of traditional media, 
the dominant daily newspapers, are losing prescribers at 
precipitous rates. The doyen of electronic media, terrestrial 
radio, has been in extremis for years. Its progeny, satellite 
radio, too, is struggling in a world of media abundance and 
consumer choice.
    Broadcast television ratings are a fraction of what they 
once were, and prime content is now migrating not only to 
multi-channel platforms such as cable and DBS but also to a 
platform with essentially infinite capacity and flexibility: 
the Internet, of course. And, thus, the relative newcomers in 
the media landscape, the multi-channel systems, also have a 
sharp eye on technological developments that may threaten their 
business models.
    So, as we talk today about distant signal importation, DMA 
boundaries and the like, we need to bear in mind that the 
technological workarounds to most any restriction already 
exist, and consumers are learning to use them with more and 
more facility every day. Allow me to highlight one example.
    Under existing rules, DBS systems make local signal 
determinations based on DMA boundaries. I don't pretend to 
understand the intricacies of how DMAs are developed or why 
they were chosen for this purpose, but I do know that because 
DMA boundaries and State political boundaries are not 
coterminous, there are a number of markets where television 
viewers receive their local broadcast services via satellite 
from neighboring States rather than their home State.
    As chief of the FCC's media bureau from 2001 to 2005, I 
heard numerous complaints about just this problem, and I have 
to say, I have some sympathy for those subscribers.
    As a practical matter, of course, technological innovation 
is rendering obsolete many of the restrictions that protect 
marketplace exclusivity. A new class of Web sites and services, 
including NetFlix, Hulu, Amazon Video on Demand, iTunes, and 
Vuze, are changing the way we view broadcast television.
    Moreover, it is increasingly easy for consumers to view 
content from any geographic market directly on Internet-ready 
televisions or through the use of set-top box devices, such as 
NetFlix Player, TiVo, or Slingbox, and through popular game 
consoles like the Xbox 360 and the PlayStation 3.
    In short, time and geography increasingly are meaningless 
concepts with respect to video content. If traditional 
platforms, including DBS systems, are to thrive in this 
competitive market, it makes little sense to hamstring their 
ability to provide viewers in-State stations based on the 
vagaries of DMA boundaries.
    Similarly, it is increasingly difficult to justify carriage 
burdens on traditional media. I have read recently of 
legislative proposals that would require satellite operators to 
carry local television stations in even the smallest markets 
using satellite capacity rather than some other delivery 
mechanism.
    Now, there are only two ways in which a satellite company 
might comply with such a mandate: It could add the capacity; 
that is assuming it is physically possible given spectrum 
constraints. Or, it may convert capacity currently used for 
other more highly demanded programming services. Neither 
approach makes economic sense.
    Moreover, carriage requirements impose significant burdens 
on the First Amendment rights of those bound by them. In the 
current environment, imposing enhanced carriage mandates on DBS 
would be unwarranted, economically indefensible and 
unconstitutional.
    Thank you, Mr. Chairman, for the opportunity to testify 
today. I look forward to your questions.
    [The prepared statement of Mr. Ferree follows:]



    
    Mr. Boucher. Thank you, Mr. Ferree.
    And thanks to each of the witnesses for your very 
thoughtful comments here this morning, and we look forward to 
continuing our conversations with you as we continue with our 
work on reauthorizing the law.
    Mr. Gabrielli, I am going to pose a question to you, and I 
also intend to pose it to National Programming Service that 
delivers out-of-market signals as well. I understand that you 
have about 800,000 subscribers to your out-of-market signal 
service.
    Mr. Gabrielli. That is correct, Mr. Chairman.
    Mr. Boucher. And I wonder if you know, and if you don't 
know this morning, if you can do the research and inform us, of 
the number of subscribers among that 800,000 who reside in 
places where there is currently local-into-local service. There 
are two grandfather provisions in the law that under two 
different sets of circumstances allow the residents of markets 
that have local-into-local service to continue to receive 
distant signals or to opt to receive them instead. And I wonder 
if you know how many people living in those local-into-local 
markets are receiving distant signaling, or if you could find 
that out for us.
    Mr. Gabrielli. I don't know offhand.
    But there is a question, there is the grandfathered 
customers who had distant signals before we carried locals and 
who opt to keep them. But there are also those customers in 
markets like Lafayette who receive the one local station and 
receive the other networks via distant network. They are part 
of the 800,000. So I will try to break out those that receive 
networks where they are fully covered by locals but choose to 
receive distance.
    Mr. Boucher. Well, we call that latter situation short 
markets, where there is really only--where not all of the 
networks have local affiliates within that market. And that is 
kind of a special case. But carve that out also. Give us those 
numbers, if you can. And we are very interested in knowing the 
numbers of subscribers you have for out-of-market signals and 
areas where there is full local-into-local service with all 
networks represented in that market. So if you could send that 
to us, that would be very helpful.
    Mr. Gabrielli. We can do that, sir.
    Mr. Boucher. Thank you very much.
    Mr. Yager, you have recommended that the section 192 
license be eliminated coincident with the statutory requirement 
that local-into-local service be provided in all of the 210 
local television markets. If that were to be adopted, what 
would you do in the situation where, as Mr. Gabrielli has just 
described, there are markets where not every network is 
represented by a local affiliate in that market, so-called 
short markets? Would you permit the importation of a distant 
signal into those markets for the network that does not have a 
local affiliate in that market?
    Mr. Yager. I am unaware of all of these markets that 
supposedly don't have a full network service.
    Mr. Boucher. Well, there are a number of them.
    Mr. Yager. But in regard to that, let me say that I think 
we have to come up with a local service. We have to maintain 
local-into-local.
    Mr. Boucher. I understand that, Mr. Yager. But my time is 
limited, and the question is today we don't have it everywhere. 
And even if you mandate it, you are still going to have markets 
where not all networks are not represented with local 
affiliates. What do you do in a situation like that?
    Mr. Yager. Well, we have significantly viewed status right 
now for many of those.
    Mr. Boucher. That doesn't cover it all, either. OK. Why 
don't you perhaps submit to us an answer in writing?
    Mr. Yager. Fine.
    Mr. Boucher. And we would be happy to hear from you on 
that.
    Mr. Ergen and Mr. Gabrielli, I have a question for both of 
you, and it goes to the heart of what much of our debate in 
this committee on reauthorizing the law is going to be about. 
It has been 10 years now since the local-into-local license was 
first granted. And in that 10-year period, much has changed. 
Most of the country now has the benefit of local-into-local 
service, but there are 30 markets that still do not. And I 
actually represent one of those markets or at least part of it. 
Spot beams were not commonly in use at the time this license 
was created 10 years ago. Today, spot beams are. That makes for 
far more efficient use of your spectrum. And in the meantime, 
another major thing that has changed is that you are now adding 
high definition service, which consumes quite a bit of spectrum 
in the more populated markets.
    But we still have 30 markets around the country where there 
is no local-into-local service. And in these markets, 
oftentimes you have a very small number of television stations. 
Maybe it is all of the networks represented, nothing else. 
Maybe you don't even have that many. Maybe not all the networks 
are represented with local affiliates. And these are oftentimes 
geographically challenging areas where people really need the 
satellite service because they can't get service delivered over 
the air because of being a long way from the television station 
or because of terrain. And so though the arguments from people 
in these 30 markets are very vocal that if you are going to get 
the benefit of a nationally granted license that lets you offer 
the local-into-local service, in return for getting that 
license you should be required to offer that service 
everywhere. And the technology now has improved to the point 
that it is somewhat easier for you to do that.
    So that is the complaint we are hearing. And I want to give 
you an opportunity, both of you, to respond to that. And my 
time is expiring, so as soon as you conclude your answer, I 
will turn to Mr. Stearns.
    But Mr. Ergen, would you like to respond, and then Mr. 
Gabrielli.
    Mr. Ergen. Sir, it is a great question.
    First of all, our company delivers in the 178 DMAs, so 
there are only 32 DMAs that we don't deliver a signal in. I was 
a little bit shocked that Mr. Yager was unaware, and in all 
those markets, those are short markets, Mr. Chairman. So, our 
company, as you may know, after a long court battle is not 
allowed to bring in a nonbroadcast network in those short 
markets. So we have--not only do we have technical issues that 
we perhaps could overcome with enough time and money, but we 
have real economic issues that, without bringing in a short 
market station, without the ability to do so, no customer would 
buy it from us anyway.
    And it is a shame that the representative from the National 
Association of Broadcasters doesn't realize that we have this 
issue of short markets without all network stations in all 
markets.
    We certainly believe that it shouldn't be mandated from a 
legislative point of view. What I would like to see this 
committee do is bring the economic incentives so that we could 
generate competition and that we would have the desire from an 
economic point of view to go out and do all 210 markets. And, 
again, our company is certainly prepared to meet the challenges 
to do those kind of things with the ability to actually bring 
in short market signals. And you have to balance similar with 
the must-carry laws as well, which is why we suggested that 
where there is not local content, you free that bandwidth up 
for those local markets. If you do those things, I think you 
have a good shot at getting most, if not all, by one or both of 
the DBS providers.
    Mr. Boucher. Thank you, Mr. Ergen.
    Mr. Gabrielli.
    Mr. Gabrielli. Mr. Chairman, I would like to make the 
point, though, that both Dish networks announced were secondary 
transmitters of a primary broadcast. So we are really doing 
what the television stations are supposed to do, which is cover 
their market. We happen to have some advantages of doing it, 
but it is not our primary business.
    The covering of 210 markets, as Mr. Ergen has said, has got 
a number of technical difficulties. One is, and we have picked 
up some stations like in Gainesville and in Lafayette where it 
is a single station, but getting the other networks is tough 
because we have to get agreements from all the locals around it 
that bleed into it, and all have some right to claim that those 
are their customers and that we can't bring somebody else in. 
So we have to negotiate with everybody in the surrounding 
territory.
    A technical issue is that the local station often is in a 
pretty remote place, and we have a very tough time of getting 
the signal back to us that we have to get those signals via 
fiber in-ground, and quite often, there is no fiber to these 
stations and that is a huge economic burden to take that we 
have to go to try to get those signals.
    Mr. Boucher. Thank you very much.
    Mr. Stearns for 5 minutes.
    Mr. Stearns. Thank you, Mr. Chairman.
    I remember SHVERA, when we had this act in 2004, and we 
marked it up, and I thought it was rather simple that we could 
do, but it became very complicated. And after hearing a little 
bit of the opening statements, I can see that this has become 
complicated again.
    But the difference is, as I mentioned in opening statement, 
is we now have not only satellite and cable, but we have 
broadcasters and we have the phone companies, Sprint and AT&T 
coming in. We have the Internet. We have the iPhone. We have so 
much more. So is it possible some of the arguments we made back 
when Billy Tauzin was chairman of this committee and the 
Republican majority, some of the arguments we made about 
letting the market decide may be even more so today. And so 
this is to follow up a little bit on what Chairman Boucher has 
talked about in dealing with the must-carry requirements.
    When it was brought up, the argument was, ultimately, it 
was constitutional, and must-carry had to be provided because 
there was insufficient competition to ensure broadcast stations 
would gain carriage on the marketplace. So this question is 
sort of fundamental to our whole debate this morning.
    And this is to Mr. Ergen, Gabrielli, and Ferree. In light 
of what I mentioned with the satellites and broadcasting and 
the phone companies, the Internet, and all these various new 
markets, and the multiple outlets for carriage, does the 
Constitutional argument still apply? Is it still that the must-
carry requirements have to be implemented because of law?
    I will start with Mr. Ferree first.
    Mr. Ferree. In my judgment, it would be unconstitutional 
without a doubt. I don't think you have to be Oliver Wendell 
Holmes to figure this out.
    The original must-carry rule was held up by a 5-4 majority 
in the Supreme Court based on an extensive record showing that 
broadcast stations, some broadcast stations, would fail without 
carriage on their local cable systems. I don't think you 
could--I mean, first of all, we don't have that record for 
satellite services, and I don't think you could create such a 
record. So I think without a doubt it would be struck down as 
unconstitutional.
    Mr. Stearns. And then we will go to Mr. Gabrielli.
    Mr. Gabrielli. I guess the answer would be, we would rather 
not have a must-carry. The capacity we use to carry a number of 
stations that don't have local content; we would love to use 
that capacity to carry local stations in, again, these smaller 
markets that we still can't currently carry right now.
    Mr. Stearns. Mr. Ergen.
    Mr. Ergen. I don't know about the constitutionality, but 
again, I think I am sympathetic to the local broadcaster who 
invests in his community and invests in his local content, 
that, when possible, we should carry him, and we do that today. 
Where I think this committee has it wrong is where you mandate 
must-carry when a broadcaster doesn't invest in his community 
and he gets the benefit without the investment. I will give you 
a simple example.
    We carry home shopping channels. And if we carry a national 
home shopping channel, we may carry it 20 different times in 20 
different spot beams, and it is exactly the same signal minute 
by minute, second by second. And there is not one local 
commercial, and there is not one local newscast. In my opinion, 
if the broadcaster doesn't invest in his local community with 
local content, news, weather, sports, political, so forth and 
so on, there shouldn't be a requirement for cable or satellite 
or phone companies that we have to carry their signal, because 
we can carry--we uniquely can carry it on a national basis and 
get the customer the same signal. It happens sometimes with a 
religious broadcast, shopping, some international channels.
    Mr. Stearns. You could argue then the religious broadcaster 
has to have local participation in his community before it 
meets your criteria.
    Mr. Ergen. For example, we may carry a national religious 
channel; we may give it to all 110 million homes, every square 
inch of the United States. But to duplicate that same signal on 
a local basis, as the law requires us to do today, doesn't make 
any economic sense if that local broadcaster only just 
rebroadcasts the same national signal because there is no 
local--they don't have any local content, news, weather, 
sports. So it doesn't hurt them in any way, but it adds cost to 
the satellite providers.
    Mr. Stearns. What you are saying, if we carry the must-
carry mandate, we should stipulate some of the requirements 
that these stations have to participate in their local 
community.
    Mr. Ergen. And I think that is a fair compromise.
    Mr. Stearns. Mr. Ferree, what do you think of that comment?
    Mr. Ferree. I don't think that gets to the underlying 
constitutional problem here. The original rule was held up, 
again, to protect over-the-air viewers from losing some 
broadcast service. I don't think you could--
    Mr. Stearns. Are you saying Home Shopping Network doesn't 
fit that requirement, what you are just saying?
    Mr. Ferree. No. It may fit that requirement. But I don't 
think you could make the case that, absent carriage on a DBS 
system, that these stations would fail. They are not being 
carried now, and they are not failing. So the over-the-air 
viewers would not lose the service.
    Mr. Stearns. Would anyone else like to comment quickly? I 
have one more question.
    Ms. Sohn. I have sort of a grand bargain that might work 
and actually also may perhaps resolve some of the 
constitutional issues. One never knows what a court is going to 
do, so I can't guarantee it.
    So I think a local-into-local requirement is required if, 
and only if, you reform retransmission consent, because that is 
a monopoly problem for the broadcasters; two, you allow the 
importation of distant signals without restriction; and you 
have this unitary license.
    So I wouldn't be in favor of just imposing local-into-local 
on satellite providers without those other three reforms. In 
this way, the government is giving something to the DBS 
providers and asking in return, and that could resolve the 
constitutional problems.
    Mr. Stearns. Let me go to my other question for Mr. Ergen 
and Mr. Gabrielli.
    There has been a delay in the DTV transition because 
February 17th is no longer the date, and by June 12th, we will 
finally have reached the end of the analog full power 
broadcast. What do we need to be made in the satellite 
television law after the completion of this digital TV 
transition? Is it as simple as plugging a digital standard into 
the FCC predictive model and testing regime for distant single 
eligibility, or is there anything else that we need to do?
    Mr. Ergen. Well, assuming you keep the 119 license and it 
doesn't go into like a unitary license, 122, as the Copyright 
Office has recommended, then you must go out. And the digital 
signal is much different than the analog signal. As we all 
know, there is a waterfall effect: The signal normally doesn't 
go as far, and you either get it perfectly, or you don't get it 
at all, or it breaks up a lot on you.
    So I think there has to be a new model. The predictive 
model has always been subject to interpretation, court battles, 
and so forth. It seems there has to be a way. In the digital 
realm, a customer knows whether they get a signal or not. In 
the analog world, it is always subjective, subjective is the 
picture quality, but in the digital world the customer knows. 
And I think there has to be a much better model in the digital 
world if you are going to keep the 119 license.
    Mr. Stearns. Mr. Gabrielli.
    Mr. Gabrielli. I agree with Mr. Ergen.
    The basis for this was a prediction where the customer 
could not get an over-the-air signal. So, as we go from analog 
to digital, we need to switch the model from an analog model to 
a digital model because that is now the signal that the 
broadcaster is producing.
    It is a much more clear drop-off. There is less of this 
ambiguous-- you get a signal so much percent of the time, and 
there is no snow and stuff like that. So we need to go to a 
digital model, if it is a little gap in the way the law versus 
the digital transition has gone, and use that because there 
would still be customers who do not get an over-the-air signal 
and need some other way of getting network services.
    Mr. Stearns. Thank you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr Stearns.
    The gentleman from Michigan, Mr. Stupak, is recognized for 
7 minutes.
    Mr. Stupak. Thank you, Mr. Chairman.
    My questions, of course, are going to deal with local-into-
local.
    So let me ask Mr. Gabrielli and Mr. Ergen, do you believe 
local-into-local in all 210 markets is in the public interest 
and would promote localism?
    Mr. Gabrielli.
    Mr. Gabrielli. If it is truly local content, it will 
certainly help. As Mr. Ergen said, we both rebroadcast numerous 
stations locally that are equally available on a national 
basis.
    Mr. Stupak. But do you believe it is in the public interest 
to do this?
    Mr. Gabrielli. We believe it is in the public interest. 
But, again, my point is, both of us are secondary transmitters 
of a primary broadcast that the broadcasters are supposedly 
putting out.
    Mr. Stearns. Sure.
    My time is limited, so I am not going to let you 
filibuster.
    Mr. Ergen.
    Mr. Ergen. Yes, I do believe it is in the public interest. 
And we would love to be able to do it if the right incentives 
and legal things were able for us to do it.
    Mr. Stupak. Why do you need incentives?
    Mr. Ergen. Well, because there is a huge cost to do this. 
It costs about $1 million for each beam that you put--
    Mr. Stupak. So you have 32 more areas you said you have 
coverage?
    Mr. Ergen. $32 million. It costs about $250,000 or more per 
year to receive the signal via fiber. So that is 32 times 
$250,000 per year. In one DMA, like in Glendive, Montana, there 
are 3,700 homes. If you got every single subscriber to Dish 
Network, you couldn't pay your cost to do it. And in our 
particular case, we do not do not have a statutory 119 license 
to be able to bring in the missing short market signals.
    Mr. Stupak. So what incentives are you looking for?
    Mr. Ergen. So we would look for a few things. One is some 
reform of the must-carry legislation so that we can free up 
bandwidth that helps us from an economic point of view.
    Second, we would look for some help with how do we get the 
signal back through our up-link sites. Perhaps we could even 
share that cost with DIRECTV under antitrust exemption and so 
forth.
    The third thing we would look for is a license, a 
compulsory license so that we can bring in short market signals 
where a network affiliate is missing in a particular short 
market. So, for example, in the cities that we don't do today--
we have done every market that is not a short market, so and 
otherwise, and it makes no sense to do a short market if we 
can't also deliver the other networks. And so we need a reform 
there from a licensing point of view--
    Mr. Stupak. Not going to start asking for all four of them. 
We just want local-into-local. Like when my schools were closed 
yesterday, we want to know about it. ABC isn't going to tell me 
that unless it is local media, right?
    Mr. Ergen. Give me the particular DMA. Which is your DMA?
    Mr. Stupak. Marquette.
    Mr. Ergen. So Marquette is missing which networks?
    Mr. Stupak. We only have one.
    Mr. Ergen. So for us to spend over $1 million and $250,000 
a year in Marquette, where we only can bring in one network, 
and we as a company are not able to bring in ABC, CBS, and Fox, 
that doesn't make economic sense to us. And every market where 
we as a company can bring in all four networks, we have done 
it. More than anybody else on this panel, we have done it. But 
we are in a situation where we do not have the ability to bring 
in all the networks.
    Mr. Stupak. You mentioned capacity.
    Mr. Ergen. And the economics don't work.
    Mr. Stupak. You mentioned capacity, and that you would be 
willing to provide to the members--would you be willing to 
provide us responses as to your capacity to reach all 210?
    Mr. Ergen. Yes, we would.
    Mr. Stupak. And you would provide that to us, and we will 
follow it up in writing?
    Mr. Ergen. Yes. We would like to work with you, 
Congressman.
    Mr. Stupak. How about you, Mr. Gabrielli?
    Mr. Gabrielli. Yes.
    Mr. Stupak. OK. I would like to work with you guys, too. 
But the part that bothers me is like when DIRECTV, when News 
Corp. bought you out, if you look at the September 22, 2003 
document, page 4, you said: as early as 2006 and no later than 
2008, all 210 DMAs would be covered.
    And then I understand you are now owned by Liberty. But we 
keep getting these promises that we are going to have our 
local-into-local, and we never get it. So we have no choice but 
to enter into a mandatory requirement. I actually have not just 
Marquette but also El Pena where my district is not being 
covered. And even point to your Indiana example, but that is 
not the upper peninsula of Michigan. That may work in Indiana, 
but certainly not in the upper peninsula of Michigan. So all 
these promises we get from you guys, you never seem to fulfill 
it. The same thing you said back in 1999: Give us 10 years 
because technology and expense would come down, and we will do 
it. It has never been done.
    Mr. Gabrielli. Let me respond to that. Very respectfully, I 
don't think it is a fair characterization. It was News Corp., 
not DIRECTV, which no longer owns a part of DIRECTV.
    Mr. Stupak. News Corp. buying DIRECTV. Right?
    Mr. Gabrielli. News Corp. owned a percentage of DIRECTV. 
But that was their--News Corp. It really wasn't--
    Mr. Stupak. That was your application to do it. Right?
    Mr. Gabrielli. The promise was for a seamless integrated 
local solution in these markets, which we think with our 
integrated off-air tuner, which literally connects to our set-
top boxes, it receives over-the-air signals; it puts them on 
the guide. You can control them just like you can control any 
other channel.
    Mr. Stupak. Sure. But you promised to do it in 2003; and 
now you are telling me here in 2009 you can't do it.
    Mr. Gabrielli. No, we can do it.
    Mr. Stupak. So why didn't you do it then? You said you 
would do it by the end of 2008.
    Mr. Gabrielli. By the end of 2008, last year, we had this 
product. We have a product that the consumer can get, plug it 
in with our box, put an outdoor antenna on it, to receive over-
the-air signals. It integrates the two. The customer has no 
idea which ones come over the air versus which ones come from 
satellite.
    Mr. Stupak. Mr. Ergen, you wanted to state something.
    Mr. Ergen. This is my personal opinion. From a public 
perspective--what the gentleman from DIRECTV says is correct, 
but from a public perspective, it doesn't really work. I think 
people want it via satellite, because the picture quality is 
better and you can always guarantee the customer a signal. I 
think, from our perspective, what we need is we need the right 
in Marquette, for example, to bring in the neighboring DMA 
channels' networks that aren't available in Marquette, so then 
you get a full complement of ABC, NBC, CBS, and Fox, one of 
those being Marquette. That would give us the economic 
incentive to go and do the 32 markets that we don't do today.
    Mr. Stupak. Well, if Dish is doing more than DIRECTV, how 
come you are doing more than DIRECTV then? Why aren't you both 
at 178 as opposed to--
    Mr. Ergen. I can't speak for DIRECTV, and I will let Mr. 
Gabrielli do it. But we have made different choices. For 
example, Mr. Gabrielli has done more with PBS. He has done 
more--
    Mr. Stupak. So that takes care of Ms. Eshoo's issue.
    Mr. Ergen. So he has made a choice to do some additional 
PBS high definition channels. We have taken that spectrum and 
said, we can do more local markets, because that is what the 
vast majority of our consumers have asked us to do. So what 
happens is, it is difficult to do both. I think I have heard 
from the Congressman that people would like all 210 markets; 
everybody would like must-carry; and people would like all HD, 
which takes four times the capacity of standard definition. 
And, oh, by the way, I think, from PBS, they wanted all the 
multicast channels, which could be another 8 or 10 subchannels, 
for every channel that you have. The laws of physics won't 
allow us to do that from a satellite perspective.
    Mr. Stupak. Those of us in the rural areas just want to be 
treated the same as those in the urban areas. Why should we be 
treated any less after repeated promises, and we license it? So 
why--
    Mr. Ergen. I tend to agree with you, because I grew up in 
rural America, and we started our business in rural America. So 
I have a real sympathy there. What happens there is it becomes 
a zero-sum game. You would like to have capacity for Marquette. 
Fair point. PBS would like to have capacity for high definition 
PBS and 10 subchannels. Other people would like to have 
capacity for must-carry channels, even though there is no local 
content. And what happens is we can't physically, the laws of 
physics, do all that. We have made huge strides. And as Mr. 
Gabrielli pointed out, 80 percent of our capacity today is just 
for local.
    Mr. Stupak. That is why I asked the question, and you said 
you would provide the capacity issue, because we keep hearing 
that, but no one ever can directly point to it.
    Mr. Ergen. I would like to come work with your staff. And I 
would like to--I think I understand your issue, and I would 
like you to understand our capacity issues. And we will 
certainly come open and share everything. And I would like to 
work with you to solve the problem that you are addressing, 
because I think it is a real problem.
    Mr. Stupak. We will follow up with written questions as 
capacity, because I think it is important for all members of 
the committee to understand this capacity issue.
    Mr. Boucher. Thank you very much, Mr. Stupak.
    The gentleman from Illinois, Mr. Shimkus, is recognized for 
a 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman.
    And I appreciate my colleague from Michigan's comments. He 
is an ardent fighter for rural America, and I appreciate that.
    But I just want to get a clarification. Mr. Ergen, in this 
debate or discussion you had with Mr. Stupak, and I saw another 
panelist wanting to get attention. Are you saying that since 
Marquette has one local station and that is the market reason 
why it is difficult? But if you are allowed to broadcast the 
additional networks that may not now serve that area, that that 
would make an economic argument for doing so? Did I hear that 
right?
    Mr. Ergen. That is correct.
    Mr. Shimkus. Mr. Yager, you were jumping out of your seat, 
and I just kind of want to know why.
    Mr. Yager. I am afraid I didn't totally understand the 
chairman's question when it came to me about short markets. 
That is a rather new term to me.
    Marquette, Michigan is a very interesting market. There are 
four affiliated stations in Marquette, Michigan. Two of them 
are doing news. One is a full-fledged satellite of CBS station 
out of Green Bay. And, yes, I think that should be carried and 
should be part of the carriage. The Fox station there is in 
terrible economic shape, but if it were carried, I think it 
might improve its economic condition. So I am sorry I 
misunderstood the chairman when he talked about short markets. 
I wasn't quite aware that is the way he was terming the market.
    Mr. Shimkus. But you are agreeing with Mr. Ergen's 
statement on broadcasting the four networks.
    Mr. Yager. I am surprised Mr. Ergen doesn't know there are 
four network stations in Marquette.
    Mr. Shimkus. I am just trying to get clarification here. We 
are all among friends here. What I have learned in the digital 
transition, not the satellite debate, is that there is going to 
be some communities that, because of the length of the analog 
signal, they are going to assume that that is their local 
station; where, when we do a digital broadcast, the local 
affiliates are going to say this is our market area, and this 
is how far we are going to service. And people are going to 
say, hey, I lost, where they have another region. I know 
before, when we started, the State of Indiana was up there in 
the placard, and two of those bled into my congressional 
district.
    So we have this, where Vincennes is the major market for 
southeastern Illinois, or Paducah is a major market and that is 
where they get all their, or Cape Girardeau, Missouri, or 
Springfield or the St. Louis one. I have five markets that 
cover my congressional district.
    Let me ask a question to all the panelists, and the time is 
short, so if you can kind of keep this--this is not a gotcha 
one. I do some gotcha questions every now and then.
    Even apart from specific substantive changes to this 
legislation, could we improve things by simplifying the law, 
the current law as written? Are there things that we could 
simplify that makes it easier versus any major rewrite? And 
let's go left to right.
    Mr. Ferree. Gee, I am not sure how to answer that question. 
Simple is always better. But right now, I don't have an obvious 
answer
    Mr. Shimkus. That is fine.
    Ms. Sohn. I advocate for one unitary license. There is no 
rationale either technologically or for any other reason to 
have satellite and cable under two different compulsory 
licenses. I think in the short term, a DMA fix allowing the 
importation of signals from adjacent DMAs or in-State DMAs, 
that is pretty simple. That is not hard. And in the future, 
getting rid of distant signal protection altogether.
    Mr. Shimkus. Mr. Yager.
    Mr. Yager. My answer would be, yes, local-into-local would 
simplify greatly.
    Mr. Shimkus. OK.
    Mr. Rowland. It is simple. From a public television 
standpoint, we would prefer carriage in all markets and want to 
have conditions that maximize our digital multicast carrying 
capacity. The Eshoo bill would be a very useful way of making 
that happen.
    Mr. Shimkus. Mr. Gabrielli.
    Mr. Gabrielli. The simple answer is, yes, it would be a 
grateful help. An example is those stations that actually bleed 
over into another market that doesn't have that network 
affiliate. It is not part of their DMA, but yet they have 
rights under us that we can't bring somebody else in. That 
would be a very simple fix.
    Mr. Franks. None of these issues are simple, Congressman. 
The simple, most straightforward thing for the committee to do 
is a straight reauthorization of the distance signal license.
    Mr. Shimkus. Thank you.
    Mr. Ergen.
    Mr. Ergen. Well, an absolute signal is to treat television 
like newspapers. Which means, in Washington, you can buy the 
New York Times, you can buy the Miami Herald, you can buy the 
Washington Post. Let customers buy any network signal they want 
to.
    Mr. Shimkus. I would ask another one, Mr. Chairman, but my 
time has expired so I yield back.
    Mr. Boucher. Thank you very much, Mr. Shimkus.
    The gentlelady from Colorado, Ms. DeGette, is recognized 
for 7 minutes.
    Ms. DeGette. Thank you very much, Mr. Chairman.
    There seems--I want to go to this issue of the local-into-
local transmission. And there seems to be some agreement on the 
panel that, at least among Mr. Gabrielli and Mr. Ergen, that it 
is a good goal to try to carry these channels if they have 
local content.
    Mr. Gabrielli.I would like to ask you, how many of the 
channels you are being asked to carry under the local-into-
local do not have local content?
    Mr. Gabrielli. Offhand, I really don't know. I know--
    Ms. DeGette. Can you give me a percentage? Is it a large 
percentage?
    Mr. Gabrielli. It is a significant percentage. I would say 
it is 30 percent of the channels.
    Ms. DeGette. Thirty percent of the local channels have no 
local content?
    Mr. Gabrielli. That would just be a guess from dealing 
with--
    Ms. DeGette. And why is that? Is it channels that are being 
rebroadcast?
    Mr. Gabrielli. To a large majority, yes. The shopping 
channels that Mr. Ergen talked about; certain religious 
channels are just delivered via satellite to a facility and 
just rebroadcast out to that local channel.
    Ms. DeGette. Mr. Ergen, would you agree with that 
percentage, 30 percent?
    Mr. Ergen. The channels that have no local content is 
between 15 and 20 percent.
    Ms. DeGette. And does that provide a real burden on you? 
Because I know you share the goal if it is truly a local 
content that you want to be able to rebroadcast that.
    Mr. Ergen. I agree with Congressman Stupak, that we would 
be much better off to free up that 15 to 20 percent of channels 
that have no local content and go get Marquette and get them up 
on the satellite, and some of these other locations, the other 
32 markets that we don't do today. To me, that is an economic 
trade-off where the local broadcaster suffers zero and the 32 
markets that we don't do today get a great benefit, and then 
therefore the consumer gets a great benefit.
    Ms. DeGette. I hear what you are saying, and that kind of 
goes to the heart of the issue. How are you going to determine 
and who determines whether there is local content?
    Mr. Ergen. My suggestion would be that probably the 
broadcasters submit their--to the FCC or so forth, and they 
determine the cutoff that you are allocated, just as they would 
define a network today, I believe the FCC could define a local 
content hurdle. That would--
    Ms. DeGette. So you think it should be up to the FCC?
    Mr. Ergen. I prefer that this committee do it, but I 
think--
    Ms. DeGette. We will put the chairman in charge of 
determining that.
    I wanted to ask you, Mr. Rowland, I want to ask you to 
comment on that, because it seems to me to make sense, on the 
one hand, to require transmission of the shows truly with local 
content. But if you have these retransmitted shows that don't 
have any local content, that seems to be cluttering up the 
problem. What is your response to that?
    Mr. Rowland. I think, from a public television standpoint, 
there is a tremendous amount of local content in all of the 
licensees. The stations across the country are not just 
retransmitters of the PBS signals.
    Ms. DeGette. I don't think that is the problem that Mr. 
Gabrielli and Mr. Ergen are identifying, though. There is a 
different problem they see with that, which I will get to in a 
minute. But what they are saying is there is a lot of other 
shows, shopping shows and other shows that have no local 
content that are being asked to--for example, with Colorado 
Public Broadcasting. If they were transmitting that, sure, they 
might have some of the national PBS shows, but there would also 
be substantial local content.
    So I think you would be OK. What about these shows that are 
just being rebroadcast by local TV stations that really don't 
have any local content at all?
    Mr. Rowland. Yes, that is a very difficult issue, and I 
don't have a real clear sense of the dimensions of that 
problem.
    Ms. DeGette. Well, as Mr. Ergen just said, it is 15 to 20 
percent.
    Mr. Rowland. Yes. I haven't seen the statistics on that. I 
have to look at it much more closely.
    Ms. DeGette. What is the view of the public broadcast 
systems? I don't know if you are here representing them or just 
Colorado Public Broadcasting. But of that 15 to 20 percent, 
what would your view be if we could somehow find some standard 
to take that out? Wouldn't that free up space for you folks to 
get broadcasting?
    Mr. Rowland. Yes, it might.
    Ms. DeGette. Have you thought about that issue?
    Mr. Rowland. No, I haven't--
    Ms. DeGette. That might be worth doing that. What about 
this point that Mr. Gabrielli was making, about it is not just 
public broadcast systems, but it is also high definition, and 
then there is all of these substations. I didn't really 
understand that issue so much. Is that something that the 
Public Broadcasting System is shooting for?
    Mr. Rowland. I think what has happened, of course, is as 
digital has advanced--and it is always a moving target. It is 
dynamic, it is changing with compression technologies. We are 
no longer in a world of a single HD channel opportunity any 
longer. You can get more multicast capacity. And many of those 
are very, very valuable. To think of them as subchannels 
sometimes demeans them when, in fact, they are very, very 
important in the eyes of the viewers who use them. And I think 
that is what we are talking about, is broadening out the range 
of the multicast stream capacity.
    Ms. DeGette. So that is a very interesting question, then. 
And that question is, as we broaden out the HD capacity of the 
local shows and the public broadcasting, how much of that 
should these folks be required to carry?
    Mr. Rowland. Well, ultimately, the objective would be to 
have as much as we are otherwise putting out over our free 
over-the-air transmitters that affect the full 19.4 megabits 
capacity that we have.
    Ms. DeGette. And, Mr. Ergen, what is your view on that?
    Mr. Ergen. You have asked a really good question there. In 
today's technology, that 19.4 megabits could be 15 channels. So 
I don't think it is realistic to pass legislation that would 
require cable and satellite and phone broadcaster companies to 
retransmit 10 or 12 or 15 PBS subchannels. We are supportive of 
the core PBS signal, and we do believe it does, in almost every 
case, have a lot of the local content and needs the local fund 
raising. So we are very supportive of the main PBS feed. But 
the multicast is not a requirement that anybody has burdened us 
with today, and we would be against that.
    Ms. DeGette. Mr. Rowland, what is your response to that, 
that you should really look at the number of channels, not the 
number of--
    Mr. Rowland. Yes. And evaluate the services that are being 
provided. In Colorado, as you know, we have got two public 
television stations. Traditionally, in the analog role, they 
have been quite differentiated from one another. They have been 
value-added in the public broadcasting firmament of television 
services. Between us now, we offer six multicast streams that 
are all differentiated from one another, ranging from Latino-
oriented programming through to international news and public 
affairs, that together add up to a considerable service that is 
not otherwise available in the market. So it seems reasonable 
to argue that those services should be made available.
    Ms. DeGette. Yes. You know, you didn't exactly answer that, 
but I get the sense that, frankly, the public broadcasters and 
the companies share sort of some of the core values, and the 
question is, how do we make it work? So I will reiterate, at 
least for my own industries, what I did before, which is I 
would be happy to convene a meeting of you folks to talk about 
what we should do and if there is some kind of resolution. I 
had done that before, and that never came about. So I will--
    Mr. Rowland. And we would relish that. And just understand, 
we understand there are some capacity issues. And we are 
willing to work around that. We have with DIRECTV already.
    Ms. DeGette. Thank you. Thank you very much.
    Mr. Boucher. Thank you very much, Ms. DeGette.
    The gentleman from Georgia, Mr. Deal, is recognized for 5 
minutes.
    Mr. Deal. Thank you, Mr. Chairman.
    There are issues here that some people won't talk about, 
and some people don't.
    Mr. Franks, I was somewhat amazed when you made the 
pronouncement that the DMAs and the retransmission consent are 
not broken and we shouldn't tamper with it and that straight 
reauthorization is what this committee should be dealing with. 
I am sure that was spoken with the same conviction that King 
George dismissed the taxation without representation of our 
early colonial revolutionaries. It is a statement of a 
monopolist.
    Now, I am more inclined to agree with Ms. Sohn's analysis 
here that retransmission is tied into it. And I know the 
chairman would prefer us not to get into that, but apparently 
your panelists didn't have that information because almost all 
of them in some form or fashion have mentioned it. And I think 
ultimately it is one of those things we have to deal with.
    Let me talk about some of the other issues.
    Mr. Yager, what percentage of the viewing population of 
your broadcasters receive their signal now over the air?
    Mr. Yager. Well, it varies by market.
    Mr. Deal. Well, average overall. Now, I am told that the 
2006 FCC study showed that it was about 15 percent.
    Mr. Yager. That is probably a good average.
    Mr. Deal. Do you expect that percentage to increase or 
decrease with the digital transition?
    Mr. Yager. I am hoping it decreases.
    Mr. Deal. All right. So less and less people are going to 
get their signal from your broadcasters free of charge; they 
are going to have to go through some of these other medians: 
cable, et cetera?
    Mr. Yager. Well, no. The over-the-air signal will still be 
very, very strong and I think it will be superior in digital 
than it has been in analog.
    Mr. Deal. But you said it was going to decrease in 
percentage of viewers.
    Mr. Yager. Well, I think that is true because right now the 
preferred delivery method for digital has been through cable 
and satellite. But as we get the converter boxes out, as we see 
more conversion to digital on the part of the home set, I think 
you will see about the same kind of 15, 16 percent.
    Mr. Deal. So you think it may go up then. I thought you 
just said a minute ago it will go down.
    Mr. Yager. What I am really saying is I think it will go 
down because second sets are not included in anything we are 
doing.
    Mr. Deal. Let me ask. You like the DMA system; is that 
right? You like what DMAs give you in terms of protection?
    Mr. Yager. I believe in the DMA system as a way to 
designate a marketing area where there is a common kind of 
commonality of interests of the people served.
    Mr. Deal. Well, that is all well and good but over the year 
doesn't serve the needs of constituents in the DMAs. What are 
your broadcasters doing to increase or enhance the ability to 
reach those viewers without the necessity of going through some 
of the multichannel providers?
    Mr. Yager. I am sorry. I am not quite sure I understand the 
question.
    Mr. Deal. Well, there are places in my district and I think 
everybody we have heard from, places in their districts that 
they can't get your broadcaster's signal over the air. Now, in 
going to digital may or may not enhance that spread. In fact, I 
am inclined to think it may decrease it rather than increase 
it. If you are not doing anything to enhance the ability to 
expand the over-the-air, why would you object to us looking at 
the issue of DMAs as to the problems they present?
    Mr. Yager. We think, first of all, that the local-into-
local will solve the problem of people not being able to get a 
signal.
    Mr. Franks. Mr. Deal, may I interrupt? You may not hold my 
opinion in high regard, but I would like to express it.
    Mr. Deal. Maybe you can enhance my opinion.
    Mr. Franks. I will try valiantly.
    Actually, we are spending hundreds of millions of dollars 
on the digital transition to try and perfect that signal. In 
many instances, we are still not on the designated channel that 
we will be on. We are not at the tower height. So as soon as we 
do make those switches, we are--we know for a fact that KCBS in 
Los Angeles is not going to as easily reach the full market as 
the KCBS analog. We are prepared to spend millions of dollars 
to try to enhance that signal, change the antenna height, if 
need be go to translators and repeaters, so that we do--it is 
in our interest. We do better in over-the-air homes. We get 
higher ratings in over-the-air homes. So it is very much in 
our--
    Mr. Deal. But you don't get the retransmission money?
    Mr. Franks. You know what, I would happily go back to a 
three-channel universe, no retransmission. That was a wonderful 
business, Congressman. And I would go back--
    Mr. Deal. Well, let me ask you this. I don't think we are 
going back to that, but we may be going--
    Mr. Franks. I would swear off retrans if we could go back 
to an over-the-air regime, purely over the air. Happily.
    Mr. Deal. We may go into consideration of allowing some of 
your CBS affiliates to cross the DMA boundaries.
    Mr. Franks. They can do it today. I keep hearing this 
concern about local news. I grew up--well, the map is down. I 
grew up in that corner of Indiana, Michigan City. We were 
served by the Chicago market. My father commuted to Chicago, so 
we have an economic affinity with Chicago. But if there is a 
desire to bring South Bend news into Michigan City, that can be 
done today. It can be done this afternoon with no change to the 
law, no change to regulation.
    Mr. Deal. So you are saying, then, the issue of adjoining 
DMAs or in-State DMAs crossing those lines is not an issue?
    Mr. Franks. I think it is only an issue for people who are 
masquerading either to evade retrans or to bring in competing 
program, a competing network--a second source of network 
programming. But what I hear from this committee is that the 
desire is for news. If the desire is for news, that is 
controlled by the local station. They control the copyright. 
They can authorize it this afternoon.
    Mr. Ergen. I have to jump in there a little bit. I can't 
let Mr. Franks get away with that.
    He is talking just about news, and it is not practical. 
That means we would be turning on and off that channel 6, 8, 10 
times a day. It means when a Senator runs his political 
commercial, you don't get it across State lines. And we obvious 
know people think about their weather and their news and their 
sports and everything else. So it just doesn't work from a 
practical point of view.
    And what Mr. Franks and the broadcasters are saying here is 
that we are not going to build the towers out. So you have to 
build your satellites and your cable systems and your plant 
equipment, right, and we want you to build the towers. And then 
we are going to charge you for a signal on top of that. And 
then, from a satellite perspective, you have got to pay the 
fiber costs to get the signal back to your uplink center, 
right. And we are just going to sit back in one little building 
and have a signal that we kind of send out to get to you. And I 
don't think the economics of that is quite fair, and I think 
you have pointed that out correctly.
    Mr. Deal. Thank you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Deal.
    The gentlelady from the Virgin Islands, Mrs. Christensen, 
is recognized for 7 minutes.
    Ms. Christensen. Thank you, Mr. Chairman.
    And I recognize that this is the first hearing of our newly 
constituted subcommittee. I want to applaud Chairman Waxman for 
creating it.
    And thank you, Chairman Boucher and Ranking Member Stearns, 
for holding this hearing on what, for me, who is new to this 
depth of the telecommunications world, are very complex issues 
as we prepare to reauthorize the Satellite Home Viewer Act.
    Hopefully, by the end of this hearing, I will understand 
why I have to have one TV on satellite and another on cable so 
that I can get network as well as local stations and distant 
programming at home and also why I have to try to find an 
excuse not to go home during baseball playoffs so I won't be 
bombarded by all of the complaints on why it is blacked out in 
the U.S. Virgin Islands. I have a lot to learn.
    But it is clear that the disparities remain between the 
satellite and cable providers and also, importantly, in the 
ability of consumers based on where they live to have acces to 
programs that they want to see.
    It is also clear that we are reauthorizing this act in a 
time of a changing landscape in terms of how broadcast 
programming is provided in the move to digital.
    So I want to thank my colleagues and the panel for this 
baptism by fire, but I am learning.
    Mr. Franks, I am still trying to get clear on all of the 
issues around DMAs.
    Mr. Franks. OK, so am I, Congresswoman.
    Ms. Christensen. As I was reading last night--I guess Mr. 
Yager also feels similarly to you--but I thought you were the 
only one that didn't want to change the system. I have a very 
simple question on that. Is that the position of all of the 
network stations, or is that just--
    Mr. Franks. I can only speak for CBS and the stations we 
own, Congresswoman. I can't speak for the other networks.
    Ms. Christensen. Thank you.
    Ms. Sohn, do you think that being able to obtain regional 
sports programming is critical to competition in the 
multichannel video programming distribution marketplace? Or, 
put another way, is a consumer less likely to subscribe to 
services of an MVPD provider if the services don't include 
regional sports programming? There isn't any substitute for 
that, is there? Or is this a situation that is harmful to 
consumers?
    Ms. Sohn. Well, absolutely.
    I mean, I am a huge sports fan, so I can safely say that 
when viewers can't see their local sports team, they are 
harmed, and it might make them less inclined to buy service 
from an MVPD. So, absolutely. Unfortunately, the one entity 
that is missing from this panel are the sports leads themselves 
because they have an awful lot of power to say, yes or no to an 
MVPD carrying their programming. It is a shame that we don't 
have anybody from the NFL or Major League Baseball here to talk 
about that.
    Ms. Christensen. And then I could ask them my question 
about the Virgin Islands, too.
    Thank you.
    Who is from cable? Do I have a cable witness?
    Well, to Mr. Gabrielli and Mr. Ergen, one of the problems 
that occurred in the past with satellite operators was around 
the issue of the underserved homes and how programming was or 
was not provided to them. Satellite TV has advocated adopting a 
policy whereby satellite operators would be permitted to offer 
distant high definition digital signals to consumers who 
currently only have acces to local over-the-air SD signals. 
Given our past history with the satellite television industry 
that I referred to, what is to stop the industry from trying 
to--I don't know what word to use--poach or just get around 
this with local broadcast station subscribers?
    Mr. Gabrielli. I think, again, the reason for distant 
network signal is to deliver to a customer a service that he 
can't get locally. We carry a lot of markets in HD as DISH 
network does. And in those markets, if we offer HD locally, 
they get HD locally. We don't offer distance. In places where 
either we don't carry it or a station does not get HD and a 
customer wants HD, we feel the right we should offer them HD. 
And we had agreements way before we started offering HD locally 
that we turned on a number of networks for customers because we 
were the only national carrier.
    As those markets became local HD markets, we have turned 
off those customers. The number of distant network service 
subscribers has decreased, not because of them reaching an over 
the air broadcast but because we carry both the SD and the HD 
versions. And as we do that, we will turn off the distant 
networks.
    Ms. Christensen. Ms. Sohn or anyone else who might want to 
answer this, I am informed that the Communications Act permits 
cable companies to refuse to permit access to certain 
programming if it is provided terrestrially, the so-called 
terrestrial loophole. It seems that the FCC thinks the current 
law prevents it from taking action on this. Is the commission 
right, or do you think--would you recommend a fix as we 
reauthorize this act?
    Ms. Sohn. Well, I would love to see Congress close the 
terrestrial loophole. There is an ambiguity as to whether an 
MVPD can avoid the program access rules by sending programming 
terrestrially as opposed to via satellite, because the 1992 
cable act says that if a vertically integrated cable operator 
sending programming via satellite does not make that 
programming available, unreasonable on nondiscriminatory terms, 
then somebody can file a program access complaint to the FCC. 
But because at the time the cable act was passed, it wasn't--
the programming wasn't sent terrestrially, it was sent by a 
satellite; so therefore Congress used those words not 
recognizing that the technology would change, which is, of 
course, a good warning to Congress when they do pass laws to 
try to be as technologically neutral as possible. So that is a 
long-winded answer to your question to say that I do think that 
Congress should make it clear that however a vertically 
integrated cable operator provides programming, it should be 
subject to the program access rules.
    Ms. Christensen. I don't know if anyone had another 
comment. I have got about 5 seconds.
    Mr. Gabrielli. I guess we just agree to the same thing. 
There is only a couple of cases where this loophole is being 
used, and it is specifically being used to keep both the DISH 
Networks from carrying that content. There is really no reason 
for it anymore.
    Mr. Boucher. Thank you very much, Mrs. Christensen.
    The gentlelady from Tennessee, Mrs. Blackburn, is 
recognized for 5 minutes.
    Ms. Blackburn. Thank you, Mr. Chairman.
    And I just have a couple of questions.
    Mr. Ferree, I want to come first to you. In your testimony, 
you had specifically said that you believe consumers should be 
permitted to access whatever programming they desire so long as 
distributors and right holders can negotiate an agreement in 
the free market. And I would love--and you can send this to me 
in writing, because what I would like is for you to elaborate 
on how you think we could best approach and realize that 
result, and what recommendations that you may have for 
improving that DMA system that would spark an expansion of the 
DBS-provided local programming.
    Many of us have talked about rural areas. I specifically 
mentioned Hardin and Hardeman counties in my district and the 
problem that we have there with accessing the program and that 
being, again, a security issue. So I would love to hear an 
expansion or an elaboration on those comments from you if you 
will. And very briefly, if you want to add one or two points 
for me.
    Mr. Ferree. Well, I appreciate the opportunity to do it in 
writing later when I have had more of a chance to reflect on 
the question. The problem with this area, as several of the 
members have mentioned, is that it is an incredibly complex web 
of rights and consumer expectations. And there is no simple way 
to untangle this web and just say, OK--I wish there were an 
ideal simple free-market answer, here is how everybody would 
trade and deal. I don't have that.
    Ms. Blackburn. I think Ms. Sohn has an idea or two on that.
    Mr. Ferree. And I expect--actually, we are very close on 
most of these issues. I tend to disagree that it is as easy as 
unifying the licensing standards between all MVPDs, because one 
law for the lion and the ox is oppression. They are not all 
similarly situated to begin with. And again, I think there 
would be tremendous practical difficulties in trying to come up 
with just a simple unified compulsory license. So I will 
endeavor to come up with something, but I don't have it for you 
right now off the cuff.
    Ms. Blackburn. Thank you. I appreciate that. And I will 
look forward to your response.
    Mr. Yager, I want to come to you if I may, please, sir. 
Thank you for your testimony. I know you favor that DMA system, 
and I wonder if you would favor it in a digital world. But the 
question I really want to ask you goes to what I think is one 
of the act's bedrock principles, which is section 122 of the 
Copyright Act, which gives you a compulsory license for 
satellite carriers to retransmit your programming in a local 
market. And it allows all of you broadcasters to maintain 
control over that programming to protect those advertising 
revenues and then to ensure appropriate compensation to you for 
that signal and its content. And that makes sense to me. And I 
agree with that because I think that it is an appropriate 
intellectual property protection. And using that same logic, 
what I want to ask you is this: Do you or do you not believe 
that creators of musical works deserve that same protection 
when the terrestrial radio stations broadcast creative content 
over the air, and if not, why you would not agree extending 
that?
    And I would also ask you, sir, if you do not think this is 
a mirror image argument, and why do you think that the cable, 
satellite and telephone subscription video providers provide 
similar royalty compensations while the radio broadcasters do 
not?
    Mr. Yager. That is an excellent question, Congresswoman.
    Unfortunately, my side of the aisle as the National 
Association of Broadcasters is television. The side of the 
aisle you are talking about there is radio. And I understand 
that radio does have a hearing coming up in front--maybe this 
committee or the Judiciary.
    Ms. Blackburn. Do you not think that they are the same 
argument, sir?
    Mr. Yager. No, I don't. I think they are very different 
arguments.
    Ms. Blackburn. So you think they are very different 
intellectual properties?
    Mr. Yager. I don't really profess to be an expert on--
    Ms. Blackburn. Mr. Franks.
    Mr. Franks. Congresswoman, if I can speak on behalf of CBS 
radio and CBS television. With all due respect, I think you are 
making an apples and oranges comparison. On the television side 
of things, we spend a great deal of money procuring our 
programming and procuring that content from which we then seek 
compensation. In our radio businesses, A--in the TV business, 
we then have an exclusive right to that program. At our radio 
stations, the same record is played on seven or eight different 
stations and is aggressively pushed by the record companies and 
by the artists to the stations asking us, please, please, to 
play this station--to play the music. Five weeks from now, we 
will broadcast proudly the Academy of Country Music Awards. 
Every one of those winners is going to stand up and say thank 
you to country radio for making their music known.
    Ms. Sohn. Here I think is a better question. You asked a 
great question, Mrs. Blackburn, but here is a better question. 
Why does satellite radio pay public performance royalties to 
their artists and the recording industry? Why do Web casters--a 
lot of whom are going out of business--pay those royalties but 
over-the-air broadcasting does not? That is the comparison that 
makes absolutely no sense because those, satellite radio and 
Web casting, promote the heck out of music just the same as 
broadcasters do. And if those two have to pay, in my opinion, 
broadcasters should have to pay as well.
    Ms. Blackburn. Thank you, ma'am.
    Yield back.
    Mr. Boucher. Thank you very much, Mrs. Blackburn.
    The gentleman from Louisiana, Mr. Melancon, is recognized 
for 7 minutes.
    Mr. Melancon. Thank you, Mr. Chairman. I appreciate it.
    Most of my questions are probably going to deal with, Mr. 
Ergen and Mr. Gabrielli. I have a distinct issue that raised 
its head around the end of May and kind of hangs around until 
around November of each year. It is called hurricane season. 
And because of that and the alignment of my district along the 
coast, I kind of live in what I call a black zone. They know we 
are out there, because they want to get TV and such to us, but 
they don't want to cover our news very much.
    I have got a low power station, which I understand creates 
a dilemma from the standpoint of getting broadcast vis-a-vis 
satellite. Prior to the storm, this station, low power, has 
been on local cable. When the storm came 6 weeks, he has got a 
drag line out there with his tower worth of signals, sending 
the signal off the top of a drag line, at least he had been for 
several months until he could get a new tower built.
    In the meantime, satellite people came in and started 
advertising throughout the community. It doesn't matter when 
the power goes down, you have got a generator, you can get TV 
coverage. The only problem is you couldn't get this low power 
station. If he went to the tuner, then, in fact the tuner is--
if my understanding is correct, only gives him a several mile 
radius because it is local reception through the satellite. Is 
that a correct statement?
    Mr. Gabrielli. His territory is depicted or controlled by 
his power. So the tuner can pick it up if he has got the power 
to the tuner.
    Mr. Melancon. On cable, he was carrying--approximately 
several hundred thousand people were receiving on the cable 
network that he is being carried on. When the storms hit, the 
satellite companies said, we can get you all your stations but 
in fact couldn't provide him.
    My dilemma is I have got this black area that is in between 
Lafayette, Louisiana; New Orleans, Louisiana; and Baton Rouge, 
Louisiana. And none of them reported what was going on down 
there on a daily basis, which people who had evacuated wanted 
to know when they could come back, how they could get back, 
what the circumstances were.
    And let me just tell you, Mr. Gabrielli, your people, we 
have been working with them and talking to and trying to figure 
this out somewhere--and, Mr. Ergen, your people, too--to see if 
there is some help. Is there something that can be done in this 
reauthorization that provides for a station that provides more 
public service and 100 percent of local content to the 
community in which I am; that New Orleans doesn't help them. 
Baton Rouge doesn't help them, other than for network coverage. 
And Lafayette doesn't even get there. Is there anything that we 
can do in this bill that allows for me to help this--it is a 
business to this guy, but it is an information source to 
several hundred thousand people--that I can inject into this 
bill that would allow us to get him on to satellite or to some 
mechanism where those people will be able to get the 
information, particularly after disasters or hurricanes have 
been through.
    Mr. Ergen. You bring up a really good point. As I have said 
in my testimony and in answer to a previous question, I think 
the best thing you can do is relax the must-carry obligation on 
cable and satellite broadcasters and make--and eliminate any 
kind of must-carry requirement where there is not local content 
provided by the local broadcaster.
    And in your situation, it is just the opposite. Your local 
broadcaster provides 100 percent local broadcasting and can't 
get carriage. He is being bumped off the satellite by somebody 
who doesn't have any local carriage at all because they are a 
bigger company or part of a big conglomerate or whatever. And 
the way the law is situated today, it doesn't recognize the 
value of the local broadcaster that you have in your situation. 
So that is what I would recommend.
    Mr. Gabrielli. The limiting resource for both of our 
companies is really the satellite capacity. It takes 3 years to 
build and launch a satellite, $250 million, and they are up 
there for a long time. It is not like you can launch them every 
couple of years to update the capacity. So that is our limiting 
resource.
    In this case, Mr. Ergen is probably right. There is a full 
power shopping channel in New Orleans that we have to carry, 
and we can't, no longer have the capacity to carry a truly 
local station like yours. So not having that must-carry for 
those nonlocal stations like that frees up the capacity where 
we can help them pick up these truly local stations that fit 
within existing spots and capacities.
    Mr. Melancon. Is that your prerogative on the must-carry or 
can you take the option, QVC or--
    Mr. Gabrielli. No. There is no option. If that full power 
QVC station in New Orleans says carry me, we have to carry it.
    Mr. Melancon. The local tuner, as I appreciate it, is just 
like a local adapter with rabbit ears if you would. I have a 
duck camp 15 miles from this place; I can get the station. I 
live 30 miles away; I can't get the station. And, of course, 30 
to 50 miles is where all the people moved away after the 
hurricane. Is there some other technology that is out there 
that, vis-a-vis the DISH Networks, the DIRECTV network, 
satellite actually that might be able to give them more 
distance at this particular station?
    Mr. Gabrielli. The two options are with us, an integrated 
tuner that receives an over-the-air broadcast. If you can add a 
repeater or a translator to reach farther, our systems will 
pick it up. The only other option is to be on the satellite, 
and we need to find the capacity to do that.
    Mr. Melancon. Thank you, Mr. Chairman.
    Mr. Boucher. Thank you very much, Mr. Melancon.
    The gentleman from Oregon, Mr. Walden, is recognized for 5 
minutes.
    Mr. Walden. Thank you very much, Mr. Chairman.
    To our satellite providers, I am just curious again, as I 
mentioned in my opening comments, Bend, Oregon--that is B-E-N-
D, Oregon--it does not have the local-into-local yet on your 
services, and I am curious of two things. One, if you have a 
timeline, and I don't imagine you have every market memorized 
as to where you stand. But to do local-into-local, it is the 
second biggest community in my district, but it is also a rural 
district. So a lot of people use your services, and I am just 
curious if you have a timeline there. And second, on that 
similar point, I understand that you will go or assist in terms 
of putting up an antenna for people to receive the local signal 
and then it comes seamlessly through, in effect, the tuner. And 
I am curious how you market that, what kind of awareness there 
is in terms of your marketing strategies for that service. I 
don't think people are fully aware of how that works.
    Mr. Gabrielli. When a customer calls us, we know by his 
phone number approximately where he lives. And in those 
markets, we don't offer a local solution. We do tell them we 
have another off-air solution that is integrated with it. I am 
very familiar with Bend. I am an Oregon State grad. So I know 
where Bend is.
    Mr. Walden. Well, you seem to have turned out OK despite 
that.
    Mr. Gabrielli. And there is a station in Eugene, the guy 
calls me probably every other month and asks me the same 
question. And with Bend, it is an interesting market. And 
because when it first started there was, I think, one local 
station. And then when the stations or other stations went to 
digital, now it says, well, instead of now just being a FOX 
there on my digital secondary channels, I am going to be an NBC 
and a CBS. So now I have rights instead of being one station, I 
have to worry about one seat on the bus--now I have to worry 
about more seats. So that really kind of complicated the 
situation of--it was for years thinking about, we will find 
this one seat able for Bend, oops, now it is three seats.
    Mr. Walden. Now it is three. Delay has its costs.
    Mr. Ergen.
    Mr. Ergen. Thank you.
    We recognize that Bend now has all--their subcarriers, all 
four networks. So we have under construction a satellite that 
will allow local-to-local in Bend, Oregon, in January of next 
year. As we seat here next year, a year from now, when I see 
you with your kids at college, then we will hopefully be 
celebrating the launch of Bend.
    Mr. Walden. That is terrific. I will be happy to help flip 
a switch.
    Mr. Yager--and I appreciate that, and there is a good 
example of a role model to your left.
    Mr. Yager, talk to me about DTV in the remaining 2 minutes 
I have. The Medford market shifted, except one station. Tri-
Cities Washington, which also serves my district, shifted. We 
didn't get a single phone call. Did any of your stations?
    Mr. Yager. None of ours shifted. We did apply for a couple 
of shifts. We were turned down by the FCC. For whatever reason, 
they didn't want all the stations in the market, in one of our 
markets Quincy, Illinois, which is not from Congressman 
Shimkus's district. One station did go; we did not.
    Mr. Walden. I understood that the FCC had decided on that 
policy.
    Mr. Chairman, I would be curious--I don't know if you are 
planning a hearing on this DTV--I mean, a post February--
    Mr. Boucher. Will the gentleman yield?
    Thank you for yielding. We do indeed intend to have an 
oversight hearing on the DTV transition. We will probably wait 
until such point in time as the new money in the stimulus bill 
has made its way into the system, and the converter box 
program, the coupon program has been re-energized with those 
new funds. So it will not be the most immediate thing that we 
do. But certainly in the spring of this year, well before the 
June 12th transition date, we will have an oversight hearing on 
that.
    And I thank the gentleman for yielding.
    Mr. Walden. I am glad we are going to do the hearing. I 
would actually argue just the opposite, and maybe it is because 
I am now syncing with our new President who wants us to reduce 
spending where we can, that maybe if this transition worked OK 
in the markets where it occurred we wouldn't need to spend all 
that money, and this would be a great place and time to save a 
little.
    One other comment, and, Mr. Yager, maybe you can address 
this, The fairness doctrine. Congressman Pence and I succeeded 
in getting an amendment in to prevent the FCC from using its 
funds to promulgate some version of the fairness doctrine. I 
understand in the omnibus bill that we are about to vote on 
that that restriction has been stripped out. And so now the 
FCC, if this is the case, could use their funds to promulgate 
the fairness doctrine or some--it won't come up under those 
terms. It will be called something else if they do it. Is that 
a concern you have, and do you think it should apply to cable 
and satellite if it does come back?
    Mr. Yager. It is a major concern to me, and I hope it 
doesn't come back. And if it doesn't apply to us, then it 
certainly shouldn't apply to cable or satellite.
    Mr. Walden. The gentleman from our satellite distributors, 
what is your view on the fairness doctrine?
    Mr. Ergen. I am with Mr. Yager.
    Mr. Gabrielli. I also agree.
    Mr. Walden. Anybody else want to comment, even though I 
have overshot my time?
    Ms. Sohn. I spent a lot of the first part of my career 
defending the fairness doctrine. I think it is a doctrine whose 
time has come and passed, long passed. But that doesn't mean 
that the whole public trustee doctrine shouldn't be reviewed to 
see whether broadcasters aren't getting a few too many 
government bennies, including free spectrum exchange for not 
the best local programming.
    Mr. Walden. What if you got your spectrum allocation in an 
auction, is that free?
    Ms. Sohn. They don't. They didn't--
    Mr. Walden. In the radio business you do.
    Ms. Sohn. Broadcasters get their spectrum for free.
    Mr. Walden. No, no, no. In the radio where you have 
competing applications in a market, you go to auction. And the 
highest bidder--
    Ms. Sohn. I see. I just think the entire public trustee 
doctrine needs to be looked at again.
    Mr. Boucher. Well, we are getting a little bit far afield.
    Mr. Walden. I am just trying to give you new ideas for 
hearings.
    Mr. Boucher. Mr. Walden certainly gets the award for 
covering the largest number of issues during the course of 5 
minutes in this hearing today.
    Thank you, Mr. Walden.
    The gentleman from California--Mr. Buyer, is here. The 
gentleman from Indiana, Mr. Buyer, is recognized for 5 minutes.
    Mr. Buyer. Thank you.
    First of all, since we are going to bring up other issues 
while we are investigating this particular one, a couple of 
things of note, in Indiana last fall, it appeared that 
LINbroadcasting sort of went first out there in the marketplace 
in the retransmission negotiations with cable, i.e. Comcast, of 
which LIN Broadcasting in their local went dark in 
Indianapolis. Not a good thing. OK? So when we talk about free 
market principles in a market that really is also highly 
regulated, this is really hard. And I don't believe that was 
good in the public interest for a station to go dark. It was 
one of these things where, who is going to blink first? And I 
just want you to know that was not a good thing. It was not 
healthy.
    So we, I guess, like to use terms about serving the public 
interests. That didn't do it at all. That is a CBS affiliate. 
So I got that sorted. And I kind of hold that thought because I 
recognize there are many retransmission agreements that are 
coming on line. So I don't know if that was sort of posture 
about what is to occur.
    And then I noticed that--Mr. Franks, I don't want to pick 
on you, but I had noticed in December that your CEO of CBS had 
made some comments about how the model of the network broadcast 
is changing and we have to change with the landscape. And he 
talked about that perhaps even in the future, that the network 
will move toward cable; and that with regard to all these 
affiliate agreements that also are going to be coming up for 
renewal here relatively soon, that you are going to cut the 
affiliates out of the retransmission money to go directly with 
cable and then cut out the local broadcasters.
    Now, for a lot of Members of Congress of whom have close 
relationships with their localities, I have a strong curiosity 
here of what are those interests. So we can talk about all--the 
spirit of this hearing today about trying to get the local 
programming while there is some big issues out there in front 
of us. So I almost got a sense that I don't want to get lost in 
the high weeds. So I am going to do my opening and ask you, Mr. 
Franks, if you could sort of explain what your boss meant.
    Mr. Franks. First, Congressman, he was asked a hypothetical 
question, and he gave a--
    Mr. Buyer. That is dangerous. Go ahead.
    Mr. Franks. I would be happy to send to you the full 
context of the question and the answer, because it has been 
reported in a number of places as if it was something that was 
being contemplated in the very near term. And I think his 
answer made clear that this is something that may happen over 
the course of 10 or 15 years. I mean, local broadcasting--we 
own a number of stations. So they are amongst the most valuable 
assets of the corporation. So the notion that we are going to 
abandon any time soon local broadcasting is, I think, 
counterintuitive. So he was responding to a hypothetical. And, 
in fact, we continue to support our affiliates; there are any 
number of legislative arenas, maybe even this one, where we 
could take a more selfish course than we do. We do not do that 
because we believe in the system. We believe in our local 
affiliates. Our network is a $4\1/2\ billion business that we 
are not going to walk away from quickly.
    Mr. Buyer. Would this article have been accurate, that you 
wanted a percentage of the retransmission fees from the local 
broadcasters?
    Mr. Franks. Other networks have talked about that. I mean, 
a large part of what drives the retransmission value is the 
national programming. And in order to compete for the NFL, in 
order to compete for March Madness, we spend billions of 
dollars. And we may need help from our affiliates. We may need 
a share of their retransmission consent money in order to 
remain competitive for those rights.
    Mr. Buyer. OK. So they are out there in tough negotiations. 
I mean, take the Indianapolis for example, where LIN and 
Comcast--
    Mr. Franks. It is Time Warner, not Comcast. And 2 months 
later, we reached an agreement with Time Warner and--I mean, 
the LIN situation was unfortunate; it was unfortunate for the 
network. It hurt the network's ratings. So we were monitoring 
it very closely, but we also respected LIN's right. It is their 
right. We didn't bigfoot them. We didn't cut them off. They are 
the licensee. And under the law, they have the retransmission 
consent right. What deal we then negotiate with them in an 
affiliation agreement is a matter between us and LIN.
    Mr. Buyer. All right. I know my time is exhausted. May I 
ask--
    Mr. Franks. I will come back.
    Mr. Buyer. Mr. Chairman, may I ask one more? I know my time 
is exhausted.
    Mr. Boucher. Go ahead, Mr. Buyer.
    Mr. Buyer. I want to now go back into this free market, I 
am well aware that the CBS affiliate through LIN Broadcasting, 
which is the Lafayette, finally, after many years, had learned 
that there really were no legal ramifications as to why an 
affiliate in Illinois can sort of block that signal.
    And I appreciate, Mr. Gabrielli, for you to finally get 
this negotiated and on line.
    But as a curiosity, if we are going to say, OK, really 
don't do the Stupak bill, let the marketplace work, but why, 
then, Mr. Ergen, wouldn't you then get on board and do the very 
same thing that DIRECTV is doing in Lafayette? This is almost 
150,000 households. So don't give me the 1,400 household 
answer.
    Mr. Ergen. Yes. It is a unique problem to DISH Network. We 
don't have a compulsory license to bring in--I think in 
Lafayette there is a CBS affiliate, but there is not an ABC, 
NBC, or CBS. It is what we call a short market. We don't have 
the license to bring in those networks. So just to have one 
station and go to the expense for one station without the 
ability to bring in the other markets--DIRECTV does have a 
license, so they can bring in the other ones. So that is why we 
haven't done it.
    Mr. Buyer. So that is a money answer?
    Mr. Ergen. No, it is a regulatory--it is an issue where we, 
after a long court battle, we don't have a license to do it. So 
if that doesn't--if we had a license to do it, then the 
economics would make sense for us.
    Mr. Buyer. Can we let Mr. Franks answer and then I am done?
    Mr. Franks. It is a little off point, So you may be sorry 
that you let me back in. So, in the context of all the talk 
about DMA reform, I understand the problem of the short 
markets. I truly do. I understand Lafayette. I am from Michigan 
City. But why it is then preferable to bring in our station 
from New York to Lafayette as opposed to figuring out a way to 
bring in the Indianapolis stations into Lafayette when here we 
are talking about we need more help on getting in-State signals 
to--and then you are going to bring in New York City, it--I 
understand the attractiveness of providing the network 
programming, but it sure isn't localism.
    Mr. Boucher. On that note, thank you, Mr. Buyer. Thank you 
members of the panel for what has been a very constructive and 
informative conversation. We will be having further discussions 
with each of you, I am sure, as we construct the legislation. 
And members of this panel will perhaps be sending some 
additional questions to you. In fact, with Mr. Stearns' 
consent, I will ask unanimous consent that all members of the 
subcommittee have the opportunity to propound in writing 
questions to the witnesses for a period of, shall we say, 10 
days. So without objection, and you probably will be getting 
questions from a number of our witnesses. So your responses 
today have been very helpful to us. This has been a truly 
constructive discussion. And when you get questions sent by the 
members of the panel, please return the answers as quickly as 
you can.
    With the thanks of the Chair to all participants, this 
hearing is adjourned.
    [Whereupon, at 12:46 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

               Prepared Statement of Hon. John D. Dingell

    Thank you, Mr. Chairman, for holding this hearing today. 
Once again, the Committee is tasked with reauthorizing portions 
of the Communications Act of 1934 that affect satellite 
carriers' ability to retransmit broadcast television signals. 
The last reauthorization of these provisions in 2004 benefitted 
from the cooperation and insightful contributions of many, 
including several of my friends, among them Senator Hollings 
and Representatives Boucher and Markey. I hope that this 
collegial spirit will be characteristic of today's proceedings 
and the mark-ups to come, so that we may produce consensus-
driven, common-sense legislation that ultimately serves the 
interests of our Nation's consumers.
    In essence, we are again concerned with the two competing 
policy goals of fostering competition among Multichannel Video 
Programming Distributors, while at the same time preserving the 
viability of free broadcast television. I submit that the 
Satellite Home Viewer Extension Reauthorization Act of 2004 
helped in large part to balance these at times conflicting 
objectives, but I also recognize that the passage of time has 
brought new issues to light, such as whether satellite 
providers should be allowed to retransmit adjacent market local 
signals and also whether satellite providers should be 
statutorily required to offer all local signals in the markets 
where they offer service. These are multifaceted issues for 
which solutions may only be found in deliberate discussions 
among all stakeholders involved.
    I support your stated goal of a clean reauthorization of 
these provisions, Mr. Chairman, and offer my cooperation in 
achieving it. Moreover, I commend your foresight in beginning 
the Committee's work of examining these provisions well in 
advance of their expiration at the end of this year. With the 
benefit of experience, I can safely say that this affords the 
Committee the opportunity to produce well reasoned and 
effective legislation.
    Thank you, and I yield back the balance of my time.
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              Prepared Statement of Hon. G.K. Butterfield

    Mr. Chairman, let me start by saying how thrilled I am to 
be a Member of this subcommittee. I am happy to be here today 
to discuss the Satellite Home Viewer Extension and 
Reauthorization Act. Subscriptions to satellite based 
television services are very popular in my Congressional 
District as many of my constituents live in extremely rural 
areas where traditional cable service does not reach.
    In 2006, the Federal Communications Commission estimated 
that 85% of US households subscribe to some sort of pay 
television service so this reauthorization will ultimately 
impact the vast majority of Americans. It is important we 
cautiously move forward to ensure all stakeholders' views are 
taken into account. With many different views represented, I am 
confident we will arrive at a compromise with which everyone 
can be pleased.
    One issue I hope we'll explore is the addition of more 
quality children's programming available on satellite 
television. I have had the pleasure of working with ION Media 
Networks and have learned about their children's learning 
channel called Qubo. Now more than ever, children are turning 
to television to educate and entertain. I commend ION Media 
Networks and networks like ION for filling the void in using 
television to educate our young people.
    I look forward to hearing from the witnesses today. I know 
that all of the witnesses come with a plethora of institutional 
knowledge and industry experience and I thank each of them for 
their time on this important issue.
    Mr. Chairman, I am eager to work with my colleagues on this 
Subcommittee on this and future issues.
    Thank you.
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