DIRECTV 2010 Annual Report Download - page 34

DIRECTV
which in this document includes progeny legislation (including the Satellite to carry upon request the signals of all qualifying television broadcast
Home Viewer Improvement Act of 1999, or SHVIA; the Satellite Home stations within that local market, subject to certain limited exceptions. The
Viewer Extension and Reauthorization Act of 2004, or SHVERA; and the FCC has implemented SHVA’s must carry requirement and adopted further
Satellite Television Extension and Localism Act of 2010, or STELA) allows detailed must carry rules covering our carriage of both commercial and
satellite carriers to retransmit the signals of local broadcast television stations non-commercial broadcast television stations. These rules generally require
in the stations’ local markets without obtaining authorization from the us to carry all of the local broadcast stations requesting carriage in a timely
holders of copyrights in the individual programs carried by those stations. and appropriate manner in markets in which we choose to retransmit the
Another portion of SHVA also permits satellite retransmission of distant signals of local broadcast stations. We have limited capacity, and the
network stations (those that originate outside of a satellite subscriber’s local projected number of markets in which we can deliver local broadcast
television market) only to ‘‘unserved households.’’ A subscriber qualifies as programming will continue to be constrained because of the must carry
an ‘‘unserved household’’ if he or she cannot receive, over the air, a signal of requirement and may be reduced depending on the FCC’s interpretation of
sufficient intensity from a local station affiliated with the same network, or its rules in pending and future rulemaking and complaint proceedings, as
falls into one of a few other very limited exceptions. SHVA also prohibits well as judicial decisions interpreting must carry requirements. For example,
satellite carriers from signing up a new subscriber to distant analog or digital the FCC issued an order requiring mandatory carriage of high-definition
signals if that subscriber lives in a local market where the satellite carrier digital signals in an increasing number of markets each year, requiring
makes available the same-network local signal. SHVA imposes a number of so-called ‘‘HD carry-one, carry-all’’ in all local markets served by 2013. We
notice and reporting requirements, and also permits satellite retransmission may not be able to comply with these must carry rules, or compliance may
of distant stations in neighboring markets where they are determined by the mean that we will be required to use capacity that could otherwise be used
FCC to be ‘‘significantly viewed.’’ In implementing SHVA, the FCC has for new or additional local or national programming services. Moreover,
required satellite carriers to delete certain programming, including sports Congress may amend the must carry rules at any time.
programming, from the signals of certain distant stations. In addition, the •Retransmission Consent. For those local television broadcast stations that
FCC’s continuing interpretation, implementation and enforcement of other do not elect must carry, SHVA also requires DIRECTV to obtain consent
provisions of this legislation as well as judicial decisions interpreting and prior to retransmitting their signals to viewers. Television broadcast stations
enforcing these laws, could hamper our ability to retransmit local and may withhold this consent (subject to a requirement to negotiate for
distant network and superstation signals, reduce the number of our existing carriage in good faith), and other provisions of SHVA prevent DIRECTV
or future subscribers that can qualify for receipt of these signals, impose from providing duplicate out-of-market programming in many instances.
costs on us in connection with the process of complying with the rules, or Thus, where network affiliated television stations withhold consent,
subject us to fines, monetary damages or injunctions. Also, the FCC’s sports DIRECTV subscribers may lose access to popular network programming
blackout requirements, which apply to all distant network signals, may until such consent is restored.
require costly upgrades to our system. The distant signal provisions of
SHVA are now set to expire in 2014. Congress may decline to renew those • Public Interest Requirement. Under a requirement of the Communications
provisions, which could severely restrict our ability to retransmit distant Act, the FCC has imposed certain public interest obligations on DBS
signals. Congress could also adopt amendments to SHVA with respect to operators, including a requirement that such providers set aside four percent
local or distant signals, including limiting the provision of distant signals. of channel capacity exclusively for noncommercial programming of an
educational or informational nature, for which we must charge programmers
•Must Carry Requirement. SHVA also imposes a must carry obligation on below-market rates and for which we may not impose additional charges on
satellite carriers. This must carry obligation requires satellite carriers that subscribers. FCC rules also require us to comply with a number of political
choose to take advantage of the statutory copyright license in a local market broadcasting requirements to which broadcasters are subject under the
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