Dogfight over the airwaves

A bill that would let direct broadcast satellite carriers include broadcast channels in their programming is under fire from ISPs, who claim it will keep them from converging TV and the Internet.

The bill, approved by the House of Representatives on Nov. 9 and under consideration by the Senate at press time, helps satellite broadcasters compete with cable companies by allowing them to negotiate blanket licenses with local TV stations rather than negotiate individual copyright agreements.

Last year, a federal court in Miami ordered satellite broadcasters to stop offering copyrighted local programming - crippling DBS companies in their subscriber race with cable. Cable operators have been able to offer local programming for decades, as long as they apply for blanket licenses, pay necessary royalties and follow blackout rules for sports.

As originally submitted, the new satellite bill also extended the blanket licenses to "other communications channels," such as ISPs. But the Congressional conference committee added a provision specifically barring the licenses for any "digital online communication service."

That change drew protests from various ISPs, including America Online, Bell Atlantic, Cable & Wireless USA, MCI WorldCom and Yahoo!, along with many MP3 music and streaming media providers. Most of the ISPs don't plan to broadcast television programming today, but they are betting the eventual convergence of data and video will give them an edge over traditional TV broadcasters and cable operators.

AOL's recent partnership with Blockbuster is aimed at offering pay-per-view movies over the Web. The carrier also plans to offer AOL TV as early as next year, allowing users to time shift programming to suit their schedules.

"Communications is changing so quickly today that no one knows what the future holds," said an AOL spokeswoman. "We and others in the industry don't think it makes sense for Congress to close any doors, particularly when there has not been a debate or public airing of the issue."

But broadcasters, cable operators and copyright holders such as sports associations like the bill the way it is - as they told Congress in a letter. TV and radio content retransmitted over the Internet "can be downloaded, copied and redisseminated without limit," the letter said.

The cable licensing provision "was never intended to apply to the Internet or the online service community," said a spokesman for the Motion Picture Association of America.

Marybeth Peters, register with the U.S. Copyrights office, added: "Congress has properly concluded that the Internet should be largely free of regulation" - but that lack of regulation makes the Internet "a poor candidate" for retransmission licenses.

The ISPs have no hope of changing the bill in the Senate because conference reports cannot be amended. But the ISPs could have language added to other legislation that would repeal the anti-ISP provision.