A highly controversial proposal by Communications Satellite Corp. that would bring the company into the broadcasting business is expected to get a boost tomorrow when the Federal Communications Commission takes up touchy policy issues raised by direct broadcast satellites (DBS).
Implementation of the DBS systems would be a major step for the communications firm, moving it out of the business of simply transporting other firms' signals and into the realm of consumer services and program production and distribution.
To the displeasure of many of the nation's broadcasters, Comsat, if successful, could become a direct challenger to the current over-the-air cable television systems. In fact, in a report to the commission earlier this year, a consultant said DBS could "clearly present an alternative to the present television networks."
Through a newly formed subsidiary, Satellite Television Corp., Comsat plans to pour hundreds of millions of dollars into the DBS project, which the company hopes will go on line in 1985.
What Comsat is talking about doing is offering two or three channels of nationwide broadcasting to homes across the country. That programing, without commericial interruption, would include movies, sports, educational and cultural shows, to be obtained from traditional and some new production sources. Comsat, however, would package the shows for viewers.
"It would bring a rich variety of program choices to many rural and remote areas of the country for the first time," Joseph Charyk, Comsat's president, said in May. "And it would have the capability to deliver programming to audiences with particular viewing interests."
Comsat will use regional sales, service and installation firms across the country to place small satellite receiving dishes on or beside homes across the country in setting up what in effect would be its own nationwide television network. The potential audience could be as high as 60 million viewers, according to some industry estimates, although Comsat could break even on the service with only 3 million to 4 million viewers.
Comsat has given few details about the proposal, but it could cost consumers anywhere from $150 to $300 to purchase and install the satellite signal receivers. The monthly program fee would be anywhere from $15 to $40.
But major financial, regulatory and perhaps even congressional hurdles still face the District-based satellite communications firm in its effort to get into the television business.
After Comsat negotiations with Sears Roebuck and Co. designed to make Sears a financial and marketing partner broke down in April, Comsat has continued its search for a DBS funder but has yet to be successful. A Comsat spokesman says only that discussions are continuing with a number of companies.
The FCC tomorrow only will start to address the problem by issuing proposed guidelines for the DBS systems. Comsat officials say the company hopes to file a formal application to introduce the service next month.
Presumably the commission will issue an inquiry notice designed to lay out the issues in a regulatory framework. It is likely that the commission, in line with its deregulatory posture, will in effect endorse the DBS concept, viewing it as another facet of the television alternatives. The FCC is likely to suggest that DBS should be viewed as another new competitive broadcasting force along with pay TV and other systems.
Nevertheless, it is unclear under what basis the new service would be regulated.
Even with an FCC framework, little actually can happen on DBS until after the 1983 Regional (Western Hemisphere) Administrative Radio Conference. That parlay will be charged with allocation already tight satellite space and assigning frequencies to various communication interests.
Finally, the entire plan also could wind up before Congress because it touches on Comsat's basic mandate. The Communications Satellite Act of 1962, the federal law which set up the company, limits Comsat activities to basic satellite services.
In a letter to key congressional committee chairmen, American Broadcasting Cos. has asked for a congressional review of the entire issue, saying that the FCC is biased toward DBS. Other broadcasting groups also have raised questions about the legal status of DBS.
Whether Congress is inclined to take on these issues is another question. Rep. Lionel Van Deerlin (D-Calif.), chairman of the House communications subcommittee, has urged the FCC to allow DBS to get off the ground.
"If government doesn't get out of the way, DBS will never get a market test, and the viewers will never know what they've missed," Van Deerlin said yesterday.
The National Association of Broadcasters has said that DBS has the potential to destroy local broadcasting and even threaten the local television station business.
FCC officals and Van Deerlin apparently agree that there is no need for new law on the subject, and one FCC official calls the industry's criticism "blatantly protectionist."
"You can't rest forever on the assumption that local television is somehow conceived in heaven," Van Deerlin said. "They've [the networks] got a pretty good grip on the delivery of television to the American public. They've got it, and they want to keep it."