- The Washington Times - Thursday, March 21, 2002

I've seen a lot of sights over the years on our family ranch in Wyoming, but I never expected to see a cable-company crew stringing wire across miles of grazing land to provide us with cable TV and the option for broadband digital services.

It's not going to happen. The cost would be prohibitive, even if the cable companies were interested.

And having represented a rural state in the U.S. Senate for 18 years, I've heard more than my share of empty promises. So I'm somewhat skeptical when I hear the regional Bell companies promise that they will provide rural America with broadband services if Congress will give them just one more huge handout and shield them from the horror of fair competition.

These are the same companies that have been selling off their rural exchanges as fast as they can find buyers. These are the same companies that have dragged their feet in offering DSL high-speed Internet access to rural areas, even as they were cornering an 86 percent hold on the DSL market by forcing smaller competitors out of business.

Yet I'm confident that rural Americans won't be left on the wrong side of the Digital Divide. The reason for my confidence can be summarized in two words: satellite communications. The satellite industry has a strong track record of serving rural America, not with promises but with programming. This is especially true in rural America. Satellite providers here deliver service in areas that other companies literally won't go near.

Those beach-umbrella-sized satellite receivers from the early days of satellite TV were appearing on ranches and farms long before they began to sprout in suburbs. That's because satellite TV was and remains the only medium offering rural people the chance to watch CNN, HBO and C-SPAN along with the rest of America. Satellite TV meant that the best of pay-TV was just as available to viewers in Sweet Grass County, Montana as it was to viewers in Westchester County, New York.

Having an unsightly dish in your summer pasture was a small price to pay for the benefits of pay-TV. Today, of course, the satellite receivers have shrunk to the size of a pizza box, but the importance of what satellite technology has to offer rural America is expanding. The two leading satellite providers, EchoStar and DIRECTV, want to merge into one company with the combined capacity to offer broadband digital services via satellite along with TV programming.

This merger is a free-market solution to the Digital Divide problem. It would make affordable broadband digital services as easily available to rural areas as satellite TV programming is now. It's in the interest of all rural states to see that the Federal Communications Commission, the U.S. Department of Justice, or any state-level attorneys general don't block this merger or saddle it with unreasonable conditions.

Besides the fundamental benefit of delivering broadband service to rural America, the merger would be a competitive shot in the arm for the whole pay-TV market.

That market was a cozy monopoly held by the cable companies even 10 years ago. Satellite TV changed that. Today EchoStar and DIRECTV have a combined market share of 17 percent, compared to 80 percent for cable companies.

The competition from satellite put the heat on cable providers to roll out new services for customers, including digital broadband services. That's the way a competitive free market is supposed to work.

As of right now, though, the competitive strength of the satellite industry hasn't been enough to stop the cable companies from the hefty price increases they've been hitting consumers with in recent years. That's because satellite providers don't have the broadcast spectrum to offer local programming in many local TV markets. As a result, millions of consumers grumble but still put up with cable's price increases because a move to satellite would mean giving up their local TV programs.

This would change in a heartbeat if the EchoStar-DIRECTV merger is approved. As separate companies, the two satellite carriers can only carry local programming in 42 of America's 210 designated TV markets. The merger, however, would allow the two companies to stop wasting spectrum by broadcasting duplicate programming. This would free up enough spectrum for the combined EchoStar-DIRECTV to reach all 210 markets.

This isn't just hopeful speculation. Last month, both companies filed a proposal with the FCC to launch a new satellite and make local programming available to every consumer in every TV market in the continental United States, Alaska and Hawaii. That's what their combined spectrum could do. And, of course, that spectrum would let them offer nationwide satellite delivery of high-speed Internet access and other broadband digital services at one uniform national price.

Satellite delivery of those services by the merged EchoStar and DIRECTV would be a competitive sweetener for areas already served by both cable and satellite TV companies. For many rural areas of the West, however, this merger offers the only affordable ticket to the digital future.

All government has to do is stay out of the way and let this merger happen.


Malcolm Wallop is a former U.S. senator from Wyoming and chairman of Frontiers of Freedom.


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