- - - Hatch Opens Conference Committee - - -

A small, crowded room in the nation's Capitol building was the site Tuesday of the first official meeting of a House/Senate Conference committee charged with drafting a final version of new satellite legislation.

The committee's chairman, Sen. Orrin Hatch (R-Utah), opened the hearing. "We are all in agreement that it is time to update the legal and regulatory framework governing the satellite industry, and allow the industry to take advantage of emerging technology to become more fully competitive with its rivals in the market," he said.

Hatch outlined issues the conference committee must grapple with: Eligibility for distant network signals, retransmission consent, must-carry and exclusivity rules, and local-into-local service.

The other conferees, who came from Judiciary and Commerce committees in both the House and Senate, also made opening statements. Those who were able to attend the meeting - limited space prevented some interested onlookers from sitting in - said the statements were generally on par with the individual positions taken by legislators in the past.

This maiden meeting was a formality necessary for legislative staffers to begin the concrete business of merging separate House and Senate satellite bills passed earlier this year. The tone set at Tuesday's hearing indicated that conferees would try to finish their work before the end of the year.

- - - NRTC Welcomes NAB/Rural TV Help - - -

Bob Phillips, president of the National Rural Telecommunications Cooperative, extended an open invitation Tuesday to Eddie Fritts and the National Association of Broadcasters "to work even more closely with us so that all consumers can receive local programming."

Phillips' invitation came a day after Fritts, the head of the broadcast lobbying group, urged all parties interested in the developing satellite legislation to work on a solution that will ensure local-into-local service for rural viewers and unserved TV markets.

"NRTC is pleased that the National Association of Broadcasters has publicly agreed with NRTC that pending satellite legislation include provisions ensuring that all consumers - especially those in medium and small markets - have access to local broadcast network signals via satellite," Phillips said. "NRTC has expended considerable time and energy on the development of a comprehensive pro-consumer plan to assure that rural America has access to local signals.

"Thanks to allies on Capitol Hill, as well as in government and in the satellite industry, the elements of a viable plan are coalescing."

The NRTC has been in discussions with government agencies and other entities to secure funding sources, in the form of federal loan guarantees, that would help defray the high costs of a local-into-local project, Phillips said. "This option would have no impact on the Federal budget," he added. "We are not seeking federal dollars for this project."

- - - SBCA Challenges Growing Northpoint Support - - -

The Satellite Broadcasting and Communications Association stepped up its opposition to Northpoint this week, sending a letter to Vice President Al Gore outlining its concerns regarding the controversial technology.

Northpoint wants to provide a terrestrial-based video service using DBS frequencies. The SBCA, EchoStar and DirecTV have voiced concern over the Northpoint proposal, fearing that it would interfere with their digital signals.

"The DBS industry has invested billions of dollars to ensure that more than 10 million consumers it serves, and the millions more it hopes to serve, receive the clearest possible signals," SBCA President Chuck Hewitt said in the letter to Gore. "The introduction of interference now would have a disastrous effect on DBS, the multichannel video provider that the FCC calls the most promising competitor to cable."

The SBCA challenge comes as the National Telecommunications and Information Administration is considering support for the Northpoint technology in a filing with the Federal Communications Commission.

"The FCC consistently has rejected earlier proposals to share the DBS band because it determined that terrestrial use of the band would cause interference to DBS signals," Hewitt said in his letter. "If permitted to operate in the DBS band, Northpoint's proposed system would cause the same ruinous interference."

- - - DirecTV Announces Airborne Plans - - -

DirecTV announced Tuesday that DirecTV Airborne, a live satellite entertainment service for commercial airlines, will make its in-flight debut this fall.

Alaska Airlines, Legend Airlines and JetBlue Airways - the latter two being new airlines - will carry DirecTV Airborne. The service will be viewed on in-flight equipment provided by LiveTV. An antenna will sit on top of the aircraft's fuselage and receive programming from DirecTV satellites located at the 101 degree orbital slot.

Passengers will be able to privately view DirecTV Airborne on flat screens installed in each seat back. The in-flight programming service will feature 24 channels including four ESPN networks, Bloomberg Television and several channels from Discovery Networks.

- - - Hughes Adjusts Outlook For 1999-2000 - - -

Hughes Electronics said it expects to report a loss in 2000 and will incur a larger loss than analysts forecast this year due to higher costs at its DirecTV Japan unit.

DirecTV Japan, 42 percent-owned by Hughes, has suffered some due to a weakening yen. The company also may take a larger stake in the Japanese venture, further increasing costs.

ING Barings' Rob Kaimowitz lowered his share price targets on Hughes Electronics for 2000. He kept his strong buy rating on the stock, but made the share price adjustments due to "accounting changes, higher than expected depreciation and greater than expected investments at DirecTV subsidiaries."

Because of those changes, ING Barings reduced its year-end 2000 price target to $73 per share from a previous forecast of $80.

- - - COMP WATCH: - - -

• AT&T Eyes Set-Top Box Deal -
  AT&T is expected to announce a set-top box deal with merger partners General Instrument and Motorola that could bring in up to $1 billion for the two companies, the Wall Street Journal reported. The publication said AT&T plans to buy up to 2 million set-top boxes from GI and 1 million cable modems from Motorola. Motorola plans to buy GI for about $11 billion.

• Eastern Show Highlights New NCTA President -
  Organizers of East Coast Cable '99, which will take place Oct. 12 - 14 at the Baltimore Convention Center, announced this week that the new president of the National Cable Television Association (NCTA), Robert Sachs, will speak at this year's show. Sachs, a former legal affairs and public policy consultant, succeeded Decker Anstrom, who left the NCTA in August to become president of The Weather Channel.

• Brokaw To Moderate Web Panel -
  On Thursday, Oct. 14, the New York New Media Association's 1999 Evening Panel Series will host a program called "And That's The Way It Will Be: How the Internet is Changing the Way We Get Our News & The Business Of News." The discussion will be moderated by NBC's Tom Brokaw. Panelists include Steven Brill of Brill's Content, James Cramer of TheStreet.com and David Talbot of Salon.com. It will take place at 7:30 p.m. in Haft Auditorium at the Fashion Institute of Technology in New York City.

• Safeway Explores AT&T's New Media -
  The supermarket chain Safeway has joined AT&T Broadband & Internet Service' New Media Alliance, a group that explores new strategic advertising and marketing programs including the upcoming testing of interactive and addressable advertising applications on the cable provider's digital platform.