LIST OF APPENDICES. SBCA COMMENTS July 29, 2002 MB Docket

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1 LIST OF APPENDICES Appendix A. List of DMAs where local-into-local is available Appendix B. State subscriber counts (from SkyTRENDS) Appendix C. EchoStar Local Carriage Compliance Report (July 3, 2002) Appendix D. SBCA Letter to Powell re: HDTV (July 1, 2002) Appendix E. SBCA Petition for Review (July 22, 2002) Appendix F. MVDDS Petition for Reconsideration (July 26, 2002) Appendix G. Program Access Economic Study (January 2002) SBCA COMMENTS July 29, 2002 MB Docket

2 APPENDIX A List of DMAs where local-into-local is available

3 2002 Local Channels Available via DBS (as of July 29, 2002) Albuquerque, NM Atlanta, GA Austin, TX Baltimore, MD Birmingham, AL Boston, MA Burlington, VT Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbus, OH Dallas/Ft. Worth, TX Denver, CO Detroit, MI Grand Rapids, MI Greensboro, NC Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Kansas City, MO Las Vegas, NV Los Angeles, CA Memphis, TN Miami/Ft. Lauderdale, FL Milwaukee, WI Minneapolis/St. Paul, MN Nashville, TN New York, NY Oklahoma City, OK Orlando/Daytona, FL Philadelphia, PA Phoenix, AZ Pittsburgh, PA Portland, OR Providence, RI Raleigh/Durham, NC Sacramento/Stockton, CA Salt Lake City, UT San Antonio, TX San Diego, CA San Francisco/Oakland/San Jose, CA Seattle/Tacoma, WA St. Louis, MO Tampa/St. Petersburg, FL Washington, D.C. West Palm Beach, FL Source: and

4 APPENDIX B State subscriber counts (from SkyTRENDS)

5 1,322, % 455, % 2,271, , % 136, % 346, , % 70, % 252, , % 293, % 1,334, , % 149, % 478, , % 65, % 186, , % 70, % 283,440 6,451, % 2,516, % 11,535, , % 148, % 812, , % 222, % 729, , % 447, % 1,728, , % 148, % 662, , ,154-1,036,700 KEY 804, % 504, % 1,995, , % 176, % 659,890 Basic Cable Subscribers (% of TV HH) Total DTH Subscriptions (% of TV HH) Total TV Households 3,369, % 2,063, % 7,622,170 * Basic Cable Subscriber counts are obtained from official FCC database as provided by cable system operators. Source: BIGPIPE Basic Cable Subscriber counts are current to April 1, * DTH subscription counts are an aggregate total of DIRECTV, ECHOSTAR, and C-Band subscriptions. Source: SkyTRENDS DTH subscription counts are current to April 1, * TV Households as of January 2002, from Nielsen Media Research as published in U.S. Television Household Estimates: September TOTAL DTH SUBSCRIPTION

6 873, % 438, % 1,885, % 21.43% 690, % 331, % 1,328, , % 278, % 1,143,730 1,018, % 496, % 2,046, , % 650, % 2,172, , % 322, % 1,035,140 2,289, % 917, % 4,571,340 1,005, % 323, % 1,630, , % 355, % 1,036,530 2,010, % 780, % 3,740,290 1,196, % 633, % 2,334, , % 443, % 1,720,010 2,620, % 813, % 4,358, , % 427, % 1,554,570 1,142, % 587, % 2,237, , % 97, % 233, , % 195, % 710,360 1,534, % 889, % 3,106,070 3,351, % 634, % 4,685,560 1,505, % 728, % 2,692,860 1,621, % 901, % 3,178, , % 402, % 1,516,550 3,813, % 1,415, % 6,459, , % 84, % 473,030 4,085, % 1,067, % 6,904, , % 120, % 497,370 1,649, % 239, % 2,413, , % 42, % 397,720 1,006, % 119, % 1,281,450 2,159, % 437, % 3,061, , % 48, % 303, , % 357, % 1,974,280 Washington D.C. 89, % 27, % 237,510 Alaska 106, % 30, % 186,140 Hawaii 303, % 10, % 398, The Research and Data Collection Program of Media Business Corp and the Satellite Broadcasting and Communications Association BY STATE TE APRIL 1, 2002

7 APPENDIX C EchoStar Local Carriage Compliance Report (July 3, 2002)

8 Before The Federal Communications Commission Washington, D.C In the Matter of: ) ) National Association of Broadcasters and ) CSR 5865-Z Association of Local Television Stations ) ) Request for Modification or Clarification ) Of Broadcast Carriage Rules for ) Satellite Carriers ) To: Chief, Media Bureau ECHOSTAR S LOCAL STATION CARRIAGE COMPLIANCE PLAN: 90 DAY REPORT EchoStar Satellite Corporation ( EchoStar ), pursuant to the Media Bureau s Declaratory Ruling and Order ( Order ), DA , released April 4, 2002, hereby files its 90 Day Compliance Report and Plan as required by paragraph 39 of the Order. I. SUMMARY EchoStar continues to believe that its original method for implementing must carry complied with the law. Nevertheless, in its Order, the Bureau offered a number of constructive recommendations that EchoStar has and will continue to implement in order to address the issues raised in the Order. This second Compliance Report, in conformity with the requirements of the Order, incorporates by reference and updates the first Compliance Report filed on May 6, A. Local-Into-Local Status as of July 3, 2002 More Single-Dish Markets Since the first Compliance Report, EchoStar has successfully launched one of its two spot-beam satellites. As a result of the successful launch and operation of EchoStar VII, EchoStar transitioned some markets from a two-dish to a single-dish local service - 1 -

9 offering and introduced other, new markets using a single-dish solution. Where EchoStar VII s spot beams allowed all the local broadcast stations in a given market to be carried, without precluding the addition of new markets within that spot, EchoStar introduced single-dish local service. EchoStar currently offers local into local service in 40 markets, with 13 of those markets receiving single-dish local service. 1 Since activating EchoStar VII s spot beams, EchoStar has moved the following markets, all of which originally received local service through a two-dish solution, to a single-dish local service offering: Salt Lake City, UT; Kansas City, MO; Charlotte, NC; and Raleigh, NC. EchoStar originally introduced local service in Grand Rapids, MI using a two-dish solution but shortly thereafter converted Grand Rapids to a single-dish offering. In addition, EchoStar VII has allowed EchoStar to introduce local service for the first time, with a single-dish solution, in the following markets: West Palm Beach, FL; Honolulu, HI; and Oklahoma City, OK. While EchoStar VII s spot beams enabled EchoStar to transition some markets from a two-dish to a single-dish local solution, and to introduce new markets using a single-dish approach, the new satellite does not have enough capacity to allow EchoStar to introduce single-dish local service in all of EchoStar s target new markets. Rather than freeze the rollout of local service, however, and allow cable television to remain the 1 EchoStar listed in its first Compliance Report five single-dish markets (Austin, TX; Birmingham, AL; Portland, OR; San Diego, CA; and Cincinnati, OH). That list has grown as a result of EchoStar VII becoming operational

10 unchallenged dominant MVPD in the majority of the Nation s DMAs, EchoStar will introduce local service in some additional markets using a two-dish solution. 2 The remainder of this 90 Day Report applies to the two-dish markets, and the measures EchoStar has taken, is currently taking, and will be taking in the near future, to eliminate all forms of perceived discrimination as detailed in the Order. B. Status of Installations and Timetables As part of this 90 Day Compliance Report, the Bureau requests information concerning the following: i. the number of subscribers as of the date of the Report who have requested a second dish to receive local stations; ii. how many such antennas have been installed; and iii. the average time period between a subscriber s inquiry concerning a second dish and successful installation. 3 Below is a chart which contains this information as of June 28, Item 30 Day Report 90 Day Report 150 Day Report Second Dish Requests 12, ,775 5 Completed Second Dish 11,841 54,002 Installations Average days from Work As stated in the first Compliance Report, in the Philadelphia market, some stations are placed on an FSS satellite at the 129 W.L. slot. Reception of these signals is accomplished by the replacement of the standard EchoStar receive dish with a single 24 x 36 inch dish. 3 Order, ,101 second dish requests remained outstanding in the first Compliance Report. 5 21,773 second dish requests remain outstanding. 6 In the first Compliance Report, 7,883 work orders, or about two-thirds of the 11,841 completed second dish installations, were completed less than 8 days after customer request was made. Almost 50 % of the installations were completed less than four days after the customer request. There was an average of 1.7 days from the original scheduled date to the date the work order was completed

11 Order Created to Completion Date II. COMPLIANCE PLAN SPECIFICS A. Consumer Education of Need for Second Dish 1. Problem: The Order found that EchoStar had failed to fully notify its localinto-local subscribers and potential customers of the need for a second dish in order to receive all local television stations in some markets. 8 The Bureau instructed EchoStar to ensure that the communications are effective in providing complete and accurate information promptly and clearly to all subscribers affected by this two-dish plan Compliance Plan Solution: As stated in the first Compliance Report, EchoStar implemented consumer education and notification initiatives to make clear to all subscribers and potential subscribers how they may obtain a free second dish. 10 These measures include: a) a direct and immediate communication to millions of subscribers, including local-into-local subscribers, via a letter specifically addressing the free second dish; b) CSR training to avoid future subscriber confusion; c) changes to advertising materials; d) training for retailers and installers to fully inform subscribers and prospective customers that a free second dish is required in many markets in order to receive all stations; e) changes to the DISH Network website to highlight the need for a 7 32,385 work orders, or almost two-thirds of the 54,002 completed second dish installations were completed less than 13 days after customer request was made. Jobs were completed, on average, 1.7 days earlier than they were scheduled to be completed. 8 Order, Id. at Or in the case of the Philadelphia market, a free replacement dish

12 free second dish to receive all stations; and f) other additional publicity initiatives to ensure that EchoStar subscribers both know of the existence of the second satellite, and also understand that they may receive it, and its installation, free of charge. The letter to local-into-local subscribers, changes to advertising materials, and changes to the website have been fully implemented, as described in detail in the first Compliance Report. The status of the remaining items is discussed below. a) CSR Training to Better Educate Subscribers as to the Second Dish. The Order referenced alleged evidence that EchoStar customer service representatives (CSRs) were not properly conveying information concerning the second dish solution to subscribers. The Bureau indicated that EchoStar should take steps to better train its CSRs as to the workings of the second dish solution. 11 As explained in the first Compliance Report, all applicable CSR scripts have been rewritten to clarify the free second dish offer. CSRs are instructed to state expressly that EchoStar (DISH Network) will install any additional equipment free of any charge Order, 33 ( EchoStar should also better educate its customer service representatives, distributors and retailers to ensure that subscribers and potential subscribers are given accurate and complete information concerning the free second dish offer ). 12 For example, a CSR who is asked about whether a subscriber can receive his/her local stations follows the following script (assuming the subscriber resides in a market where EchoStar delivers local-into-local service): CSR: "Mr./Ms., I do show that you qualify for your local ABC, NBC, CBS, FOX, WB, UPN, and PBS (List only channels that apply out of (city). I also wanted to make you aware that we do have additional local channels available with the installation of a 2nd Dish free of charge." (List the channels for the customer if the customer is interested.) On the issue of whether there is any charge for the second dish, CSRs are being instructed to respond as follows: Customer: "How much will it cost or how can I get that 2nd dish?" CSR: "Mr./Ms., DISH Network is going to provide you with a 2nd Dish and installation free of any charge. If you would like, I could schedule an installation for you now and would be happy to check the available dates." - 5 -

13 90 Day Report Status: In addition to rewriting all applicable CSR scripts and providing initial training for the CSRs, as described in the first Compliance Report, EchoStar continues to update and train CSRs on a regular basis regarding the 2-dish offer. For example, during the week of June 13th, all CSRs received the Local Lowdown training session, in which they viewed an instruction video on EchoStar s local offering and took a quiz on the contents of that video. The video and quiz emphasized that customers in applicable markets wishing to receive all their local stations will receive a second dish free of any charge. For quality control purposes, each CSR turned in his or her quiz to the trainer at the end of each session for review. More generally, every EchoStar CSR spends one hour per week on uptraining. Managerial coaches conduct five-minute meetings every day to review timely and important subjects. CSR managers also use s for real-time updates. CSRs must read or be made aware of a code red immediately; code yellow by the end of the CSR s shift; and code green within 24 to 48 hours. EchoStar s training and updating process regarding measures undertaken to comply with the Order follows this pattern, with CSRs updated on a continuous basis as needed. For example, CSRs have received updates on such matters as which local markets have a single-dish, versus a twodish local solution, and the upgrading of set-top-boxes to allow the display on electronic program guides of all local broadcast stations (see Section II.B, below). All CSRs have access to a web-based Customer Service Center page, which displays the DISH Network operations updates and other instructional material and is updated on a rolling basis. In addition, as described in the first Compliance Report, - 6 -

14 information on local markets is available to CSRs, as it is to the public, through EchoStar s home page. These training and updating procedures are consistent with EchoStar s existing methods for educating its CSR workforce. The same or similar procedures are used to train CSRs regarding new promotions or service offerings. b) Training of and Materials For Installers and Retailers. As stated in the first Compliance Report, in addition to providing retailers and installers with new advertising information, EchoStar is also providing a specially prepared brochure which retailers can use to fully explain the second dish solution for new subscribers. The brochure expressly states that in order to receive the channels highlighted with an asterisk [in the attached local channel lineups], you will need to have a second dish installed. The brochure makes clear that the second dish is free of any charge and can be installed at the same time as other EchoStar equipment for a new subscriber Day Report Status: The new advertising and point-of-sale materials that were shipped to thousands of EchoStar retailers after the first Compliance Report are now the standard point-of-sale materials disseminated by EchoStar and are updated regularly to reflect any changes in local-into-local markets and 2-dish markets. c) Other Ongoing Publicity. The Bureau faulted EchoStar for not continuing to attempt to reach out to its existing subscribers to inform them of the second free dish offer. The Bureau directed EchoStar to engage in immediate and direct communication with all affected local-into-local subscribers, and ensure that the communications are effective in providing complete and accurate information promptly 13 See Order, 32 ( [f]or example, automatically providing the additional equipment to any existing or new subscriber to local-into-local service would likely be an effective remedy )

15 and clearly to all subscribers affected by its two-dish plan. 14 In addition to the measures already described, including the letter sent to millions of subscribers, DISH Network has aired an ongoing informational spot, commonly referred to as an FYI spot, explaining to subscribers that a second dish is required to view some local channels and that the dish is available free of charge. The spot expressly states that there are some stations which can be accessed with a second dish. And because they re included in your locals package, we ll provide the second dish at no charge. 90 Day Report Status: As EchoStar said in the first Compliance Report, the FYI spots provide immediate and direct communications with complete and accurate information promptly and clearly to all subscribers affected by its two-dish plan. 15 The spots have run on up to 87 different programming channels on the DISH Network, at a rate ranging from about 1,500 times per week when DISH Network began the program to about 50 times per week today, and will continue running for the foreseeable future. B. Contiguous Channel Placement and Listing on Electronic Programming Guides 1. Problem: The Order found that EchoStar had discriminated against some stations because they did not appear on the Electronic Program Guide (EPG) if the subscriber did not have the free second dish installed. Because subscribers surfing channels would skip over the wing stations if the subscriber did not have the second dish, the Bureau concluded that these wing stations were not being placed on contiguous channels. The Bureau ordered EchoStar to correct this perceived discrimination by ensuring that information regarding all local channels appear on their 14 Order, Order,

16 assigned channels, and appear on the EPG, regardless of whether the subscriber has acquired a second dish. The Bureau also ordered EchoStar to place the wing stations on the EPG in the same manner and with the same prominence as stations on core satellites Compliance Plan Solution: As the first Compliance Report explained, EchoStar s EPG has always displayed all local stations contiguously and in the same manner (e.g., font size, color, call signs). EchoStar is implementing the Order s suggestion that where a local channel is not available because the subscriber does not have the second dish, the subscriber will still be able to scroll to that channel and see a screen, which will have an explanation about why the channel does not appear and information about how to get the free dish necessary to receive the station. 17 Specifically, when a subscriber surfs to a channel available only with a second dish, and the subscriber does not have that dish, a slate will appear that states, in large typeface: You must have a second dish to view this channel. EchoStar will provide the dish free of any charge. Call DISH. The set top box (STB) software changes currently being implemented by EchoStar allow display of the wing local channels in 16 Order, 28 ( [wing] stations must be displayed on electronic program guides and listed on program menus in the same manner and with the same prominence and accessibility as stations carried on the main satellites ). 17 See Order, 33 ( [i]n markets in which additional equipment is needed to obtain access to certain local-into-local stations, the guide or menu could, for example, describe the equipment necessary to obtain access to each station, including notification that there is no charge for the equipment or installation, and provide clear instructions on how to obtain the additional equipment ). See also id. ( [when] a subscriber attempts to tune to a particular channel number assigned to a local station, the subscriber either accesses the station or accesses a notification that the station is available with additional equipment, the equipment is available without charge, and the procedures to follow to obtain the equipment )

17 all features (view, browse, guide, locks, themes, etc.) similar to how a station carried on a core satellite prior to January 1, 2002, was treated Day Report Status: Since the first Compliance Report, EchoStar has written and tested new STB software and has upgraded millions of STBs. As EchoStar stated, it is implementing the upgrades on a rolling basis, with full deployment anticipated by the end of this month. As of the date of this second Compliance Report, a majority of EchoStar STBs have been upgraded. Since filing the first Report, EchoStar has upgraded the software of the entire series 4900 and 301D population of STBs. It also has upgraded all of the series 3900 boxes and all of the series 301E boxes. These four models represent about 53% of the EchoStar STB population. EchoStar also has developed software to upgrade the series 501 boxes (roughly 3% of all STBs) but has not yet completed testing and upgrading for these models. EchoStar expects to complete these series 501 upgrades within the next two to three weeks. As expected, EchoStar has encountered some irregularities in the new EPG software but expects to be able to rectify the problem in time to complete software upgrades for all receivers by the end of this month. Specifically, software engineers are addressing an EPG software lockup or freeze problem occurring in the 1000, 2000, 3000, 4000, 5000, 6000, DishPlayer (7100/7200) and 2700/2800/3700 series STBs. Once this software-related problem is resolved, EchoStar will be able to complete the final 18 As explained in the first Report, this involves modifications to the STB table acquisition algorithm. When the user selects an uninstalled local channel the STB software will redirect the channel tuning to a locals information channel which resides on the core satellite slot. The locals information channel is a channel that can be shared among the different local channels on the wing satellite as required. This channel will inform the user that he/she is not receiving the local channel and how to go about obtaining an additional dish from DISH Network if desired. The redirection mechanism will not be used when the required wing satellite dish is installed and thus the STB will tune to the correct local channel instead of the "locals information" channel

18 testing and upgrading process. The problem is most likely common among all the aforementioned platforms. Therefore, once they solve the problem, EchoStar s engineers expect to be able to complete testing and upgrading of all these platforms within short order. In sum, EchoStar s EPG upgrade program in accordance with the Order generally is proceeding as anticipated. As of the date of this second Compliance Report, approximately 53% of EchoStar s deployed STB population has been upgraded, and the remaining 47% likely will be upgraded by the end of this month. EchoStar will alert the Commission of any unforeseen obstacles that might arise to prevent meeting the July 31, 2002 target date for completing all upgrades. III. CONCLUSION EchoStar has implemented and will continue to implement a number of the Bureau s constructive recommendations. As described above, EchoStar has completed many of the remedial steps set forth in the Bureau s April 4 Order and the first Compliance Report, and is moving as expeditiously as possible to complete the remaining actions outlined in the first Compliance Report. While EchoStar is contesting the Order s conclusion that EchoStar s pre-existing must-carry compliance plan violated any of the provisions of SHVIA or the Commission s must-carry rules, it is not challenging those remedial measures as such. See Petition for Reconsideration

19 Respectfully submitted, David Goodfriend Director, Legal and Business Affairs EchoStar Satellite Corporation th Street, N.W. Washington, D.C David K. Moskowitz Senior Vice President and General Counsel EchoStar Satellite Corporation 5701 South Santa Fe Littleton, CO July 3,

20 APPENDIX D SBCA Letter to Chairman Powell re: HDTV (July 1, 2002)

21 SATELLITE BROADCASTING AND COMMUNICATIONS ASSOCIATION July 1, 2002 The Honorable Michael K. Powell Chairman Federal Communications Commission th Street, SW Washington, DC Dear Chairman Powell: On April 4, you called upon broadcasters, cable operators and Direct Broadcast Satellite (DBS) providers to reach voluntary milestones that will spur completion of the digital over-the-air broadcasting transition. We congratulate you on your vision and leadership during this challenging transition, and are firmly committed to your goal of bringing advanced television services to consumers, in our case via satellite. I am pleased to report to you today on the progress that the DBS providers have made toward meeting and exceeding your challenge to offer high-definition (HD) programming services to all Americans. DBS is the only multichannel video programming distributor currently providing all of its customers -- more than 17 million DBS households (which translates to 45 million viewers) nationwide -- a 100 percent digital audio and video signal. In addition, the DBS providers are leading the way in offering HD programming to consumers and are well positioned to meet your challenge of providing by January 1, 2003 up to five digital programming services that are providing value-added digital programming (which includes HD) during at least 50% of their prime-time schedule. By providing compelling content on an all-digital platform, the DBS providers are giving consumers a reason to invest in digital equipment. DBS providers offer movies, sporting events, documentaries, concerts, public affairs programming and original series in HD from HBO HD, HDNet, CBS, SHO (Showtime) HD, Discovery HD Theater and certain pay-per-view movies. Depending on the availability of capacity, DBS providers intend to continue increasing the number of HD channels they offer, enhancing the television viewing experience for consumers nationwide. DBS providers also are addressing the digital transition from the hardware side of the equation. Currently, DBS providers offer set-top boxes designed to receive HD signals in any of the ATSC digital formats (e.g., 720p and 1080i). Additionally, certain HD television sets have a DIRECTV system built-in, so consumers can, with only one piece of equipment, receive HD signals via satellite, as well as over-the-air signals from local broadcasters offering digital content. Likewise, EchoStar s Model 6000 set-top box allows consumers to receive locally-originated, over-the-air digital broadcasts. Both the DIRECTV and EchoStar consumer equipment bring the added public interest benefit of contributing to the statutory 85 percent digital television receiver

22 penetration benchmark that must be met before the broadcasters are required to return their valuable analog broadcast spectrum to the Commission, an event that will free up spectrum for new wireless and other services. The SBCA and its members, the DBS providers, programmers, equipment manufacturers and retailers, remain committed to providing consumers with superior quality, choice and customer service. We look forward to working with you, your colleagues at the Commission, Members of Congress and the industries involved toward a successful transition to digital over-the-air broadcasting. Ultimately, it is American consumers who will benefit most from this coordinated effort. Sincerely, Andrew S. Wright President cc: Commissioner Kathleen Q. Abernathy Commissioner Michael J. Copps Commissioner Kevin J. Martin Rick Chessen, Associate Bureau Chief, Media Bureau Susan Eid, Office of Chairman Powell Stacy Robinson, Office of Commissioner Abernathy Susanna Zwerling, Office of Commissioner Copps Catherine Crutcher Bohigian, Office of Commissioner Martin 225 Reinekers Lane Suite 600 Alexandria, VA (703) (703) (fax)

23 APPENDIX E SBCA Petition for Review (July 22, 2002)

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