New SBCA Leader Faces Challenges

Richard DalBello’s appointment as the next president of the Alexandria, Va.-based Satellite Broadcasting and Communications Association (SBCA) seems to be a popular choice among those who understand the challenges of the job but he will not be insulated from facing formidable cable and broadcasting adversaries in Washington, D.C.

DalBello, who will become the SBCA’s new president March 30, will not need to change his commute to work each day because the SBCA shares office space with the Satellite Industry Association (SIA), a sister organization he has headed for the past three years. At the helm of the SIA, DalBello has been a strong advocate for satellite manufacturers, operators and ground equipment suppliers on a variety of regulatory and public policy issues.

The SIA, which until January 2002 was a division of SBCA, focuses on the hardware and launch side of the industry, while SBCA addresses the consumer services side. There are many issues on which the two groups work closely together. A search is underway to find a new SIA chief.

DalBello, 50, now will turn his attention to representing the satellite TV and radio companies that are becoming the industry’s biggest growth sector. With the SBCA wielding just a small fraction of the clout and funding of its cable and broadcasting counterparts, the group frequently is outgunned when rival industries bring in their heavy artillery to lobby issues of importance to them.

David Moskowitz, general counsel of EchoStar Communications [DISH] and current SBCA chairman, spoke boldly last week by saying DalBello’s past experience in the public and private sectors gives him an “unmatched appreciation” for the complexity of the issues affecting the satellite broadcasting industry. DalBello also has demonstrated the ability to lead and build consensus in an environment often characterized by rapid change and strongly held opinions, Moskowitz added.

“I am confident that Richard possesses the skills, energy and enthusiasm to be our industry’s chief advocate,” Moskowitz said.

DalBello offered brave words himself, while acknowledging he will confront major issues immediately upon his arrival at the SBCA.

“The SBCA job is an extraordinary opportunity and a unique challenge,” DalBello said. “Issues such as the reauthorization of the Satellite Home Viewer Improvement Act (SHVIA), which is currently before the Congress, and the increasing problem of local taxation, will provide us with great opportunities to reinvigorate the SBCA and to expand our membership in the coming months. I look forward to leading an industry that has committed itself to providing competition and choice for consumers throughout the United States, regardless of location or geography.”

Bob Marsocci, senior director of communications at the largest U.S. satellite TV services provider, DirecTV, said DalBello brings impressive experience and expertise to the satellite broadcasting industry at a “critical time” with SHVIA and myriad other issues on tap.

Two of the people who know what DalBello will be encountering as he takes his new job are his immediate predecessors at the SBCA.

Andy Wright stepped down from the SBCA presidency in September 2003 after a highly successful “Retailers’ Rally” in Washington, D.C., that brought dish-dealers nationwide to Capital Hill to meet with lawmakers and their staffers. That creative approach to help the satellite-broadcasting sector press its case countered the big-money campaigns of cable operators and broadcasters, and it may need to be expanded to help the comparatively small sector avoid harmful legislative and regulatory changes. For example, the battle over copyright law between 1999 and 2000 involved the National Association of Broadcasters (NAB) and the National Cable & Telecommunications Association (NCTA) each spending an estimated $800,000 for lobbying, compared with roughly $20,000 for the SBCA.

DalBello is an “excellent choice” who is a respected Washington, D.C., insider and a bright, hardworking executive who has experience with all aspects of the satellite industry from building and launching satellites to the delivery of services to the consumer, said Wright, who headed SBCA between 2001 and 2003.

“Richard and his predecessor Clay Mowry built SIA into a strong organization that will undoubtedly continue to serve its members well,” Wright said. “With Richard at the helm of SBCA, the groups will most certainly find even more areas for cooperation.”

The most immediate issue facing the DBS industry is SHVIA reauthorization. When SHVIA was enacted in 1999, it allowed DBS to rebroadcast local signals into local markets for the first time. This breakthrough made satellite truly competitive with cable, and it sparked a boom in subscriber growth for both DirecTV and EchoStar’s DISH network. Both companies today now combine for more than 21 million subscribers across the United States.

SHVIA has allowed consumers in more than 112 designated metropolitan areas (DMAs) — nearly 90 percent of U.S. television households — to receive their local broadcast stations via satellite. SHVIA’s Section 119 also allows DBS providers to make network programming available to viewers who are unable to receive the signal of their local network affiliates over the air.

“Without distant network signals many subscribers would be left with no way to receive network programming,” Wright said. Section 119 will expire on Dec. 31 this year, unless Congress acts to preserve or improve it, he warned.

“When SHVIA was enacted, it gave cable some unfair advantages,” Wright said. “Reauthorization provides Congress with an opportunity to ‘level the playing field’ and make satellite a stronger competitor in the multichannel video programming distribution marketplace.”

For example, Wright explained, cable operators:

• Enjoy a permanent compulsory license, while satellite must revisit Congress every five years to receive reauthorization;
• Pay far lower per-subscriber royalty fees for distant network stations and superstations than do satellite providers for the exact same programming;
• Wield a competitive advantage because they can import stations from neighboring DMAs under what is called the “significantly viewed” rules, while DBS cannot offer a full complement of local broadcast signals in many smaller markets.

Further, unless Congress acts to extend the Grade B grandfather clause of Section 119, thousands of DBS customers will lose their distant network signals, Wright warned.

“Richard’s experience in Washington will help SBCA lead the industry to address these issues and provide consumers with more competition,” Wright said.

Chuck Hewitt, who served as president of the SBCA during the formative years of DBS in the 1990s, said DalBello is a “good catch” for the organization.

“I anticipate he will do a great job in a very difficult position,” said Hewitt, whose tenure with SBCA and a predecessor organization spanned 18 years between 1984 and 2001. “His biggest challenge will be uniting an industry which has historically been divided. But with News Corp’s purchase of DirecTV, there is an opportunity to accomplish such cooperation. The most pressing issue he faces is that the satellite industry is behind the curve on the renewal of SHVIA and a great deal of effort will have to be expended over the next several months on that legislation.”

DalBello also will be dealing with different issues upon his switch from the SIA to the SBCA, Hewitt said. Although they are sister associations, SBCA represents an industry focused on U.S. consumer television and broadband services that entail policy matters ranging from copyright and program access to state taxes. SIA takes an international view that spans widely from launch and orbital issues to ITU policy matters.

“With Rich at the helm of SBCA, I would expect that he will be able to achieve greater cooperation between the two associations,” Hewitt said.

DalBello joined SIA in August 2001, bringing with him more than 20 years of experience in the space and communication fields. Before heading the SIA, DalBello was general counsel of startup Spotcast Communications. He previously worked as vice president of government affairs/North America, for ICO Global Communications, a global provider of mobile satellite communications services.

Earlier in his career, DalBello served as the assistant director for aeronautics and space in the White House Office of Science and Technology Policy (OSTP), where he championed increased competition in the international satellite industry, developed next-generation launch technologies and encouraged commercial use of the Global Positioning System (GPS).

DalBello’s entrepreneurial, association and government experience offer him a useful background that could resonate with lawmakers and regulators as he tries to help ensure satellite broadcasters are not steam-rolled on SHVIA and other key issues that hold profound implications for the industry’s future.

–Paul Dykewicz

(Richard DalBello, SIA, 703/739-8357; Andy Wright, 703/403-1172; Chuck Hewitt, 410/544-4108; Bob Marsocci, DirecTV, 310/964-4656)