Direct Broadcast Satellite (DBS)

Overview

"Direct broadcast satellite," or DBS, is used to refer both to the satellites that provide content and to the type of subscription television service that uses direct broadcast satellites to bring content to subscribers. This is similar to the way in which "cable" is used to describe the technology through which content is provided to homes as well as the television programs that are carried by the cable into the homes. As a technology, DBS uses Ku band frequencies to send digital signals from earth-bound uplink sites to geostationary satellites, which are satellites that are placed in a fixed location in Earth's orbit. These satellites move in tandem with the planet and are thus always in the same position in the sky. This makes it easy for even those who are not technologically minded to set up receiver dishes as the coordinates at which the dish should be aimed do not change. The DBS receiver dish is a 12- to 18-inch diameter dish purchased by individuals or provided by a DBS subscription service. This dish is attached to homes or positioned in the yards of the viewers. From there the content is carried into the home via traditional coaxial cable (the same used by cable distribution systems.)

DBS services are primarily subscription television services that transmit encrypted signals and thus require the receiver to pay a monthly fee for a receiver box (similar to a cable box) to decode the signal. Some transmissions of free channels, however, are available and only require the viewer to make the initial investment in the satellite dish itself. For the most part, DBS reception requires a subscription, and the dish, decoder box, DVR, and other technology are provided by the company that provides the signal. Again, this is very similar to service provided with a cable subscription. The largest DBS providers in the United States are: DirecTV (owned by AT&T) and DISH network (a publicly held company).

The basic technology underlying DBS technology—direct-to-home (DTH) television distribution—was first theorized by science fiction writer Arthur C. Clarke in a February 1945 letter to Wireless Worldmagazine. It was here that the idea of a geostationary satellite capable of reaching an entire nation with its reception footprint was suggested. Clarke's theories were far ahead of technology; it was twenty years before the first geostationary satellite was launched by NASA in 1963 and another twenty until actual direct broadcast of television signals via satellite became a technological and commercial reality. This does not mean that DBS was not on the minds of broadcasters, policy analysts, cable industry pioneers, and futurists during this time, however. According to Parsons (2008), the vision of "global television" was extremely attractive to all stakeholders, as was the ability to give viewers anywhere the option of programming in their native languages. A more practical and local impetus for the development of DBS is that it would serve rural areas that were unserved or underserved by terrestrial broadcasting and cable television.

The commercial and practical development of direct broadcast satellite technology in the United States was first attempted in the early 1980s. Recognizing the ability of DBS to serve remote areas with its large reception footprint, and thus make true nationwide universal television access a reality, the Federal Communications Commission (FCC) commissioned studies on the feasibility of DBS and issued a Notice of Proposed Rulemaking in 1981. This resulted in an explosion of license applications to the FCC for spectrum space on the Ku (Kurtz) band by a variety of companies seeking to establish DBS systems. In 1982 the first authorization to commence service was granted to Satellite Television Corporation (STC) followed quickly by the licensing of United Satellite Communications and Rupert Murdoch's Skyband (Parsons, 2008).

These initial forays were not without substantial challenges. Cable television had long since matured beyond being merely a Community Access Television (CATV) retransmission technology designed to bring local broadcast television to homes that could not receive viewable signals via rabbit ear antennas. By the early 1980s, cable systems were carrying between twenty and forty channels, plus subscription options such as HBO. Cable had saturated many metropolitan areas and suburbs and, as per their original purpose, carried all local channels in addition to nationwide super channels and cable-only networks such as CNN and MTV. In order to compete, DBS systems would have to offer larger and more diverse channel inventories which, at this stage, they were unable to do. Entrenched cable saturation of the market and the initial costs of establishing a large enough DBS service to guarantee profitability, including the building of uplink transmitters, consumer electronics manufacture of the dishes (which were initially extremely large and occupied a substantial portion of a subscriber's yard), and publicity and sales for this new way of receiving distant but not local television signals proved too much for the DBS pioneers. All early operators had ceased service by 1984—while holding on to their FCC authorizations in case changes favoring viable DBS came to pass.

By the early 1990s these changes had occurred. The major development was the advancement in digital compression and digital signal transmission, which substantially expanded the possible channel inventory of digital satellite signals. While the majority of terrestrial analog cable systems provided somewhere between thirty and fifty channels, digitally broadcast satellite services could offer up to ten times that many with a crisper picture and better sound. Blumenthal and Goodenough (2006) note that the industry leaders in this DBS restart were the only four companies left standing after the aborted forays of the 1980s: U.S. Satellite Broadcasting (USSB), DirecTV (at this time owned by Hughes), Primestar, and Echostar (launched as Dish Network.)

DirectTV and Dish Network quickly emerged as industry leaders, and captured new customers in areas unserved or underserved by cable multi-system operators. The increased number of non-broadcast networks producing original material (e.g., Lifetime, TBS, History, Bravo, and BET) made DBS service an equal competitor to cable in areas where cable had reached saturation levels. Additionally, the cost of the home satellite receiver dishes had dropped to a price point which made the startup fees of a DBS subscription much more practical and palatable for the consumer.

Further Insights

The Telecommunications Act of 1996 provided a further boost to the fortunes of DBS companies by allowing cable and satellite companies to provide telephone and data service and thus compete with the previous monopoly on Internet and phone service maintained by telephone providers, such as Verizon. As a result, consumers can choose to get their television, telephone, and Internet service from one cable, satellite, or phone company. Such companies offer a variety of "bundled" packages of voice, data, and television in an effort to attract customers.

This act also codified the generic term "multichannel video programming distributor," or MVPD, as an entity within the regulatory legislation. The act defines an MVPD as "a person such as, but not limited to, a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, or a television receive-only satellite program distributor, who makes available for purchase, by subscribers or customers multiple channels of video programming." Thus, for regulatory purposes, the FCC sees no distinction between DBS and cable systems as both provide television to the home.

While DBS demonstrated substantial viability after its reboot in the 1990s, it was initially disadvantaged by its lack of local channels. DBS subscribers often had to use either an old-school antenna mounted on their home or even "rabbit ears" in order to receive their local television channels. This required a process that, while not technologically complicated, was annoying and disruptive to the seamless "flow" of watching provided by the converter box and remote. In the early 2000s as a result of the Satellite Home Viewer Improvement Act of 1999, satellite broadcasters were able to enter into retransmission contracts with local network affiliates and station groups that owned local stations (Yoo, 2017). As a result DBS subscribers can receive "local in local" programming, that is, all full-power traditional broadcast television channels that operate in their geographic area.

Issues

Among the issues that have always plagued any broadcast technology is the inability to control the reach of the signal. Broadcast footprints (the area in which a satellite's signal can be received, also called coverage) know no national, regional, or local boundaries. Therefore, one of DBS's advantages—nationwide coverage—is also one of its disadvantages, since DBS signals originating in the United States are receivable and able to cause interference in both Mexico and Canada and vice versa. This problem is even worse on continents where many different countries with different languages, cultures, and programming tastes exist in very close proximity to each other. As a result, DBS companies must grapple not only with the regulatory agencies and structures of their primary locus of operation, but also with the International Law Commission and International Telecommunications Union as well as any supranational organizations that may have jurisdiction. The European Union has taken particular initiative to provide guidance and regulation with the June 2015 adoption of the Digital Single Market Strategy for Europe, through which member states agree to (among other free-market friendly activities) engage in cross-national-boundary content licensing agreements that support better access and market growth.

DBS television service has been credited with making global television a reality and allowing immigrant and diasporic communities to remain culturally connected to their countries of origin. DBS receiver dishes can be shifted to point toward any satellite coordinates making it easy to receive programming from broadcasters outside one's national boundaries. This has both increased the ties between immigrant communities and their homelands as well as raised concerns about the importance of assimilation and the role of mass media in this process (Nevradakis, 2011).

For both cable and satellite providers, contemporary threats come more from forces and entities outside the traditional television industry than from familiar competitors within it. The rise of over-the-top (OTT) streaming television delivery systems (apps and other proprietary software packages that allow for mobile viewing away from the home "box") and services such as Netflix, Amazon Prime Video, Disney+, Hulu, YouTubeTV, and AppleTV (a non-exhaustive list of the competition) have encouraged "cord cutting." Consumers with broadband may "cut the cord" attaching them to expensive cable and satellite television providers, cancelling or substantially scaling back subscription television service in favor of programming delivered via the Internet. This has led industry leaders DirecTV and DishNetwork to create their own "television everywhere" OTT services such as DirecTV Now (later renamed AT&T TV) and Sling TV – both of which allow subscribers to watch their television on the go. Although DBS providers still held the lead in market share in 2022, industry leaders, Dish Network and DirectTV, have declined in response to the popularity of the explosion of OTT subscription options. According to Statista, the OTT video segment of the media market was predicted to increase by 1.1 billion users (20.7 percent) between 2024 and 2029.

The U.S. pay television industry is in a state of flux. Among the major issues that will decide its future are: subscriber payment thresholds—that is, how much individuals are willing to pay (and to how many different companies) for the content they want; the growing popularity of "skinny bundles" of smaller numbers of channel inventories provided at a lower price to predominantly online viewers; the ways in which the satellite and cable industries respond to these challenges; and the legal definition of MVPD. YouTubeTV and other Internet-based distributors of live television have not been included in the FCC's definition of MVPD and are thus exempt from requirements such as "carry one carry all" (a provision that requires MVPDs to strike retransmission deals with all local channels receivable by broadcast in any geographic area). In all of these areas, DBS maintains an advantage over terrestrial systems such as cable, as there will, due to the geography of the United States always be millions of rural households that can only receive broadcast and pay television via satellite.

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