There's only one thing more confusing than picking a long distance telephone carrier and that's trying to figure out what's the best deal in subscription television. Of course, it wasn't always this confusing. With very few exceptions, from the late 1940s until the 1970s, most Americans watched over-the-air commercial television. Community Antenna Television (CATV), as Cable TV was known in the early days, was mostly a rural concern, making it possible for areas not served by any TV stations to tube out with the rest of us.

Things changed in the '70s with the introduction of Home Box Office (HBO), a pay TV channel delivered to CATV systems via a land-based phone line. From this point on, America's long resistance to the concept of pay television would slowly erode to the point where, twenty years later, the average cable bill is over US$30 per month and the average satellite TV bill is $10 more.

We Like To Watch Having gotten a head start on satellite, cable TV now enjoys a huge audience, with over 11,000 cable systems reaching 65% of the U.S. market and billing sixty-seven million subscribers monthly. C-band satellite television began in the late '70s, and by the mid '90s, took in over three million subscribers. Direct Broadcast Satellite (DBS), launched less than three years ago, has already pulled in over five million paying customers. Another two million customers are served by Multi-channel Multi-point Distribution Systems (MMDS) which transmit cable fare via ground-based microwave transmitters to small, dish-like wire antennas.

While all this satellite, cable, and pay TV activity has been going on, terrestrial broadcasters have not exactly been asleep in the control room. Over the last twenty years, there has been a huge increase in the number of new over-the-air channels popping up on TV sets nationwide. With the proliferation of new UHF stations, the introduction of Low Power TV (LPTV), the addition of translators and repeaters, America's VHF and UHF-TV bands are jam packed. The success of the FOX network has led to the creation of two more over-the-air networks, United Paramount Network (UPN) and the Warner Brothers (WB) network, whose daily satellite feeds join those of other broadcasters serving the new independent TV stations.

One reason satellite TV has been so successful is that it provides even more channels than cable. DBS providers boast 150 channels of TV viewing and C-band viewers have access to even more. There seems to be no limit to our video jones, but just how happy are we with the addiction? Before DBS loomed on their horizon, the cable industry exhibited a monopolistic arrogance last seen by AT&T just before its break up. Forced to address the concerns of consumers fed up with sky-rocketing cable bills, poor service, and limited channel capability, the cable industry launched a PR campaign in 1995 to shore up its crumbling image. Two years later, an industry survey showed "...consumer perceptions of cable are improving." Not by much apparently, because the numbers were never actually published. Satellite TV didn't fare much better in its own study conducted last year. While survey respondents were overwhelmingly aware of C-band and DBS, most were without a clue as to how these services stacked up against cable with regard to value, service and reliability.

Legal Meddling America's television industry resembles a tag-team wrestling match held inside a three ring circus. The players include the National Association of Broadcasters (NAB), representing the nation's over-the-air TV industry, the National Cable Television Association (NCTA), representing the nation's Cable TV industry, the Satellite Broadcasting and Communications Association (SBCA), representing the satellite TV industry, the Federal Communications Commission (FCC), which acts as referee and ringmaster, and of course, Congress, always eager to pass laws regulating or de-regulating various industries depending on perceived public concern (and what looks good in an election year).

All of these entities are constantly battling and/or teaming up with each other, depending on prevailing moods, in a way that must make the World Wrestling Federation jealous. So, who's representing consumers? Generally it's up to the courts to adjudicate in the people's favor, but other groups occasionally come forward. A case in point: Currently, the Consumer's Union is asking the FCC to freeze cable rates which, they say, have increased at three times the rate of inflation since the passage of the Telecommunications Act of 1996 (which was supposed to rein in said rates). The NCTA, happy at the rate hike, is unhappy at the CU's interference; the SBCA and NAB are happy to see the NCTA squirm.

Here's another case in point: the Copyright Office is being asked to increase rates DBS customers must pay for rights to see "non-local" broadcast TV programming from 6 to 27 cents per customer. The NAB and NCTA are happy, the SBCA is unhappy and so are members of Congress. You can appreciate the mess.

Finally, there's one other player: Wall Street, that field of schemes where the motto is "If you bill it, they will pay." Industry analysts are not impressed with the progress of the satellite television industry. Indeed, a gloomy picture of the industry can easily be painted. The big dish C-band universe, reeling from DBS competition, has lost over a million subscribers in the last three years; of the four DBS players, one (AlphaStar) has gone bankrupt another (EchoStar) is said to be in "...shaky financial condition." What will keep the satellite television industry from remaining a niche market is education. The industry's own survey said it best: the public doesn't know cable from satellite.

Satellites vs. Cable 101 Cable suffers from one simple drawback: you can only cram so many signals on one coaxial cable. Digitizing a signal helps expand the capabilities of delivery, but such system upgrades are expensive and add to ballooning rates at which customers are already balking. Digital transmission has its limits on cable too and it can't compete with the huge bandwidth available via satellite. With the coming of High Definition TV (HDTV), even greater demands will be put on cable's carriage capabilities. In addition, cable reception requires every potential customer's house to be passed by a cable provider and each house individually must be physically wired to the system. The extra hardware and personnel add up to more expenses which is why cable systems abandon densely populated urban areas and sparsely populated rural ones. Traditionally, cable has "cherry picked" the easiest-to-reach customers.

A DBS satellite dish and receiver

DBS satellite broadcasting's big advantage is that the entire line-up of programs, all 150 channels worth, are beamed directly to every house across the entire country with a line-of-sight view of the satellite. Even high-rise, densely populated urban areas can easily be served with Multiple Dwelling Unit (MDU) arrangements which allow entire apartment buildings to be served via one roof-top installation. Since DBS dishes need to look only at one satellite, these installations have no moving parts and very low, if any, maintenance requirements. One other disadvantage with DBS is that of the remaining three program providers, DISH (EchoStar), DSS (DirecTV/USSB) and Primestar, none are compatible with the other. If you buy a DISH system and two years later decide you'd like to try DSS, you'll need a new dish and receiver. Competition stops as soon as you've made your purchase. Of the three, only Primestar does not require you to purchase the receiving equipment. They do, however, charge an installation fee which can range from $100 to $200. DISH and DSS allow customers to do their own installation, however you may pay extra for an "installation kit."

A C-band satellite dish

C-band satellite delivery is more severely limited because of the requirement of placing a much larger dish for reception. For optimum viewing, C-band installations must to be able to "see" satellites on an arc from east to west. The need to steer the dish across the arc adds to the expense and the upkeep of the system. C-band viewers are required to buy their systems which may or may not include installation. The trade-off, however, is a much greater selection of channels and potential for much cheaper monthly subscriptions.

Let's Go Shopping Now that you know the difference between cable and satellite TV, let's get our credit cards out and go shopping! This is where the difference between C-band and DBS satellite TV is most obvious. While DBS programmers engage in a hardware price war, C-band gear remains relatively high priced. DBS providers usually have some sort of purchase incentive program going with dealers and it's wise to shop around. I've found wide disparity among the dealers I've talked to in small towns, medium-sized cities and large city markets. The same holds true for C-band. Some small town dealers may not stock C-band systems in their inventory but will order them from their distributor when they've made a sale. Don't be afraid to buy through mail order companies. Most sell the same brands as the store-front dealers (with the same warranty), at discounted prices. Just don't forget to figure in shipping. Charges for a 10' dish may run as high as $100, actuator motors may cost $20 to ship.

There are some very unscrupulous dealers out there. Some would sell you a DBS system and include the cost of the system in your monthly program package and insist you sign up for a 5 year subscription. Buying a system this way could make it cost many times more than the original $200. Stay away from "packages" where the system price is rolled in with the subscription.

If you're buying from a dealer, be clear on what's included in the purchase price. Some will offer additional discounts for signing on with their premium program packages. Take a close look at the figures to see if it's to your advantage. Most will offer "extended warranty" packages. These add-on warranties are often not worth the extra charge. Most satellite equipment is well-made and quality control is stringent. Future damage due to lightning or other natural causes may already be covered by your home owners insurance. Consider buying lightning protection devices.

Big savings can be had by buying a used satellite TV system. While used DBS systems are rarely available, there is a large market in used C-band systems. Many dealers, who have taken C-band systems in trade for DBS systems, are happy to make deals on these systems. Individuals who are switching over to DBS are also happy to see their big dish go at a very favorable price. Some may actually pay you to take the thing away! It never hurts to inquire. Two excellent, used receiver brands to look for are General Instrument and Drake. In general, used systems to avoid are older systems (over 7 years old), off-brand receivers (they're much harder to find repair parts for), non-working systems (repair will likely cost more than a new system). Make sure the system works before you buy it. It's best to see it up and running at its original location. Take care in dismantling and re-assembling.

Buying closeouts of brand new old stock receivers should be considered. These products are often half-price and covered by the manufacturer's warranty. Popular brands will usually mean that a large stockpile of repair parts are available. Add the name Uniden to this list. Call manufacturers for "factory serviced" specials. Often these companies sell refurbished receivers which were returned under the warranty program. Used receivers without remote controls will often be sold at deep discounts. Replacement remote controls are available but expect to pay a premium price for them. In addition, universal remote controls, available from many electronics retailers, may be used for most popular brands and models.

Checkbook Programming Television programming is the other place where DBS and C-band are most different. With DBS, if you don't pay, you don't see anything. As long as your account is current, they'll make sure you have access to the programming you've paid for. Once you decide not to pay, the programming is shut off and there is no other possible use for the equipment. With a C-band satellite system, paying for programming is only one option. There are literally dozens of channels which are "in the clear" (i.e. unencrypted). There are also dozens of audio channels available for free. It's possible to buy a used C-band system for under $500, pay nothing for video programming, and still enjoy a wide variety of free TV and audio entertainment.

Just how expensive can a satellite video habit be? The question maybe should be: "How much can you afford?" On DSS (DirecTV/USSB), to have access to every available video package, including all sports channels, movie channels, regular cable channels, and special seasonal sports packages, but excluding pay-per-view movies and events, you could spend over $100 per month. The same package on Primestar would cost even more. DISH is not far from that mark.

So just how cheap can you get by on DBS? The cheapest possible package is DirecTV's "Limited" package ($5.99/month) and they do mean limited: three channels which include Home Shopping Network, QVC (another shopping channel) and Bloomberg Information TV. Next is USSB's "Basics" which offers eight channels (three of which are music channels) for $7.95 per month. Primestar's cheapest package is its "Prime Value Channels", 41 channels of cable basics for $32.99 per month. If you wanted The Weather Channel you'd have to step up to the "Prime Entertainment" package for which you'll be charged $43.99 per month. For premium cable channels, such as HBO and Showtime, you'll have to step up to their "Prime Hits" package which is $59.99 per month. That's a habit which will cost you over $700 per year.

A la carte services, or paying only for channels you want to watch is a foreign concept to DBS. DirecTV and DISH offer very limited a la carte choices. It is, however, standard in the C-band programming business. Virtually all programming providers allow a la carte subscriptions with only a minimum channel number, usually five, required. In addition, discounts are given for subscriptions paid annually. For instance, The Weather Channel (not even available in Primestar's $32.99 per month package) can be ordered through TurnerVision at $.65 per month, but if you pay annually, it goes down to $.58 per month. So, what's the cheapest possible C-band subscription? Again, using the TurnerVision programming list, and paying annually for five channels I've picked from the list, here's what you get: The Weather Channel, Independent Film Channel, Turner Classic Movies, Arts and Entertainment Channel, Cable News Network CNN Headline News, CNN International, CNN Financial News, CNN Sport Illustrated (these count as one channel for billing purposes). The grand total: $3.97 per month. For this we get news, sports, weather, entertainment, international news, financial news, old movies (commercial-free), new movies (commercial-free) and headline news. No DBS system can offer this kind of value.

The Bottom Line Many DBS dealers would have you believe that a complete C-band system is way out of line with DBS prices. But, let's just take a look. With Primestar, for example, the total cost for getting started is only $150. But their minimum package is $32.99 per month (no discount for paying annually). That's just under $400 per year. Suppose you stay with them for five years. With installation, you will have paid out over $2,100. With DISH the minimum is $19.99 per month or $220 annually (they give you close to a $20 discount for paying by the year). Adding $200 for the receiving equipment, assuming you do the installation yourself, the total for five years would be $1,300. DSS, figuring the same equipment price and basic subscription rate, is the same.

C-band is a little different. A minimum system, complete with decoder module and dish drive, can be mail ordered for just under $1,000. Assuming a similar basic programming package to the DBS examples, the cost is $109.95 per year. At the end of five years, you will have paid $1,550 total for programming and equipment. The costs are almost identical. [If you figured the bare minimum of $47.64 per year, your five year total, dish and all, would be $1,238. The cheapest of them all!] The big difference is that in addition to those basics, C-band offers all the extras that DBS leaves out: dozens of free, unscrambled channels (including newly launched cable channels and others such as NASA-TV unavailable on any DBS service), news feeds, sports backhauls, SCPC and FM audio services and international TV broadcasters.

But, what about the future of C-band? Aren't all the channel going digital? Won't a C-band system be obsolete in 5 years? The future for C-band satellite television is just as stable as any other mode. New C-band satellites (with 15-year life spans) are launched every year and more are on the drawing board. A C-band system installed today should be receiving programming 15 years from now. While many channels are being launched in a digital format, most will maintain an industry standard VideoCipher II encrypted feed as well. The reason is simple: there are over two million residential customers for C-band VCII programming and that represents an $80 million a month income source for those programmers. Not an insignificant sum. And, General Instrument, maker of the VCII modules, will continue to make that product for years to come.

To be sure, many who opt for DBS may have no other choice. The little dish certainly has its place, particularly in crowded suburban and urban locations. For many such locations, DBS is all that's allowed. But, if you have the space, you have the choice between C-band and DBS. And if you're keen to enjoy the very latest in digital technology, C-band still has the edge. General Instrument's 4DTV receiver doubles the entertainment value of your C-band installation by bringing you dozens of digital video channels and CD quality music channels as well as analog and VCII encrypted programming.

Hedging On The Future Last year a great deal of commotion was created by the television industry with a lot of loose talk about the pending arrival of High Definition Television. It turns out that the case was grossly overstated. The FCC has still not hammered out the details of such requirements for broadcasters or manufacturers. Such equipment at the station end is outrageously expensive and networks do not appear to be pushing their stations in that direction. Indeed, such sets are years away from your local showrooms, and even then, the cost will likely be prohibitive to most customers. Consumers who're just getting used to 25" color sets under $300 aren't going to lining up for the same sets with a $3,000 price tag.

The other tantalizing daydream for the future is faster Internet service through cable or satellite service providers. This too is often more hype than reality. Cable modem services are available in some locations, but a wide rollout is likely to be slow, and some markets may never even get the service. [Check with your cable company to see what sort of timetable they're looking at for cable modems.] The only high-speed Internet service available to date via satellite is DirecPC, a small dish digital Internet satellite service from Hughes Network Systems. But, if you were disappointed by your mounting cable and on-line charges, you'll be shocked at the high cost of such a system. Among the payment schemes available is one dubbed "Sun Surfer" which costs $129.95 per month with unlimited access from 6:00 am to 6:00 pm Monday through Friday and .60 per megabyte all other times.

And finally, the next big fizzle may come with DISH Network's attempt to make local TV stations available to their small dish subscribers. This plan is an attempt to answer a complaint many cable subscribers have about satellite TV: you can't get your local stations via the sat! Currently, very few local terrestrial TV stations are available via any other system than cable and this has always been its trump card. In announcing plans last year, amid much fanfare, DISH said it would be able to provide local stations to DISH subscribers by uplinking those stations in top U.S. markets and "spot beaming" the signals to only those cities. The claim was that better than 70% of the country's population would be covered by such a scheme. However, DISH has more than a few hurdles to clear before this dream becomes a reality. It's not clear exactly which stations in any given market would actually make it skyward. Would stations carried on cable systems owned by the owners of Primestar (a competing satellite service provider) be available? How much would subscribers be asked to pay for otherwise "free" TV signals? What existing programming might be bumped on DISH to make way for local stations, and, conversely, which local stations might eventually be bumped to make way for new satellite services such as bandwidth-eating HDTV?

One way to avoid the no local TV quandary with a satellite system is to install one of several "off-air" solutions yourself. Small VHF/UHF TV antennas are available which may provide acceptable signals for all of your local stations. Inexpensive indoor antennas (a.k.a. "rabbit ears") can be used, but you'll likely lose reception quality. Several outdoor VHF/UHF antennas have been designed to "piggy-back" on DBS mounting poles and are as unobtrusive as the little dishes themselves. For more distant reception requirements, an attic-mounted multi-element TV antenna with a mast-mounted pre-amp will do an excellent job bringing in local stations. Most satellite receivers have cable connections on the back to which you attach your outside antenna. Usually, a button on the remote control will toggle between the satellite and terrestrial signals. Expect to pay $50 and up for such "off-air" solutions.

- Ken Reitz [3/4/98]