Satellite TV Gets Boost, but Cable Still Has an Edge.

Now that satellite companies must carry local broadcast channels for the first time, will the dishes be flying off retail shelves this holiday season?

Will El Segundo-based DirecTV, the Goliath of the satellite TV industry, see its subscriber base skyrocket? Will the forever-lagging satellite industry finally gain ground on cable?

Don't bet on it.

Satellite TV does offer digital images that are sharper than cable, and it provides hundreds of channels while cable carries only a. few dozen. But it still has multiple drawbacks that might keep many couch potatoes attached to their cable boxes.

Among them are higher equipment costs, lack of ancillary services (like phone and Internet access), occasional signal interference from weather and physical objects, and a not-so-hot track record on customer service. Satellite TV even comes up short on the number of local broadcast channels it will be capable of delivering.

Neverthless, local retailers report brisk sales of satellite systems. Robert MacLean, manager of the Good Guys store at the Beverly Connection, said it's been hard keeping dishes in stock. And a manager at the Radio Shack on La Brea Avenue in Hollywood reported that sales are much higher than last year.

Industry officials are jubilant over such early-season reports, and they insist that sales will keep improving now that the ban on local channels has been removed.

"Being able to offer the local channels was really the last obstacle," said Jennifer Buckley, a spokeswoman for the Satellite Broadcasting & Communications Association in Alexandria, Va. "This was a big day for us. Now our customers can compare apples to apples."

Matthew Spitzer, director of the Center of Communications Law and Policy at USC, agreed that the new law would give a boost to the industry.

"The main disability that the satellite systems have faced has been that they've been unable to offer local broadcast signals," he said. "The new legislation... will undoubtedly increase customer demand for satellite service."

The recent sales uptick could merely be seasonal, however, since fall and early winter are traditionally strong. And DirecTV, which is owned by Hughes Electronics Corp., has been heavily promoting its new ability to carry local broadcast channels.

But there's another complication: Satellite TV service providers still are not be able to carry nearly as many local broadcast channels as cable companies carry.

DirecTV subscribers will get only three local broadcast channels (KABC, KCBS and KNBC), and a national PBS feed - even though there are over 20 local channels in Los Angeles. Local PBS stations won't be included on the satellite dial - nor will other local programming, including KDOC-TV Channel 56, which shows reruns of "The Rockford Files" and "Perry Mason." Not to mention the cable access stations showing city council meetings and public affairs shows.

"We do have a limited amount of capacity," conceded Robert Mercer, DirecTV's senior manager of communications. "With digital compression, you can only squeeze so many channels out of each transponder and you only have so many transponder devices that beam the signals back to earth."

He said DirecTV's system is stretched to the limit with the new requirements and that the company will have to upgrade its equipment over the next two years to handle the extra stations that will be required on Jan. 1, 2002, when all satellite operators must carry all local channels.

Indeed, if federal officials ultimately enforce "must-carry" rules obligating satellite providers to carry all local broadcast signals, or none at all, it could require huge capital expenditures.

"Imposing full must-carry obligations will exceed (satellite companies') capacity," said USC's Spitzer. "If you try to impose that, (the satellite companies) will just shut off local signals."

Many suspect that for now, cable will remain on top, especially since it can offer Internet and phone service. "What you're seeing here is a marketplace that's becoming increasingly competitive. This is very good for consumers," said Steve Lang, a spokesman for Media One Group. "It forces all of the providers to innovate and expand offerings."