When satellite can ruin an industry; prematurely introduced DBS could hinder local production.

Well, satellite could ruin the audiovisual industry in Italy if such an industry did indeed exist. But let's take it step-by-step. You may know this sad state of affairs. Italy has 697 local TV stations, three public television systems (RAI), three major privately-owned networks (Fininvest), three pay-TV services and some six minor ad supported TV networks.

Imagine, Italy being among the world's few countries to have TV localism. Italy's TV advertising sector generates net to the stations some $4 billion annually. In addition, $1.5 billion per year goes to RAI as TV set license fees. Plus, Italy has a fairly large number of production and distribution companies and a well-developed post-production industry, including sophisticated dubbing facilities. Also, the country has good up-link satellite services and a fully digitalized telephone system with an elaborate network of fiber optics. So what's wrong?

First of all, the aforementioned large financial resources are not properly allocated therefore they do not benefit anyone concerned. Second, local drama production is virtually non-existent because the mechanism in place does not facilitate such activity. Third, the political tug-of-war between the left, which wants control of RAI, and the right, which seeks a totally deregulated private TV sector, is so hostile that everyone, viewers included, is disserved. Now, why would satellite television aggravate this situation instead of, as some argue, offering a possible solution?

Let's begin by saying that satellite technology is more than desirable in regions with cable in homesteads and areas with a well-developed production industry, and that, ultimately, DBS and DTH will offer viable services throughout the world. But it is also possible that satellite technology could hinder the development of an audiovisual television industry if introduced prematurely. Italy could offer an example.

The political left, frustrated by its inability to have Parliamentary approval of a television law that would sanction its control, is pushing for the introduction of satellite by RAI. Fininvest, naturally, is ready and willing to have its three free-TV signals and its (co-owned) three pay-TV programs on satellite. On the side-steps are also multinationals which are planning to cover Italy with multilingual satellite transmissions. Currently, the country has some 400,000 satellite dish antennas all aimed at receiving foreign signals, but there's a catch.

Because of the precarious financial status of most local TV stations in Italy, satellite programmers could easily rent them to re-broadcast satellite signals. In effect, a satellite programmer would need 80 local TV stations to cover the whole country without engaging in expensive dish marketing campaigns. MTV Europe already covers a good portion of Northern Italy with a network of local TV stations acting as repeaters.

Current law on the books and future legislation cannot prevent local TV stations from picking up satellite signals if they respect the local mores and advertising content limits. The law will, however, be able to impose stricter rules to those who want to operate a series of terrestrial repeaters to cover the whole country.

By pushing for the early introduction of TV satellite, the political left is, in effect, playing into the hands of the right. Indeed, if RAI's signals were on satellite, more viewers would be encouraged to get receiving dishes, thus facilitating the marketing efforts of Fininvest. Under this scenario, Fininvest would be in a win-win situation. Fininvest will win if the left does not succeed in closing down two of its three TV networks. It will also win if the left will force Fininvest to divest two of its networks (Rete 4 and Italia 1) which (since they're considered unsellable) will, most likely, move from terrestrial distribution via Fininvest-owned repeaters to satellite.

At this point, Fininvest will be taking advantage of local TV stations which will individually operate as terrestrial repeaters at least until the public-at-large, also encouraged by RAI, will install sufficient antenna dishes.

Limiting advertising income by law will not be an effective deterrent against Fininvest TV supremacy, since there are several ways to collect ad revenues legally, including assigning non-Italian companies to serve as sales reps. In Europe, the Canadian example of not allowing as business expenses advertising expenditures invested in the bordering American TV market, would not be possible due to EC regulations. So, ultimately, satellite will be taking advantage of local TV stations until it makes financial sense, subsequently leaving them to die without an identity and a public.

One can easily see how the great potential of local TV stations can thus turn into a liability for the stations themselves and the whole TV industry. Indeed, local TV stations can offer a unique service and can offer the base for the development of a nation-wide audiovisual industry that, in the long run, will benefit all concerned, including the satellite sector. Let's be more specific.

The satellite services that the Italian political left is advocating will, in the beginning, be offering inexpensive library material. On top of this, one has to factor in that current Italian TV production is mostly made up of talk shows, games shows and variety shows. The introduction of satellite will also siphon off resources from an already weak TV industry, therefore further reducing local production. Imposing minimum local production quotas will not resolve anything since it can be filled with inexpensive shows independently produced.

The consequence of all this is that the Italian production industry will become another casualty to be added to that of local TV stations. Now, depriving a country of two vital functions - TV localism and indigenous production - could have political, social and economic repercussions. TV localism is recognized by sociologists, futurists and corporate America as a vital function epitomized by the business credo: "think globally, act locally." In addition, futurists such as Alvin and Heidi Toffler are betting their reputation on the future of localism. This, in America, is a politically leftist concept which is also being embraced by the right.

Another potentially dangerous outcome that could be derived from an ill-conceived Italian TV policy is that it could deprive the Italian intellectual community of a platform to get to the masses, which nowadays can be reached only through movies and television. Newspapers are increasingly being limited to a restricted number of "entre-nous" readers. Let's not forget that, in the past, intellectual impediments resulted in revolutions.

In conclusion, satellite TV technology will ultimately contribute to the growth of Italy's TV industry, but only if and when the country has implemented a strong base with which to grow.