Shares of Hughes Electronics Corp. and other satellite-TV providers rose Wednesday after the House approved a bill that would allow the companies to offer local TV programming to customers.
Shares in El Segundo-based Hughes jumped $6.81 to close at $84.94 on the New York Stock Exchange; EchoStar Communications Corp. rose $3.88 to $77.38 on Nasdaq; and Pegasus Communications Corp. soared $11.50 to $64, also on Nasdaq.
Hughes and Pegasus reached 52-week highs, and EchoStar closed near its peak of $78, reached Monday. Hughes, a unit of General Motors Corp., trades as a tracking stock under the symbol GMH.
Bala Cynwyd, Pa.-based Pegasus on Wednesday reported a net loss of $2.86 per share for its latest quarter, compared with a loss of 86 cents in the year-earlier period--but also a 63% increase in subscribers.
Satellite-TV companies have lobbied for almost three years for permission to air local programming. Without it, they say, they have a tough time luring customers from cable competitors that can carry those stations.
"It's a watershed event for the whole industry," CIBC analyst Jeffrey Wlodarczak said.
The legislation would enable millions of satellite-TV viewers to watch local TV news, weather and sports broadcasts, just as cable subscribers now do.
"This bill makes it for the first time possible for consumers in urban areas to really think seriously about getting a satellite dish," said Rep. Edward Markey (D-Mass.).
The threat that Sen. Phil Gramm (R-Texas) might block the bill in the Senate receded late Wednesday after lawmakers stripped the bill of a plan to offer loans to satellite-TV companies in rural areas--a measure Gramm vehemently opposed.
Under Wednesday's agreement, the Senate will vote on the bill, most likely next week. The House will have to revote on the bill without the rural loan program.