Satellite owners in Bermuda and the Caribbean say they have a better service offering more programming than traditional cable television. In the final story in a four-part series, Adam Cooper looks at the "grey market" alternative to cable television.

As Cablevision faces charges of copyright infringement and subscribers get used to viewing programming intended for Latin America, Derek (not his real name) has watched with some bemusement.

Derek is a satellite subscriber. In 1981, he bought a kit and put together his first dish, a mesh wire affair measuring ten feet across. In 1994, he bought a smaller DirecTV dish, but he still uses the bigger cousin because it has some channels that DirecTV lost when it adjusted its space satellites two years ago.

Derek's set-up allows him to watch The Discovery Channel as it is seen in the United States, while cable subscribers can only access Discovery programming designed for Latin America. Cable subscribers only have five movie channels, including one version of Home Box Office (HBO), and a package with all five can cost up to $1,100 a year, plus equipment rental. For $800 a year, Derek has more than 20 movie stations, and at least half a dozen offerings from HBO (although satellite systems require an initial investment of at least $600 for the equipment).

The limited programming line-up on cable is partly due to the capacity of the system, which until recently was only able to carry sixty channels. But the real problem for Cablevision, and cable providers in the Caribbean, is copyright licensing: Cablevision cannot get permission from several US programmers, HBO included, to air their US programming in Bermuda. The channels, which do not just include movie stations, say that their distribution agreements with Hollywood studios limit their customer base to the United States and its territories. For the Latin American region, which includes Bermuda, some cable channels have developed specialised programming, often in Spanish or with Spanish subtitles.

Cablevision distributes some of the channels without a licence from US providers anyway (and explained why), but the company has been slow (or cautiously reluctant) to show more movie channels the same way.

But satellite subscribers in Bermuda are not exempt from the copyright problem Cablevision faces (although unlike Cablevision, they have avoided the scrutiny of American copyright holders).

Just as programmers claim they are not allowed to service non-US cable companies, they say they cannot service individual subscribers outside the region via satellite either. And when DirecTV's signal was slashed two years ago, a spokesman for the company said its licence from the Federal Communications Commission prohibits it from servicing customers outside of the US. He added that the company was unaware that it had customers in Bermuda.

But the satellite subscribers (there are 600 big dishes still in operation on the Island and at least twice as many little ones) manage to get programming anyway. In most cases, they use Island Satellite, Satronics or another local company as an agent, who in turn use United States addresses to set up subscriptions with authorised US satellite dealers. Or, with a US address of their own, they set up a subscription directly.

Once their account is created, a satellite signal is broadcast to activate their equipment, and as long as the dish is covered by the footprint of the satellites in space, it receives programming.

Island Satellite admits (although grudgingly) that it sells "grey market" television, which is why Derek, the subscriber, refused to give his name for this story. He feared his subscription might be disconnected.

But according to one lawyer, who has had a big dish since the late 1980s, Island Satellite is not technically doing anything illegal, at least not in Bermuda; it is the US dealers who deal with Bermuda agents that are breaking the terms of their contracts and federal law, although perhaps unwittingly.

The lawyer pays $1,100 a year for his television service, the same as US rates or even higher. But others have managed to avoid subscription fees altogether with illegal descrambling cards.

One such person said he receives all of the channels on DirecTV without paying a subscription fee to the satellite operator. The card in his receiver, which enables users to receive subscription-only programming and pay-per-view movies, is a clone of one for which the company receives subscription fees.

The set-up is even more common in the Bahamas and other Caribbean countries. In Jamaica, illegal DirecTV subscribers redistributed their programming to subscribers on the cheap through home-made cable systems.

Programmers and the Motion Picture Association, the organisation that represents the studios which own copyrights to most of the movies shown on American television, are aware of the problem, both with paying and non-paying satellite users.

Aside from a few anti-piracy initiatives which have blocked some cloned cards, there is little copyright holders can do about the situation because it is difficult to detect which subscriptions have legitimate billing addresses and which ones have belong to overseas subscribers.

The cable providers, as they lobby for contracts with US programmers, cite the grey market and illegal satellite services which have gained popularity in their markets.

In Bermuda, TV enthusiasts who can afford to pay subscription fees, and those cunning enough to avoid them, agree that satellite is a better option than cable.

"All we are asking for is the same programming that is already available," says Bill Ewing, president of The Cable in St. Kitts. "Otherwise, how can we be expected to compete?"