COMPETITION REPORT: SATELLITE INDUSTRY MAKING ADVANCES, REMAINS HINDERED BY OUTMODED REGULATIONS

- Cable Industry Retains Monopolistic Hold on 82% of TV Households -

 ALEXANDRIA, VA, AUGUST 11, 1999 – The Satellite Broadcasting and Communications Association this week filed comments with the Federal Communications Commission as part of the FCC’s Annual Assessment of the Status of Competition in Markets for the Delivery of Video Programming. The Association presented subscriber data and market research which shows overall Direct-to-Home (DTH) subscriber growth progressing rapidly with net acquisition figures outstripping those of previous years. The home satellite industry now serves 11.86 million homes.

The satellite industry’s findings also champion high levels of consumer satisfaction with satellite products and commend FCC consumer-friendly and pro-competition leadership on issues of satellite-restrictive ordinances and home owners’ covenants.

The cable industry bemoaned the gains satellite TV has made into the multichannel video delivery market. In its comments to the FCC, the National Cable Television Association (NCTA) said its market share has depleted from 85 percent to 82 percent. A distraught and grief-stricken NCTA self-eulogy stated that, "cable’s market power in video is a thing of the past." SBCA President Chuck Hewitt sharply rejected NCTA’s characterization of the marketplace, stating that, "Cable’s 82 percent market share is still the definition of a monopoly. Direct-To-Home satellite is becoming a more viable competitor to cable, and the NCTA is correct to not underestimate the future of satellite delivered television. In its attempt further control the video provider market and garner sympathy from the FCC, however, the cable industry has grossly and purposefully misinterpreted what 82 percent market share really means."

The SBCA points to several arcane and outmoded rules and regulations which continue to hamper the satellite industry’s ability to fully compete with the cable industry. SBCA cites disparities in the copyright law which, for example, lay the DTH industry open to unreasonable demands in return for having its temporary copyright license renewed. The industry also remains hobbled by a "white area" system for network signal service that has been unworkable from the start, to the detriment of DTH providers, broadcasters and consumers alike. In addition, threats of interference in the DBS spectrum and concerns about the Commission’s commitment to program access are very real concerns. Sharing the Ku-Band spectrum with companies with terrestrial broadcasting plans such as Northpoint would seriously undermine the ability of DBS to deliver interference-free broadcasts. Such threats must be resolved quickly and efficiently if DTH is to succeed as a competitor to the cable monopoly on the scale that the Commission and Congress have envisioned.

For a copy of SBCA’s complete comments on competition in the video marketplace, please contact Jennifer Buckley or Alex Breckon, SBCA, 703-549-6990.

The Satellite Broadcasting and Communications Association of America (SBCA) is the national trade organization representing all segments of the home satellite industry. It is committed to expanding the utilization of satellite technology for the broadcast delivery of entertainment, news, information and educational programming.