SATELLITE INDUSTRY RESPONSE TO SENATE REFORM OF SATELLITE HOME VIEWER ACT

-- Industry Supports Reform and Extension of License; Urges Resolution of White Area Network Signal Crisis --

ALEXANDRIA, VA, JANUARY 20, 1999 – The Satellite Broadcasting and Communications Association (SBCA) is pleased at the introduction of legislation by Senator Orrin Hatch, chairman of the Senate Judiciary Committee, which reforms the Satellite Home Viewer Act and extends the Direct-To-Home (DTH) satellite copyright license for another five years. The bill, similar to legislation which SBCA supported last year, is the first step in a two-part process that is necessary to improve the ability of the DTH industry to compete in the video marketplace and give consumers more choices and better service.

Yet to be resolved, however, is the critical matter of distant network signal delivery to hundreds of thousands of consumers who will soon lose these signals as a result of federal court orders, even though they cannot receive local network television broadcasts with an outdoor antenna. Senator Hatch’s bill must be paired with legislation from the Senate Commerce Committee, chaired by Senator John McCain, that deals with this "white area" problem before satellite consumers unfairly lose their network service.

While Senator Hatch’s bill takes effect on the date of enactment, the DTH industry, in the meantime, will have paid, since January 1, 1998, the egregious copyright royalty fees set by the Copyright Arbitration Royalty Panel. The fees - 27 cents per subscriber, per month for both superstation and distant network signals - are vastly more than what cable operators pay for similar

signals. While those fees are reduced for satellite providers when the legislation takes effect, there is no relief from the new fees that have already been paid, nor will the rates be reduced to levels comparable to those paid by cable operators.

SBCA urges Senator McCain to act quickly on the Commerce Committee legislation that is designed to be the companion to the bill introduced by Senator Hatch. It is important that the "white area" issue be settled once and for all so that there is minimum disruption of network service to the many consumers affected by the court orders which are about to go into effect.

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. The SBCA is composed of DBS service providers, programmers, equipment manufacturers, distributors, retailers, encryption vendors, and national and regional distribution companies.