More news on the Copyright ruling:
Lawmakers Mull Legislation In Wake Of
Satellite Fee Hike
By Scott Ritter
WASHINGTON (Dow Jones)--Capitol Hill may come to the aid of the fledgling satellite
broadcast industry after U.S. copyright officials agreed to boost fees the companies must pay
to carry television programming.
Lawmakers like Senate Commerce Committee Chairman John McCain, R-Ariz., criticized the
move, saying higher royalty fees threaten the industry's push to compete for cable-television
viewers. Congress has been keeping a close eye on rising cable rates, and sees direct
broadcast satellite services as a promising new rival to monopoly cable systems.
'This is a very troubling decision,' said Lousiana GOP Rep. Billy Tauzin, who chairs a House
subcommittee on telecommunications. 'Clearly, Congress is trying to open the door to
competition, only to have that door slammed in our faces.'
The higher rates are good news for television networks, Hollywood movie studios, sports
leagues and other owners of televison programming. But the rates will hurt DBS providers like
EchoStar Communications Corp. (DISH) and Hughes Electronics Corp.'s (GMH) DirecTV,
which must pay for rights to broadcast the fare.
The DBS companies said they'll challenge the fee hike, while lawmakers vowed to explore
legislative remedies. 'Simply put, we should not have unelected bureaucrats dictating the
terms for an entire marketplace,' Tauzin said.
The increase was recommended by an arbitration panel convened by the U.S. Copyright Office
last year after negotiations between copyright owners and satellite carriers failed. Librarian of
Congress James Billington approved the new royalty rates Monday, which will rise to 27 cents
a month per subscriber for network and superstation signals.
Currently, DBS operators pay a per-signal charge ranging from 6 cents a subscriber for
distant network signals to 17.5 cents for satellite superstations like Tribune Co.'s (TRB)
Chicago-based WGN.
Cable companies, by comparison, pay about 9.7 cents per subscriber for superstations and 2.7
cents for network signals, according to the Satellite Broadcasting & Communications
Association, an industry group.
'Raising satellite rates will not only affect millions of home dish owners, but it is grossly unfair
to multichannel providers competing against cable,' said SBCA President Chuck Hewitt.
The arbitration panel recommended that the rate increase be made retroactive to July 1, 1997.
The Library of Congress rejected the decision, instead ruling that the new rates will go into
effect Jan. 1, 1998.
The initial rates were set by Congress in the 1988 Satellite Home Viewer Act, and raised in
1992 through a similar arbitration process. The law was revised in 1994, with Congress calling
for fees to be set at fair market value.
Sen. McCain said he would offer legislation next year prohibiting the Library of Congress from
raising rates unless first consulting with the Federal Communications Commission and
weighing the impact a fee hike would have on consumers and competition.
-By Scott Ritter 202-862-6687 |
