Satellite customers have always paid much more for programming
than cable viewers.  However, since we own our own equipment
and do not have to pay for the cable company to downlink and
deliver it to us, our total bill has been a bit less than
cable customers' total.  It looks like that may change --
we may have a higher total bill than cable customers.
Here is an article that explains why.  This is from OnSat's
web page at www.tripled.com
Reprinted here by permission:
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BILLINGTON LOWERS BOOM ON SATELLITE - Librarian of Congress James
Billington has dealt satellite operators a tough blow by approving
the Copyright Arbitration Rate Panel (CARP) recommendation to raise
satellite fees for superstations and networks to 27 cents. While
Billington claims his hands were tied regarding the rates, he did
reject the retroactive clause of the recommendations which would
have backcharged satellite operators from July 1997. Instead the
fees go into effect as of January 1, 1998. The Satellite
Broadcasting & Communications Association has said that it will ask
the D.C. Court of Appeals to stay Billington's decision until the
effects on video competition can be evaluated.
By contrast, cable operators pay an average of 9.7 cents for
superstations and 2.7 cents for networks. An SBCA spokesperson
commented that fees derived from satellite could amount to $80
million per year while fees collected from cable could only $170
million. That figure seems disparate considering that the cable
universe is over eight times larger than the entire satellite
universe.
PARKER; SBCA COMMENT ON CARP HEARINGS Superstar Netlink Group LLC VP
of Programming & Government Affairs Jerry Parker recently talked to
Times about the CARP hearing, a process for which Parker gave 13
hours of testimony as the only satellite industry representative.
Director of Government Affairs for the Satellite Broadcasting and
Communications Association Cheryl Crate also spoke with Times on the
subject.
Parker says that impacted services include PrimeTime 24 and
Netlink's Denver 5 including PBS and Fox. All of the independents
including WGN, TBS, WSBK, KTLA, KWGN among others will be affected
as superstations.
Parker also felt sorry for the CARP committee for their lack of
experience with satellite, a sentiment echoed by Crate, who said
none of the judges had telecom backgrounds.
"This has the effect of law until it is changed," says Crate.
"Obviously, the consumer is going to be the one that absorbs these
increases. We're in a very competitive environment, so that means
companies don't always have great big margins to work with. With an
increase like that, I feel confident that it'll get passed along to
the consumer," says Parker.
"From a packager standpoint, obviously they don't like to raise
prices like that and this increase is just so horrific compared to
what anybody expected. It's so disparate compared to what cable pays
that it shocked everybody," says Parker. "We sell a lot of annual
subscriptions. Any subscription we've sold this year has already
been paid for. We can't go back and ask them for more money. In that
case, the packager ends up getting stuck with any increase."
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