WASHINGTON — Satcasters told Congress Thursday that their efforts to offer viable competition in the video marketplace are being stymied by cablers who are trying to corner the market on valuable sports programming .
When they are not fighting cablers over access to programming, satcasters say they are beset by federal bureaucrats who recently decided to push through a dramatic increase in the copyright fees they pay for broadcast programming. “This action will result in a rate increase for 7.5 million U.S. households who subscribe to satellite television and will have a detrimental effect on the ability of DBS operators to compete with cable,” testified Steve Cox, DirecTV’s exec VP.
It appears that satcasters have some support in Congress. House Telecommunications Subcommittee chairman Billy Tauzin (R-La.) said the Copyright Office’s decision to triple the fees satcasters pay to retransmit superstation and network signals “will throw the market into wild imbalance.” He added that the decision “should not stand.” Satcasters complained that the rates they are paying are approximately five times the amount paid by cable.
Market reality question
The U.S. Copyright Office says it raised the rates so they more accurately reflected the copyright’s market value. Rather than lowering the rate for satcasters, a Copyright Office official urged Congress to raise the rates for cable so that they, too, reflect market realities. Unlike the satellite rates, cable copyright fees are set by Congress.
Satcasters also asked Congress Thursday to revise the so-called program access rules which guarantee them access to cable programming. From the satcasters’ point of view, the rules have a couple of loopholes that allow cablers to keep some valuable programming to themselves. For instance, the program access rules only apply to companies that own both cable systems and cable programming — which allows giants such as Viacom and the major broadcast networks to strike exclusive deals.
Cablers can also keep any program for themselves which is not broadcast via satellite. DirecTV has filed a complaint against Comcast SportsNet at the Federal Communications Commission, claiming the company is unfairly blocking access to the network, which owns the rights to Philadelphia’s basketball, hockey and baseball teams. Because Comcast distributes the sports programming via fiber optic and cable lines, it says it does not have to make it available to DirecTV.
In his own testimony before the committee, Comcast president Brian Roberts pointed out that DirecTV has its own exclusive deal with the National Football League that allows the satcaster to air 200 games a year. In addition, Roberts claimed, DirecTV customers will have access to nine out of 13 Philadelphia Flyers games and the entire November schedule of the 76ers’ games without even subscribing to Comcast SportsNet.
In addition, the satellite industry asked Congress to revise current law to make it easier to provide a package of programming that includes local TV stations.