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Role Reversal: Cable Complains About DBS Fees

9/13/2004 10:30 AM Eastern

In an unusual role reversal, the cable industry is complaining that the direct-broadcast satellite industry is charging too much.

Usually, it’s slick DBS ads that bemoan high cable rates. But this time, it’s cable that is dropping hints about gouging.

The dispute, however, is not about retail rates, but about the fees the Satellite Broadcasting & Communications Association charges cable operators to obtain DBS-subscriber totals within their franchise areas.

Cable operators need the data to document for the Federal Communications Commission that their cable systems meet the legal definition of effective competition. Generally, the FCC requires a showing that DBS penetration is greater than 15% of households in a franchise area.

In a Sept. 10 FCC filing, the NCTA said the SBCA’s fees were too high. Extracting DBS-subscriber totals for a Texas community with 20,000 households would cost about $1,600, the NCTA added.

The SBCA -- the trade association of DirecTV Inc. and EchoStar Communications Corp. -- has exclusive control over the data. It charges $15 for data within each five-digit ZIP code, plus 25 cents for each ZIP + 4 unit.

“The cost of obtaining this information is excessive, particularly when the request to the SBCA concerns ZIP + 4 data,” NCTA lawyer Diane Burstein said. She added that when asked for DBS-subscriber data, SBCA replies promptly and reliably.

The NCTA said the Texas example it cited would cost about $1,600 because the community had four ZIP codes and 6,200 ZIP + 4 units. The NCTA’s filing did not mention as a problem the roughly $1,000 fee that the FCC charges to process each petition for effective competition.

“The SBCA is pleased that the NCTA and its members ‘have found that SBCA has provided the requested data in an expeditious and reliable manner.’ We at the SBCA have worked hard to ensure that our … program complies with the guidelines and regulations established by the FCC,” SBCA spokeswoman Camille Osborne said.

The NCTA did not call for regulation of the SBCA data monopoly. Instead, it urged the FCC to adopt a rule that cable systems should be presumed as subject to competition in any state with more than 15% DBS penetration. That would make reliance on the SBCA’s data irrelevant in 41 states.

“On the broader issue of overall effective competition, that is a matter for the FCC to decide,” Osborne said.

 

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