House panel backs satellite fee hike

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bman549

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Apr 20, 2004
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Here's the full story:

WASHINGTON, May 6 (Reuters) - A U.S. House of Representatives panel on Thursday backed a measure that would raise the fees satellite television services like EchoStar Communications Corp. (NasdaqNM:DISH - News) and DirecTV pay to carry some broadcast channels.

In some markets where satellite providers do not offer a national television network affiliate or a local channel is not available, they import the signal from a big market like New York or Los Angeles but have to pay a royalty.

The satellite providers also have to pay the royalty for carrying so-called superstations like Chicago's WGN, a popular independent broadcast network that pay television services often offer subscribers.

The House Judiciary subcommittee on intellectual property approved raising the rates at least 11 percent from the 14.85 cents per subscriber monthly royalty for a network station and 18.9 cents per subscriber for a superstation starting in 2005.

The increase is based on inflation from 2000 to 2004, so far 11 percent according to government statistics. The royalties will go into a fund that compensates the copyright holders of the programs.

A Library of Congress panel would then review and set the new the royalty rate, evaluating all programming prices including such popular channels as cable's ESPN, some of which can garner as much as $2 a subscriber.

The last time that happened the royalty rate went to 27 cents, up 350 percent. That dramatic jump led Congress to order discounts for the satellite providers in 1999, which the new legislation would extend.

"The companies are enjoying fresh growth and success that I don't foresee any need to pass on the royalty rate adjustments to consumers," Rep. Lamar Smith, a Texas Republican and chairman of the subcommittee, told reporters. "I think there will be very little impact if any on consumers."

The Satellite Broadcasting and Communications Association complained that the legislation unfairly targeted satellite providers and did not address the rates for cable operators.

"If Congress's goal is to ensure that consumers have an affordable alternative for multi-channel video then they need to, at the very least, come up with a uniform system of evaluating increases for both the cable and satellite industries," said SBCA President Richard DalBello.

DirecTV is controlled by Rupert Murdoch's (News) News Corp. Ltd. (Australia:NCP.AX - News; NYSE:NWS - News) through its Fox Entertainment Group Inc. (NYSE:FOX - News) unit.

The legislation approved by the subcommittee will be married with companion language moving through the House Energy and Commerce Committee that reauthorizes the satellite services to carry local broadcast stations. The current authority expires at yearend.

It was unclear whether the measure would pass this year.

The Senate has not yet begun working on a similar bill to reauthorize satellite providers to offer broadcast channels and there are only about 60 days left before lawmakers leave for the year.

"I don't know what's probable," said Sen. John McCain, chairman of the Senate Commerce Committee which would have to review such legislation. "I know we have to get it (the bill) marked up, we've got to get it on the calendar."
 
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Sean Mota

SatelliteGuys Master
Supporting Founder
Sep 8, 2003
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Of course, the fee will be pass to consumers one way or another in a different form. B*****...
 

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