Originally created 02/13/98

Senators probe satelitte TV fees



WASHINGTON -- Some satellite TV customers are getting hit with higher bills, and key lawmakers today began taking a closer look at a major culprit: increased copyright fees.

The Senate Commerce Committee is holding a hearing on the issue. Chairman John McCain, R-Ariz., along with Sens. Conrad Burns, R-Mont., and Byron Dorgan, D-N.D., wants the copyright fees lowered.

The dispute arises over a U.S. Copyright Office decision last year ordering satellite carriers to pay 27 cents per subscriber per month for the rights to carry nonlocal broadcast TV programming on their systems. The new fee went into effect Jan. 1.

Before that, carriers paid 6 cents per subscriber per month for the rights to carry programs broadcast by ABC, CBS, NBC, Fox and other networks. And they paid from 14 cents to 17.5 cents a subscriber a month for rights to air programs on nonlocal independent TV stations.

Roughly 8 million U.S. households currently subscribe to satellite TV.

McCain said the copyright fees need to be lowered to help satellite companies be stronger competitors to cable TV, whose rates are rising sharply.

"One of the most urgent communications policy issues we face today is how to constrain the cable television industry's seemingly relentless monthly price increases," he said.

His comments come one day after the nation's top cable company, Tele-Communications Inc., announced that in June it would raise rates as much as 5.5 percent -- three times the rate of consumer inflation.

DirecTV, the biggest provider of satellite TV service via small, pizza-sized dishes, recently increased rates for customers who buy various packages of broadcast signals. The increases vary according to what customers buy, but one package featuring eight nonlocal TV stations, went up nearly 34 percent to $6.67 a month from $4.99, a company official said.

EchoStar, another provider of satellite TV via small dishes, is undecided about raising customers' rates because of the copyright fees, said David Moskowitz, senior vice president. For now, the company is absorbing the higher charges. That's costing the company "several hundred thousand dollars a month," he said.

Companies and consumer groups want the fees lowered, but the Motion Picture Association of America, whose members receive the fees, wants them to stay as they are.

Copyright owners, largely movie studios and sports leagues, take in roughly $30 million a year in satellite royalties. The new, higher fees would give them an additional $60 million.

Gene Kimmelman, co-director of the Consumer Union's Washington office, also said the fees should be lowered is to help make satellite TV companies stronger competitors to cable.

Kimmelman rapped the Federal Communications Commission for not cracking down on rising cable rates and renewed calls for Congress to force the FCC to write stronger rates rules.

"When do we get the FCC to stop wasting taxpayers' resources and do something meaningful to put a lid on cable TV rates?" he asked.

The higher fees also cover satellite companies such as PrimeTime 24 that provide TV programming to big satellite dishes often installed in people's yards.