ABC, CBS, NBC and Turner Bcstg. said allowing users direct access to Intelsat capacity, instead of going through Comsat

Television Digest with Consumer Electronics, Dec 28, 1998

ABC, CBS, NBC and Turner Bcstg. said allowing users direct access to Intelsat capacity, instead of going through Comsat, would "create an incentive" for Comsat to reduce its current markup and improve its service quality. Networks told FCC that U.S. should join other nations that allow direct access "in order to introduce further competition in one of the few remaining market segments in which a service provider retains by regulatory policy an exclusive right to provide a telecom service." Although Comsat's markup for video is "quite high," networks said, "there is no need to turn this proceedings into a rate case to determine the reasonableness of Comsat's claimed costs." Instead, they said, direct access should be allowed and cost will be driven by market.

"Comsat's markups for Intelsat services average 68% and are as high as 270%," MCI WorldCom told Commission. "These markups, which Comsat charges even when it provides no facilities other than an Intelsat space segment, are not cost justified," it said, "particularly because Comsat [already] earns a significant return on its investment in Intelsat." Three Angels Bcstg. Network (3ABN), nonprofit producer and distributor of educational TV programming, told FCC that amount it spends to lease transponder capacity would be halved if direct access were permitted. 3ABN said it pays Comsat $78,000 per month to lease 9 MHz of K-band transponder capacity on "full-time basis." Under direct access, it would pay $39,000 per month, saving $468,000 a year, it said. ABN said such savings could be diverted to improving quality and quantity of its programming.