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February 19, 1998


Re: Policies and Rules for the Direct Broadcast Satellite Service, IB Docket No. 98-21

I fully support the decision to streamline and simplify the Commission's rules governing the direct broadcast satellite (DBS) service. I believe it should be the constant task of this agency to examine our rules so that we can eliminate those that are not necessary. Because I believe such consolidation will improve our regulation, I am voting to approve that portion of the Notice.

Having said this, there is one disturbing island in this sea of words about deregulation and efficiency. The item invites us to consider imposing more regulation in the form of a DBS/cable cross-ownership rule. On what basis? The answer we are given is a hypothetical string of assumptions that suggest the need for further regulatory action: cable rates are high, DBS is the best potential competitor to cable, cable ownership of DBS systems might substantially reduce competition, so maybe we need a blanket rule banning such combinations. Why so? We are not without authority to examine such horizontal combinations when they are proposed. We can conduct classic antitrust analysis to consider possible anticompetitive effects and we have the public interest standard which we can apply on a case-by-case basis. Additionally, we are not the only agency with power and expertise to act in this area. The Department of Justice has adequate authority and an admirable record in evaluating and blocking anticompetitive combinations.

There might be cause for considering a rule if we were seeing numerous cable/DBS combinations, and if we were seeing anticompetitive effects, and if we saw that our existing powers were insufficient to address these problems. But that is not the case. Moreover, we will have the chance to evaluate competitive issues in the context of the Primestar merger, where we will have the benefit of real facts and a real record on which to think through these issues and to test the adequacy of our existing authority. Although the series of questions proposed in the item appear to be balanced, they have the air of a solution in search of a problem.

It may prove true that horizontal combinations among DBS and cable providers limit competition in the MVPD market. So may many other things such as program access restrictions. Indeed, the issue of MVPD competition presents broader questions that should be evaluated comprehensively and not in tiny pieces scattered here and there among orders that have very little to do with the subject. Rather, that inquiry should be posed in the context of a comprehensive inquiry into ways in which the Commission can promote more competition in that market.

In other circumstances, I might agree with my colleagues that it would be best to initiate a rulemaking proceeding where we can solicit broader input. It is my view, however, because we have a case before us that will provide better information to inform our judgment, that this is not a propitious time to begin this inquiry. I respectfully dissent from this portion of the item.