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CPT FCC motion on DBS cross ownership and TCI

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INFORMATION POLICY NOTES
January 23, 1996

-    Consumer Project on Technology Asks FCC to Bar TCI and other
     cable operators from acquiring licenses for scarce "Direct
     Broadcast Satellite" (DBS) Television services.  DBS is a
     service like Direct TV or Primestar, that provides video
     programming from a satellite.  The service is supposed to
     compete against monopoly cable franchises.

-    FCC scheduled auction for third of three national DBS
     licenses for Wednesday, January 24, 1996.  On Monday the FCC
     announced that TCI would be one of three bidders for the DBS
     license.

-    TCI is largest cable company in US, an investor in Time-Warner, a partner with US WEST in European networks, and
     major investor in Primestar, one of two current national DBS
     licenses (the other is Direct TV).

Here is the CPT motion.


           BEFORE THE FEDERAL COMMUNICATIONS COMMISSION
       PETITION FOR RULEMAKING AND POSTPONEMENT OF AUCTION

Cross-Ownership Rules for Direct Broadcast   )
Satellite Licenses                           )


            PETITION OF CONSUMER PROJECT ON TECHNOLOGY
           ASKING THAT THE FCC SUSPEND JANUARY 24, 1996
        DBS AUCTION AND ADOPT RULES BARRING TCI AND OTHER
       OWNERS OR OPERATORS OF DBS, CABLE, OR VIDEO DIALTONE
          SYSTEMS FROM ACQUIRING ADDITIONAL DBS LICENSES

     The Consumer Project on Technology (CPT) asks the Commission
to suspend the planned DBS auction for Wednesday, January 24,
1996, and to adopt new auction rules which prohibit cross-ownership between entities that should be competitors. 
Specifically, the following entities should be prohibited from
bidding on new DBS licenses:

1.   Companies that are significant investors in cable television
     or Video Dialtone (VDT) services in the United States.  DBS
     is a service that is supposed to compete against cable or
     VDT.

2.   Companies that are significant investors in other DBS
     satellites.  These license holders should be competing
     against each other.


     The Consumer Project on Technology (CPT) is a project of the
Center for Study of Responsive Law.  The CPT (and the CSRL) is a
non-profit organization created by Ralph Nader to protect
consumers and taxpayers.  Information about the CPT is found on
the Internet at http://www.essential.org/cpt. 

     Cross-Ownership and the Consumer Interest

     The FCC should not allow either a major cable operator or a
current DBS license holder to acquire a new DBS license.  These
entities should be independent competitors.  Competition between
cable operators and DBS,  and between competing DBS license
holders.  This will not happen if the cable operators hold DBS
licenses, or if DBS licenses are jointly owned. It is incredible
and distressing that the FCC would allow a firm that is both a
major cable operator and a part owner in one of three national
DBS licenses (Primestar) to acquire the third national DBS
license.

     No matter how you look at the facts, Tele-communications Inc
(TCI) should not be allowed to acquire a new DBS license.  As the
FCC knows better than anyone, TCI is the nation's largest cable
operator, a major investor in (and sometimes partner with) Time-Warner (the nation's second largest cable operator), a major
investor in the Primestar DBS service, and a partner with US WEST
in European telecommunications network services and in Time-Warner cable properties.

     The only predictable result of allowing TCI to acquire an
additional DBS license will be to increase media concentration,
enhance TCI's enormous monopsony power in markets for video
content services, and eliminate an important source of
competition against cable television franchises.  Consumers and
independent content providers will be harmed if TCI is permitted
to acquire another DBS license.  Indeed, the FCC should be
requiring TCI to divest its interest in PrimeStar, not allowing
acquisition of an additional DBS license.

     If TCI is allowed to acquire the third national DBS license,
it will be an owner or major investor in two the of the three
national DBS licenses, the largest owner of cable franchises in
the U.S., an investor in Time-Warner (the second largest owner of
cable franchises in the U.S.), and a partner with US WEST, the
dominate Local Exchange Telephone company in 14 western states.

     Anti-trust remedies do not substitute for intelligent rules
on cross-ownership.  Anti-trust litigation takes several years
and millions of dollars, and is not a realistic remedy for
consumers which will be harmed by TCI's acquisition of an
additional DBS license.  It is the FCC's job to protect the
public, and to insure that public property is managed in ways
that benefit consumers and promote public interest objectives. 
Greater media concentration and the associated monopoly and
monopsony power are not in the public interest.  If the FCC
allows TCI to acquire an additional DBS license it will have
failed to protect the public.  The FCC has a responsibility to
address the predictable anticompetitive consequences of this
concentration.

     For these reasons, CPT urges the FCC to immediately suspend
the proposed DBS auction on the 24 th of January, 1996, and
reissue auction rules which prohibit TCI and other entities which
own or operate DBS licenses, cable television or Video Dialtone
services from acquiring new DBS licenses.

Sincerely,

/s/                           /s/
_________________________     __________________________
James Love                    Todd Paglia
Director                      Staff Attorney
love@tap.org                  Tpaglia@tap.org

Consumer Project on Technology               
P.O. Box 19367                     
Washington, DC 20036
http://www.essential.org/cpt
202/387-8030

January 23, 1996

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