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DirecTV cries foul over In Demand pricing

Wed, 06/29/2005 - 8:00pm
Karen Brown

DirecTV Inc. thinks In Demand is making unfair demands, filing a program access complaint with the Federal Communications Commission claiming the video-on-demand provider is giving cable operators better rates for two HD channels compared to satellite competitors.

In the complaint filed Tuesday, DirecTV says that part of the carriage deal for INHD and INHD2 requires satellite providers to pay a per-viewer fee counting all of their customers. In contrast, cable operators pay the same fee, but it only applies to their digital cable subscriber headcount. DirecTV doesn't offer the two channels, but if it did, the 11-cent per customer fee would mean that it would pay three to four times more than cable competitors.

In Demand is a joint venture between MSOs Time Warner Cable, Comcast Corp. and Cox Communications Inc.

The satellite operator is asking the FCC to force In Demand to offer the channels using fees per HD subscriber instead, which would make it comparable to charges cable operators pay. If not, DirecTV would have to charge its HD customers $3 monthly to cover the fee, which would total $1.59 million monthly. DirecTV estimates that Comcast pays roughly 67 cents per HD subscriber, and Time Warner pays 94 cents per HD subscriber.

DirecTV also argues that other HD channels offered by the likes of ESPN and Home Box Office charge only based on the HD subscriber base.

In response, In Demand issued a statement noting it has been in discussions with DirecTV regarding INHD and INHD2 carriage, "and we believe that the allegations in the company's complaint are completely without merit.

"We have always been, and remain, willing to negotiate carriage with any distributor. Our pricing policies are in full compliance with FCC rules and regulations and we're confident that the FCC will find in our favor."

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