This is the second annual report by the Commission to the United States Congress on the status of competition in the markets for domestic and international satellite communications services as required by Section 703 of the Communications Satellite Act of 1962, as amended. In this Second Report, we focus on calendar year 2007.
We first discuss the structure of the satellite communications services industry and describe six wholesale markets or groups of markets (three domestic and three international) and two retail markets (both domestic). Within these markets, we calculate a range of standard economic indicators commonly used to assess competition and market performance. We also discuss the Commission’s policies about foreign entry into the U.S. market, as well as U.S. companies’ access to foreign markets.
We find in this Second Report, as we did in the First Report, that markets for commercial communications satellite services are subject to effective competition, notwithstanding certain changes in the communications satellite industry since release of the First Report. Moreover, consumers of communications satellite services continue to realize significant benefits in terms of service choice, innovations fostered by technological change and improvements in both space and ground segment, and improvements in service quality. Observed metrics are consistent with good market performance, notwithstanding constraints imposed by industry cost structure and persistent excess capacity.
We note that, because satellite-based multichannel video programming distributors (“MVPDs”) (that is, Direct-Broadcast Satellite (“DBS”) services) and mobile satellite services (“MSS”) are discussed in other annual competition reports issued by the Commission, we do not address them here. In addition, we do not address the Satellite Digital Audio Radio Service (“SDARS”) in this Report. Rather, we refer the reader to the Commission's recent action on the transfer of control application filed by one of the SDARS operators.