[Congressional Record Volume 142, Number 11 (Friday, January 26, 1996)]
[Senate]
[Page S490]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AUCTION OF SATELLITE SLOT BRINGS IN MILLIONS FOR AMERICAN TAXPAYERS
Mr. DOLE. Mr. President, I ask unanimous consent that today's New
York times article entitled, ``News Corp. and MCI Win Satellite Slot''
be printed in the Record. The sale of this national resource is a
windfall for American taxpayers. Many thought it would only bring in
$20 million to $100 million. But the experts were wrong. It brought in
a whopping $682.5 million. Senator McCain and Senator Brown deserve
recognition, and our thanks, for pushing through the legislation that
made this auction possible.
There being no objection, the article was ordered to be printed in
the Record, as follows:
[From the New York Times, Jan. 26, 1995]
News Corp. and MCI Win Satellite Slot
Bid of $682 Million to Beam TV to Homes
(By Edmund L. Andrews)
Washington, January 25.--After a brief but spirited bidding
war, MIC Communications and Rupert Murdoch's News Corporation
agreed today to pay the Federal Government $682 million for
the last unclaimed orbital slot for a satellite that can beam
television straight to individual homes across the United
States.
The two companies, which have formed a joint venture to
build and operate the system, said they planned to invest
another $1 billion and hoped to begin offering both
television and a broad range of business communication
services within two years.
``We are talking about much, much more than higher quality
television,'' said Bert C. Roberts, the chairman and chief
executive of MCI, in a satellite-linked news conference with
Mr. Murdoch.
But some analysts remain skeptical about the idea. MCI and
the News Corporation paid top dollar for the license, more
than twice that Tele-Communications Inc. of Denver was
willing to pay when it dropped out of the Federal
Communications Commission's auction on Wednesday.
The two companies will also be years behind several rivals,
all of which either can or will beam more than 150 channels
of television to relatively small antennas.
``I'm scratching my head, trying to figure out where they
are going,'' said Daniel P. Reingold, a telecommunications
analyst with Merrill Lynch.
DirectTV, a subsidiary of General Motors' Hughes
Electronics, has signed up 1.2 million subscribers who
receive service over antennas about 18 inches in diameter.
And its pace is likely to speed up because the AT&T
Corporation bought a small stake in the company this week and
plans to start marketing its service through the AT&T sales
force.
Echostar Communications of Englewood, Colo., which lost out
to MCI in today's auction, already owns another direct-
broadcast license and has launched its first satellite. It
hopes to beam about 75 channels of television in March and to
double that capacity with a second satellite by the end of
the year.
And Primestar Partners, a consortium owned by several of
the country's biggest cable television companies, is
marketing a similar service that customers receive on bulkier
three-foot-wide satellite dishes.
Today, however, Mr. Roberts and Mr. Murdoch radiated
confidence and said they had much more in mind than simply
emulating traditional cable television. Mr. Roberts described
beaming things like medical images between hospitals, video
training materials for corporations and high-speed data links
to connect far-flung offices of a company.
Winning this license will allow MCI and the News
Corporation to embark on the first tangible project of the
alliance they formed nearly a year ago, in which MCI paid $2
billion for a 13.5 percent stake in News Corporation.
As the nation's second-largest long-distance carrier, MCI
has been struggling to move beyond its traditional business
and match moves made by both AT&T and the Sprint Corporation.
Sprint, meanwhile, has teamed up with four of the country's
biggest cable companies in a bid to offer a full range of
telephone, cable television and wireless communication
services.
The new satellite license will allow the two companies to
beam more than 200 channels of television programming over
direct-broadcast satellites, high-powered satellites whose
signals can be received by pizza-sized 18-inch dishes in
individual homes.
Under the new joint venture, MCI said it would take lead
responsibility for developing business communication services
and the News Corporation would take the lead on consumer
services. Mr. Murdoch said the consumer business would focus
primarily on competing with traditional cable television
operators.
Mr. Murdoch has already been both shrewd and highly
successful in the satellite television business overseas. In
Europe, the News Corporation owns a 40 percent in B Sky B, a
service that now has five million subscribers. And in Asia,
the News Corporation owns Star TV, which beams television and
radio over Japan, Korea, China and India.
MCI, despite its difficulties in branching beyond the long-
distance market, has nevertheless repeatedly shown itself a
master of marketing prowess that has generally outpaced both
AT&T and Sprint in the long-distance arena.
David Roddy, a communications analysts with Deloitte &
Touche Consulting Group, said MCI had particular need for
obtaining the last unclaimed satellite spot for direct-
broadcast television because it had no other way of
distributing entertainment and other forms of media.
``A lot of people are asking whether MCI can afford to do
this, but my answer is, can they afford not to do it?'' Mr.
Roddy said.
Medicare Reimbursement for Tamoxifen
Mr. HATCH. Mr. President, each year in this country approximately
180,000 women are diagnosed as having breast cancer, a terrible disease
that will claim nearly 50,000 lives. But, nearly 2.6 million women are
breast cancer survivors, in part because of the availability of
Tamoxifen citrate, a widely used post-operative drug for this disease.
My colleagues may not be aware that a low-cost version of Tamoxifen
is available on the market today. As a result, the estimated 800,000
women who take two tablets per day of this lower cost medicine are
saving a total of $81 million a year.
It has not been widely publicized, but during consideration of the
Balanced Budget Act, a provision was included in the now-vetoed
conference report to amend the Medicare Program to include
reimbursement for Tamoxifen. In an effort to lessen the cost of this
expansion of Medicare reimbursement, a rebate was included to reduce
the cost of the drug to the Federal Government when covered as part of
Medicare.
Unfortunately, I believe my colleagues were unaware of the negative
effects of this rebate provision when it was passed as part of the
budget bill. One notable drawback is that the provision would have set
the very undesirable precedent of establishing a Medicare rebate. Such
a rebate would be unwise policy for a number of reasons, but that is
not the focus of my remarks here today.
More importantly, as a result of this new and unprecedented Medicare
rebate, the provider of the low-cost alternative of Tamoxifen would no
longer be able to make this product available in the domestic market.
That is because the rebate, combined with the terms of a contract
negotiated between the lower cost provider and the drug innovator,
would cause the lower cost provider to lose money on each bottle of
Tamoxifen sold.
Ironically, for Medicare beneficiaries and other consumers, the
result of what I believe was a well-intentioned amendment could only be
higher prices for this life-saving breast cancer therapy. Such a result
would indeed be tragic, and I hope that my colleagues will give this a
second thought as future Medicare bills are developed.
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