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Developing medicines intended for small numbers of patients has little commercial incentive under normal market conditions. Therefore, the EU offers a range of incentives to encourage the development of designated orphan medicines.

Sponsors who obtain orphan designation benefit from protocol assistance, a type of scientific advice specific for designated orphan medicines, and market exclusivity once the medicine is on the market. Fee reductions are also available depending on the status of the sponsor and the type of service required.

Some 60% of designated orphan medicines are intended for paediatric use. Medicines authorised across the EU with the results of studies from a paediatric investigation plan included in the product information are eligible for an extension of their supplementary protection certificate. For designated orphan medicines, the incentive is an additional two years of market exclusivity.

Designated orphan medicines are eligible for conditional marketing authorisation. In some cases, designated orphan medicines may be allowed to be administered to patients under compassionate use, a treatment option that allows the use of an unauthorised medicine outside a clinical study.

At the time of marketing authorisation, sponsors also need to submit an application for maintenance of the orphan designation in order to be eligible for the ten-year market exclusivity incentive. Sponsors may also need to submit an evaluation of orphan similarity.

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As an initial matter, I do not believe that theissuance of this Competition Report fulfills our dutiesunder the Communications Act. Instead of examiningthe state of competition "in the market for the delivery ofvideo programming," 47 USC section 628(g), as thestatute prescribes, the Report artificially limits its analysisto the delivery of "multichannel video programming."(1) There are, of course, many forms of video programmingthat do not come bundled in channels but that are stillpart of the general video distribution market.Unfortunately, the Report does not take full account ofthese very real forces in its investigation of competition.

For instance, the report considers broadcast serviceonly as a competitor to multichannel video programmingdistributors ("MVPDs") in advertising, programmingacquisition, and programming production, see supra atparas. 95-101, but not as an independent delivery sourceof video programming. Yet the statutory definition of"video programming" specifically includes broadcastprogramming. See 47 USC section 602(20) (providingthat "the term 'video programming' means programmingprovided by, or generally comparable to programmingprovided by, a television broadcast station"). In focusingprimarily on what is a submarket of video programming -- the "multichannel" distribution market -- rather thanthe entire market, the report does not fully meet therequirements of the statute.

The language of the statute also makes clear thatCongress considered the delivery of video programmingto constitute a single "market," see id. section 628(g)(referring to "the market" for video programmingdelivery), not a conglomeration of "markets," as the verytitle of this Report suggests in speaking of "[m]arkets"for the delivery of video programming. We should, as aplain statutory matter, have considered the delivery ofvideo programming a single market in this Report.

Thus, in economic terms, the sources that I believeshould be considered in analyzing the amount ofcompetition to cable include, at least, broadcasttelevisions stations, DBS, videotape rentals, motionpictures, even theatrical productions and, at some point inthe not too distant future, internet streaming video.(2) From this perspective on the relevant product market, itwould not, for instance, appear "unlikely that broadcasttelevision will offer consumers a . . . service incompetition with cable," supra at para. 100, but that theyalready do so.

More broadly, when considering the entire videoprogramming market, not just segments of it, one findsthat American consumers have more options for thereceipt of video programming than ever before. At anytime of day, any day of the year, consumers can choosefrom a wide and ever-widening array of videoprogramming for their entertainment, information, andeducation. Among other things, they can watch freebroadcast television, rent a film, go to the theatre, enjoyDBS sports programming, watch cable news, or order apay-per-view movie. It takes some impressive intellectualgymnastics to try and find a lack of competition amongthe providers of these choices in video programming forthe American consumer.

This general analytical problem of the properproduct market manifests itself in the Report in morespecific ways too. Section III looks at market share butconsiders only cable and non-cable MVPDs, not videoprogramming distributors generally. These market sharenumbers are distorted by the use of what is, in myopinion, an inappropriate denominator. Similarly, in thediscussion of concentration levels based on theHerfindahl-Hirschman Index ("HHI"), the Reportmeasures only MVPDs. HHI numbers can be useful inconsidering concentration levels in product markets butthey are rendered meaningless when applied to marketsegments instead of markets.

In sum, because the Report slices the relevantproduct market too thin and thereby paints many actualcompetitors out of the picture, its conclusions about thestate of competition are skewed ab initio. I thus cannotendorse those conclusions.

The objective facts in the Report -- which, as opposedto the conclusions about competition, I have no quarrelwith -- indicate that even in the multichannel-onlyproduct market cable today faces a significant amount ofcompetition and that this competition is likely to grow.

The percentage of MVPD subscribers that purchasecable (85%) is not, in itself, cause for concern. Thismarket share statistic provides no direct evidence of theavailability, or lack thereof, of alternatives to cable,although it is often cited as such. On its face, it only tellsus that many people have opted -- perhaps for reasonsentirely apart from lack of choice -- for cable companiesover other video distributors. The reasons that consumerschoose certain video products over others arecomplicated, based on personal cost-benefitdeterminations, and cannot be adduced from this number.

In short, it simply does not follow from the fact thatcable has a preponderance of MVPD customers that cablehas an unlawful or inefficient hold on the market. TheFCC should not be in the business of trying to drive downthe percentage of MVPD subscribers who take cable. Instead, we should create an environment that allowsalternative providers to meet market demand for theseservices by removing regulatory impediments like rateregulation.

DBS is making dramatic gains, presenting mountingcompetition to cable. The Report blinks reality insuggesting that DBS is not having a real competitiveeffect in the multichannel video programming market. DBS subscribership has jumped by 2.2 million since Juneof 1997, an increase of 43%. See id. at para. 62. According to Paul Kagan Associates, "DBS is on courseto capture nearly two-thirds of all new multichannelsubscriptions sold in the U.S. Of the 3.6 mil. projectednew broadband subs in 1998, some 2.2 mil. will be sold bythe three main DBS providers." Marketing New Media,Oct. 19, 1998. For these reasons, market analysts havecalled DBS "'the fastest-growing consumer electronicsproduct in history.'" Antennae Attract Viewers toSatellite TV, Wall Street Journal at B-1, Dec. 1, 1998(quoting Jimmy Schaeffler, chairman, Carmel Group).

The Report itself states that "to meet competition and customer demands for more video channels andadvanced services, MSOs must continue to improve theirsystems through increased channel capacity," supra atpara. 38, and documents large infrastructure investments,id. at paras. 37-41 (noting, among other things, that thelargest MSOs have "spent as much as half a billiondollars each on capital expenditures"). These facts arereflective of a market in which, increasingly, cable willplay catch-up with DBS. See, e.g, Satellite TV rivals tomerge services, Washington Times at B-7, Dec. 15, 1998(noting that Hughes Electronics' purchase of USSBwould "expand DirecTV's 185-channel programminglineup to more than 210 channels" and that EchostarCommunication's purchase of News Corp. satellites "willmean more channels and services for Echostarsubscribers, including 500 channels, Internet access andother date services"). Sounding not at all likemonopolists, cable companies are now asserting, inresponse to actions taken by DBS, that they can stillcompete in the MVPD market. Antennae Attract Viewersto Satellite TV, Wall Street Journal at B-1 ("'Any cablesystem with an upgraded technical platform can be fullycompetitive with any DBS company'") (quoting Julian A.Brodsky, vice chairman of Comcast Corp.). 2351a5e196