A Floating High-Rent District

RCA collects bids of $90.1 million for space on a new satellite

It was an auctioneer's dream come true.

Last week, within the starkly modern precincts of one of its Manhattan galleries, Sotheby Parke Bernet, which has put on the block everything from Turner paintings to venerable bottles of Chateau Rothschild, virtually sold empty space. And racked up a record $90.1 million sale doing it.

Sotheby's was helping RCA sell space on its new communications satellite, Satcom IV, scheduled to be launched Jan. 12. As Sotheby's president, John L. Marion, opened the bidding, he stood in front of a back-lit picture of an orbiting Satcom that was no challenge to Turner for delicacy and draftsmanship. But aesthetics were not the point. Up for grabs were leasing rights to seven Satcom transponders. These devices pick up video signals from one point on earth and relay them to other points, enabling their users to distribute cable programs, for example.

Warner Amex and Home Box Office, a subsidiary of Time Inc., plunked down $ 13.7 million and $ 12.5 million respectively for two of the transponders. The high bidder, however, was a new outfit called Transponder Leasing Corp., which paid $14.4 million, and will presumably now turn around and lease out its space to other companies. Also high in the reckoning was Billy H. Batts, 46, a lay minister based in Chattanooga, Tenn., who has plans to establish a Protestant Evangelical and family-entertainment network. That must be a record price for a pulpit.

The Federal Communications Commission has until Jan. 15 to disallow last week's auction and all future proceedings. There are 17 petitions now before the FCC, objecting to the auction mostly on grounds that selling transponders to the highest bidders is "unjustly discriminatory" and unduly inflates the prices. If the commission should agree, RCA is prepared to assign the transponders on a first-come first-served basis. They also have several to spare: Satcom IV carries 24 transponders, of which eight were assigned three years ago, two are "pre-emptable" (meaning, essentially, that they serve as backups) and seven are as yet undesignated.

There are other communications satellites now in orbit (Westar 1, Comstar D2), but cable programmers like Warner Amex and HBO regard the Satcoms as particularly desirable. Reason: their customers, the cable operators around the country, have antennas that can pick up signals from only one satellite at a time. Naturally, the cable operators would rather invest in a single antenna and still receive the widest possible variety of programs to pass on to home subscribers. Since the Satcoms carry almost nothing but cable signals, they offer such a variety. Thus for programmers, leasing a transponder on a Satcom is like moving into the best neighborhood in town.

It may be prudent corporate policy, however, for RCA to hold out space on all its satellites in case of emergency. Those eight previous assignments on Satcom IV are a sobering object lesson, being RCA's way of making good to clients on Satcom III, which was lofted into the air on Dec. 6, 1979 and vanished directly into the great void, where even now it may be circling the starship Enterprise and playing hob with its Tonight show reception.

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