[Federal Register Volume 63, Number 129 (Tuesday, July 7, 1998)]
[Notices]
[Pages 36688-36691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17831]
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FEDERAL COMMUNICATIONS COMMISSION
[CS Docket No. 98-102, FCC 98-137]
Annual Assessment of the Status of Competition in Markets for the
Delivery of Video Programming
AGENCY: Federal Communications Commission.
ACTION: Notice of inquiry.
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SUMMARY: The Commission is required to report annually to Congress on
the status of competition in markets for the delivery of video
programming. On June 23, 1998, the Commission adopted a Notice of
Inquiry to solicit information from the public for use in preparing the
competition report that is to be submitted to Congress in December
1998. The Notice of Inquiry will provide parties with an opportunity to
submit
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comments and information to be used in conjunction with publicly
available information and filings submitted in relevant Commission
proceedings to assess the extent of competition in the market for the
delivery of video programming.
DATES: Comments are due by July 31, 1998, and reply comments are due by
August 31, 1998.
ADDRESSES: Office of the Secretary, Room 222, Federal Communications
Commission, Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Marcia Glauberman, Cable Services
Bureau, (202) 418-7200 or TTY (202) 418-7172.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice of Inquiry in CS Docket No. 98-102, FCC 98-137, adopted June 23,
1998, and released June 26, 1998. The complete text of this Notice of
Inquiry is available for inspection and copying during normal business
hours in the FCC Reference Center (Room 239), 1919 M Street, NW,
Washington, DC, 20554, and may also be purchased from the Commission's
copy contractor, International Transcription Service (``ITS, Inc.''),
(202) 857-3800, 1231 20th Street, NW, Washington, DC 20036.
Synopsis of the Notice of Inquiry
1. Section 628(g) of the Communications Act of 1934, as amended
(``Communications Act''), 47 U.S.C. 548(g), requires the Commission to
deliver an annual report to Congress on the status of competition in
markets for the delivery of video programming. The Notice of Inquiry
(``NOI'') is designed to assist the Commission in gathering the
information, data and public comment necessary to prepare its fifth
annual report on competition in markets for the delivery of video
programming (``1998 Competition Report''). The Commission expects to
use the information submitted by commenters to supplement publicly
available information and relevant comments that have been filed in
other Commission proceedings.
2. For the 1998 Competition Report, we request information and
comment regarding the cable industry, existing and potential
competitors in markets for the delivery of video programming, and the
prospects for increasing competition in these markets. We seek
information to update our assessment of the status of competition and
on changes in the competitive environment since our 1997 Competition
Report, summarized at 63 FR 10222 (March 2, 1998), was submitted to
Congress. Commenters also are invited to identify and comment on
existing statutory provisions and Commission regulations they perceive
as restraining competition or inhibiting development of robust
competition in markets for the delivery of video programming. We note
that, pursuant to section 623(c)(4) of the Communications Act, the
Commission's authority under section 623(c)(3) to review complaints
submitted by local franchising authorities concerning increases in
rates for cable programming service (``CPS'') tiers sunsets on March
31, 1999. See 47 U.S.C. 543(c)(3) and (c)(4). The information gathered
in this report will present the last comprehensive picture of the state
of cable competition prior to the sunset date. For this year's report,
to the extent feasible, we ask parties to submit data and information
that are current as June 30, 1998.
3. As in previous reports, we seek factual information and
statistical data regarding the status of video programming distributors
using different technologies, and changes that have occurred in the
past year. We ask for information on multichannel video programming
distributors (``MPVDs'') using predominantly wired distribution
technologies, including cable systems, private cable or satellite
master antenna television (``SMATV'') systems, and open video systems
(``OVS''). We also request data for those relying predominantly on
wireless distribution technologies, such as over-the-air broadcast
television, multichannel multipoint distribution service (``MMDS''),
instructional television fixed service (``ITFS''), local multipoint
distribution service (``LMDS''), direct broadcast satellite (``DBS'')
service, and home satellite dish (``HSD'') service.
4. In addition to statistical data on each of these delivery
services, we seek information regarding: (a) the number of homes passed
(for wired technologies) and the number of homes capable of receiving
service (for wireless technologies); (b) the number of operators; (c)
the identities of the ten largest operators (national market only); (d)
the number of subscribers and penetration rates; (e) channel capacities
and the number and types of channels offered; and (f) the number and
types of services offered. In addition, we request financial
information for each technology, including firm and industry revenues,
in the aggregate and by sources (e.g., subscriber revenues, advertising
revenues, programming revenues); cash flow; changes in stock prices;
investments; capital acquisition; and capital expenditures.
5. For each video programming distribution technology, we also
request information describing: (a) technological advances (e.g.,
deployment of digital services) that make or may make the technology
competitive; (b) the effort (including steps, costs and time) needed to
increase the number of homes passed or capable of receiving service;
(c) the effort (including steps, costs and time) needed to increase the
number of channels and types of services offered; and (d) regulatory
and judicial developments that affect the use of different
technologies. In addition, in evaluating the extent of competition
among various MVPDs' services or technologies, we seek information and
analysis on the degree to which viewers or consumers consider the
different types of MVPDs to be substitutes and on the extent to which
customers have switched from one provider or technology to another one.
6. In the NOI, we request information on interservice competition
and service to multiple dwelling unit (``MDU'') buildings. We further
seek information that will allow us to compare the cost to consumers of
subscriptions to, and equipment needed to receive, alternative MVPD
services (cable, DBS, MMDS, SMATV, or OVS) and to permit us to better
understand the factors considered by consumers when choosing among
alternative MVPDs. Further, we seek comment on the appropriate method
for comparing the services and costs of different MVPDs.
7. As in prior reports, we will provide updated information in the
1998 Competition Report on the structure of, and rivalry in, markets
for the delivery of video programming. To evaluate market concentration
at the local, regional and national levels, we ask commenters to
provide updated information on industry transactions, including
information on mergers, acquisitions, consolidations, swaps and trades,
cross-ownership, and other structural developments that affect
distributors' delivery of video programming. In local markets where
incumbent cable operators face competition from one or more other video
programming distributors, we seek information on: (a) the identity of
the competitors; (b) the distribution technology used by each
competitor; (c) the date that each competitor entered the market; (d)
the location of the market, including whether it is predominantly urban
or rural; (e) an estimate of the subscribership and market share for
the services of each competitor; (f) a description of the service
offerings of each competitor; (g) differentiation strategies each
competitor is pursuing; and (h) the prices charged for the service
offerings.
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8. With respect to regional concentration (i.e., ``clustering''),
for cable and other MVPDs, we seek information on the geographic areas
served by particular companies and comment regarding the effects
industry consolidation and clustering have had on competition. We also
seek data regarding current national subscribership levels of all
MVPDs, changes in these levels since the 1997 Competition Report, and
the reasons for these changes, including whether such changes are the
result of merger and acquisition activity, marketing strategies, or
other factors. We also would like to evaluate MVPD service providers in
the economic context of the larger communications marketplace based on
their relative size and resources (e.g., revenues) and the extent to
which participants have the ability to enter each others' market.
9. In the 1998 Competition Report, we will update information on
existing and planned programming services, with particular focus on
those programming services that are affiliated with video programming
distributors. We seek information and ask a variety of questions on
programming services that are affiliated with cable operators,
affiliated with non-cable video programming distributors and
unaffiliated with any MVPD.
10. For this year's report, we also request information on the
various program options offered by each MVPD technology, including
exclusive program offerings, the number of channels available, and the
comparability of the program options and packages available with each
technology. We ask whether there are certain programming services or
specific classes of service that an MVPD needs to provide to
subscribers in order to be successful. We request information regarding
the extent that local cable operators or broadcasters are providing
local or regional news or sports channels. In addition, we solicit
information on the extent to which MVPDs offer or plan to offer
electronic programming guides. We also seek information on the extent
to which MVPDs are now offering or plan to offer consumers discrete
programming choices (i.e., service on an ``a la carte'' or individual
channel basis) rather than programming service packages (i.e., tiers of
programming services) and the technical feasibility of offering
programming in a customized manner. Moreover, we seek information and
comment regarding public, educational and governmental (``PEG'') access
and leased access channels.
11. We further seek information and analysis regarding the effect
of increased programming costs on rates, especially for cable service.
We request information and comment on the factors that affect
programming costs for cable operators and other MVPDs. We also ask
about the extent to which the increased programming costs are passed
through to MVPD subscribers and to advertisers.
12. As in previous reports, we will update our assessment of our
program access, program carriage and channel occupancy rules.
Commenters are asked to provide information regarding the effectiveness
of these rules. We request information on whether the coverage of the
program access rules is appropriate, on whether there have been any
cases of MVPDs being denied programming when a satellite delivered
service becomes terrestrially delivered or by non-vertically integrated
programmers, and on any other issues of concern relating to the
availability and distribution of programming.
13. We seek updated information on various technological advances
that may affect industry structure and competition in markets for the
delivery of video programming, including system upgrades and the
deployment of digital technology. We ask whether upgrades are being
undertaken only in specific geographic areas and whether they are
conducted mainly in response to competitive entry. We seek information
on the feasibility of combining distribution technologies (e.g., DBS
and SMATV) and data regarding MVPDs' current use of combined
distribution technologies. We also solicit data on estimated roll-out
or launch dates for new technologies. In addition, we note that an
important aspect of the technological developments taking place relates
to the deployment of set top boxes, integrated receiver/decoders, or
receivers that facilitate or differentiate MVPD service offering. We
ask commenters to identify and describe each type of device, including
its function and capabilities, its costs and availability to consumers.
14. Currently, basic and cable programming service rates are
deregulated where a cable operator faces ``effective competition'' as
defined in the Communications Act, 47 U.S.C. 543(l). We seek comment on
whether the existing test for effective competition is an appropriate
measurement of the existence of competition. Where commenters believe
it is not the correct measure of competition, all or in part, we ask
for suggested alternative means for determining competition.
15. In the last two reports, we examined several case studies of
local markets where cable operators faced actual competition from MVPD
entrants. We seek updated information on the effects of actual and
potential competition in these and other local markets where consumers
have, or soon will have, a choice among MVPDs, including specific data
regarding areas where head-to-head competition exists between cable and
other MVPDs, or among various types of MVPDs, and information on how
such competition has affected prices, service offerings, quality of
service, and other relevant factors.
16. We also would like to gather information on video delivery
competition for and within MDUs. We request information on how common
is it for consumers to have options to choose between or among MVPD
services within a particular MDU and how program offerings and prices
charged by competing MVPDs serving MDUs compare. We solicit information
on how many exclusive service contracts, and how many so-called
``perpetual'' exclusive contracts, exist in MDUs at present and whether
their use is increasing or decreasing. We request comment on the impact
that the recent inside wiring, over-the-air reception device
(``OTARD''), and cable bulk rate rules have had on MDU competition.
17. Finally, we request information regarding existing or potential
regulatory impediments that may deter entry or prevent expansion of
competitive opportunities in video program delivery markets. We also
ask commenters to identify specific Commission rules, policies or
regulations that ought to be reexamined in light of current competitive
opportunities within multichannel video programming markets.
Administrative Matters:
Ex Parte
18. There are no ex parte or disclosure requirements applicable to
this proceeding pursuant to 47 CFR 1.1204(a)(4).
Comment Dates
19. Pursuant to applicable procedures set forth in Secs. 1.415 and
1.419 of the Commission's Rules, 47 CFR 1.415 and 1.419, interested
parties may file comments on or before July 31, 1998, and reply
comments on or before August 31, 1998. To file formally in this
proceeding, participants must file an original and four copies of all
comments, reply comments and supporting comments. If participants
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want each Commissioner to receive a personal copy of their comments, an
original plus ten copies must be filed. Comments and reply comments
should be sent to the Office of the Secretary, Federal Communications
Commission, Washington, DC 20554. Comments and reply comments will be
available for public inspection during regular business hours in the
FCC Reference Center (Room 239) of the Federal Communications
Commission, 1919 M Street, NW, Washington, DC 20554.
Ordering Clauses
20. This Notice of Inquiry is issued pursuant to authority
contained in sections 4(i), 4(j), 403 and 628(g) of the Communications
Act of 1934, as amended.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-17831 Filed 7-6-98; 8:45 am]
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