Report No. CS 99-7                 ACTION IN DOCKET CASE                     May 7, 1999


           FCC RELEASES REPORT ON CABLE INDUSTRY PRICES
                      (MM Docket No. 92-266)

     Cable television subscribers pay less for service in areas where there is direct (head-
to-head) competition than in noncompetitive areas according to the results of a survey
conducted by the FCC.  The Report on Cable Industry Prices (FCC 99-91) is a survey of
cable industry prices covering the period from July 1, 1997 to July 1, 1998.  The survey is
mandated by section 623(k) of the Communications Act of 1934 and reflects information
gathered from a random sample of cable operators. Beyond reporting on the average level
of prices charged for cable services, the survey compares subscriber rates in service areas
facing effective competition and noncompetitive service areas.  The survey also notes that
direct competition is not wide-spread; the FCC found that in this survey period only 246
service areas out of a nationwide total of approximately 30,000 meet the legal definition for
effective competition.  Of that number, 88 face direct head-to-head competition and the
remaining 158 meet the legal definition for effective competition for other reasons.

      The survey found that prices are rising in both competitive and noncompetitive
areas, and that subscribers in competitive areas typically pay less than those in
noncompetitive areas.  The survey shows that subscribers in service areas where there is
effective competition pay 6.3% less on average than subscribers in noncompetitive service
areas.  As of July 1, 1998, the competitive average rate (the cost of basic service, a cable
programming service tier, a remote and a converter) was $28.71 and the noncompetitive
average rate was $30.53.  Premium channel costs are not included in these average costs. 
Per channel rates increased for both groups, but by a rate of increase that was lower than
the increase in average monthly rates.  For the competitive group, per channel rates
increased by 3.6% (from $0.55 to $0.57) and for the noncompetitive group by 1.6% (from
$0.64 to $0.65) during the year ending July 1, 1998.  Further, the average monthly rates
charged by systems facing head-to-head competition was 14% less than the average
monthly rate charged by noncompetitive operators.

     Within the competitive group of operators, the survey found that the average
monthly rate rose by 5.8% between 1997 and 1998.  Over the same time period, the
average number of channels received by subscribers in the competitive group increased
from 53.2 in 1997 to 54 in 1998.  In the noncompetitive group, the average monthly rate
rose by 6.9% between 1997 and 1998.  The average number of channels offered by
operators in the noncompetitive group increased from 47.9 in 1997 to 50.1 in 1998. 
Channels used for premium services are not included in these averages.
Additional findings of the price survey include:

                   As was found in the 1997 price Survey, both competitive and
          noncompetitive operators attribute most of their rate increases to inflation,
          increases in programming costs, channel additions, and system upgrades.

                   For both competitive and noncompetitive operators, the package of services
          offered to subscribers has changed over time.  Both groups have increased
          their systems' capacity and now offer subscribers additional satellite
          channels.  The average number of satellite channels offered by the
          competitive group increased from 39.3 in 1997 to 41 in 1998, and for the
          noncompetitive group, increased from 35.4 to 38 over the same time period.

                   The survey also found that 29% of the operators responding to the survey
          questionnaire offer digital tiers, 19% offer internet access, and 4% offer
          cable telephony.  Approximately one-half of the operators surveyed report
          that they have upgraded their systems to a capacity of 550 MHz or higher.

Action by the Commission May 5, 1999 by Report (FCC 99-91).  Chairman Kennard,
Commissioners Ness, Furchtgott-Roth, Powell and Tristani.

                              -FCC-

Media contact: Morgan Broman at (202) 418-2358
Cable Services Bureau contacts: Daniel Hodes, Kiran Duwadi at (202) 418-7200