Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming
Federal Communications Commission
Federal Communications Commission
Washington, D.C. 20554In the Matter of
Annual Assessment of the Status of
MB Docket No. 07-269
Competition in the Market for the
Delivery of Video Programming
NOTICE OF INQUIRY
Adopted: November 27, 2007
Released: January 16, 2009
Comment Date: February 27, 2009
Reply Comment Date: March 27, 2009
TABLE OF CONTENTSHeading
INTRODUCTION .................................................................................................................................. 1
II. MATTERS ON WHICH COMMENT IS REQUESTED ...................................................................... 4
A. Competition in the Market for the Delivery of Video Programming............................................... 4
B. Cable Television Service ............................................................................................................... 29
C. Direct-to-Home Satellite Services.................................................................................................. 41
D. Other Wireline Service Providers .................................................................................................. 49
1. Local Exchange Carriers ......................................................................................................... 49
2. Broadband Service Providers .................................................................................................. 53
3. Open Video System Operators ................................................................................................ 54
4. Electric and Gas Utilities......................................................................................................... 55
E. Broadcast Television Service......................................................................................................... 56
F. Wireless Cable Systems ................................................................................................................. 72
G. Private Cable Operators ................................................................................................................. 73
H. Commercial Mobile Radio Service Providers and Other Wireless Providers................................ 74
Web-Based Internet Video............................................................................................................. 77
J. Advanced Services......................................................................................................................... 79
K. Technical Issues ............................................................................................................................. 81
L. Foreign Markets ............................................................................................................................. 91
III. PROCEDURAL MATTERS................................................................................................................ 92
Federal Communications Commission
INTRODUCTION1. This Notice of Inquiry ("Notice") solicits data and information for the Commission's 14th
annual report ("2007 Report").1 Congress imposed an annual reporting requirement on the Commission
in the Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act")2 as a
means of obtaining information on "the status of competition in the market for the delivery of video
programming." In this Notice, we request information, comments, and analyses that will allow us to
evaluate the status of competition in the video marketplace, changes in the marketplace in the last year,
prospects for new entrants, factors that have facilitated or impeded competition, and the effect these
factors are having on consumers' access to video programming.3
2. We ask commenters to provide data on video programming distributors, including cable
systems; direct broadcast satellite ("DBS") services; large home satellite dish ("C-Band") providers;
broadband service providers ("BSPs"); private cable operators ("PCO"), also called satellite master
antenna television systems; open video systems ("OVS"); wireless cable systems using frequencies in the
broadband radio and educational broadband services; local exchange carrier ("LEC") systems; utility-
operated systems; commercial mobile radio services ("CMRS") and other wireless providers; and over-
the-air broadcast television stations. In addition, we seek information on video programming distributed
over the Internet and via Internet Protocol ("IP") networks. We also seek information that will allow us
to evaluate horizontal concentration in the video marketplace, vertical integration between programming
distributors and programming services, and other issues relating to the programming available to
consumers. We request information on technical issues, including equipment and emerging services. We
continue to seek comments regarding developments in foreign markets, as they may contribute to our
understanding of domestic markets and provide insight into factors affecting video competition. Where
possible and relevant, we request data as of June 30, 2007.
3. The accuracy and usefulness of the Report and its findings are related directly to the quality
of the data and information we receive from commenters in response to this Notice. We encourage
thorough and substantive submissions from industry participants and state and local regulators with the
best knowledge of the questions and issues raised. We will augment reported information with
submissions in other Commission proceedings. In the past, we have had to rely on data from publicly
available sources when information has not been provided directly by industry participants. To the extent
necessary, we expect to do so again in compiling the 2007 Report. Nevertheless, we are concerned that such
publicly available data may not be adequate to gain a full understanding of the state of competition in the
video marketplace, especially when various sources provide inconsistent data. Thus, it is important for us to
1 This Notice is not intended to express any Commission views, or to prejudice the outcome of any Commission
proceeding, but only to elicit information and data for purposes of this Report to Congress.
2 Pub. L. No. 102-385, 106 Stat 1460 (1992) ("1992 Cable Act").
3 Section 628(g) of the Communications Act of 1934, as amended ("the Act") requires the Commission to report
annually on the status of competition in the video marketplace. See Communications Act of 1934, as amended
628(g), 47 U.S.C. 548(g). The Commission's previous reports appear at: Implementation of Section 19 of the
1992 Cable Act (Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming,
9 FCC Rcd 7442 (1994) ("1994 Report"); 11 FCC Rcd 2060 (1996) ("1995 Report"); 12 FCC Rcd 4358 (1997) ("1996
Report"); 13 FCC Rcd 1034 (1998) ("1997 Report"); 13 FCC Rcd 24284 (1998) ("1998 Report"); 15 FCC Rcd 978
(2000) ("1999 Report"); 16 FCC Rcd 6005 (2001) ("2000 Report"); 17 FCC Rcd 1244 (2002) ("2001 Report"); 17
FCC Rcd 26901 (2002) ("2002 Report"); 19 FCC Rcd 1606 (2004) ("2003 Report"); 20 FCC Rcd 2755 (2005)
("2004 Report"); 21 FCC Rcd 2503 (2006) ("2005 Report). The 2006 Report is forthcoming.
Federal Communications Commission
FCC 07-207receive complete and accurate information directly from industry sources, as well as from non-industry
MATTERS ON WHICH COMMENT IS REQUESTED
Competition in the Market for the Delivery of Video Programming4. General Statistical Data: We seek information and statistical data for each type of
multichannel video programming distributor ("MVPD"), including:
the number of homes passed by each wired technology;
the number of homes capable of receiving service via each wireless technology;4
the number of subscribers and penetration rates for cable services, including basic cable
service tier ("BST"), cable programming service tier ("CPST"), themed tiers (e.g., family tiers,
foreign-language tiers), digital cable service, digital tiers, a la carte services, pay-per-view
("PPV"), and video-on-demand ("VOD");
for noncable MVPDs, the number of subscribers and penetration rates for each available
programming tier, a la carte services, PPV, and VOD;
how such cable penetration/subscription rate numbers were derived, and whether the party
providing the data considers it a representative sample of the overall cable industry;
available channel capacity of the system; the number, type, and identity of video
programming channels offered; the channel capacity required for such offerings and the tier
or tiers on which such programming is offered; and the channel capacity of the system used
for non-video services;
prices charged for various programming packages and the equipment required to receive
industry and individual firm financial information, such as total revenue and revenue by
individual company segments or services, cash flow, and expenditures;
information on how video programming distributors compare in terms of relative size and
data that measure the audience reach of video programming networks as well as relative
control over the video distribution market; and
information on video distributor expansion into new markets, such as local telephony, high-
speed Internet access, wireless telephone service; the percentage of subscribers taking these
services; and the competitive advantages of offering these services, as well as information on
new technologies being considered, tested, or deployed by MVPDs for video, voice, and data
4 This includes the number of line-of-sight homes for distribution technologies that require line of sight for reception.
Federal Communications Commission
FCC 07-2075. Head-to-Head Competition: In previous reports, we have found that many consumers have a
choice between over-the-air broadcast television, a cable service, and at least two DBS providers.5 In
some areas, consumers also may have access to video programming service from a second cable system
operated by a company traditionally considered a LEC or BSP. Furthermore, emerging technologies,
such as digital broadcast spectrum and video over the Internet, provide some consumers with additional
options for multichannel video programming service. We are interested in data and information on the
number of homes that have a choice of MVPD services. How many households can receive service from
one or more providers (e.g., DBS, wireless cable, PCO) as well as an incumbent cable provider? We are
aware that the number of consumers with access to a wireline overbuilder (e.g., a LEC, BSP, OVS
provider) is relatively low.6 We seek comments and data on the number of consumers with access to
wireline overbuilders, such as the number of homes passed by more than one wireline MVPD. As part of
this request, we want to identify markets where wireline competition exists, where entry is likely in the
near future, and where wireline competition once existed but failed. What market characteristics affect
competition between MVPDs?
6. We seek comment on the benefits for consumers of head-to-head competition in the market
for video programming. What effect has competition between MVPDs had on prices, programming
choices, quality of service, and the introduction of more advanced services (both video and non-video)?
Is there evidence of price competition, given that the average monthly cable rate has risen faster than the
general inflation rate?7 Commission data indicate that the average monthly rate cable subscribers are
charged for the combined basic and CPST service tiers rose approximately 93 percent since the period
immediately prior to Congress's enactment of the Telecommunications Act of 1996.8 Indeed, the cost of
the CPST rose more than 6 percent or twice the rate of inflation between 2004 and 2005.9 Commission
data indicate that the average number of channels offered on the combined basic and CPST service tiers
rose from 43.6 to 70.5 between 1995 and 2005.10 Is there evidence that cable subscribers demand and
benefit from these additional channels, even at the cost of higher monthly bills? How many channels on
average do consumers actually watch? Would the availability of greater consumer choice spur
competition by giving consumers a greater selection of price options and more control over the
programming they receive?
7. We also ask whether the effect of competition varies depending upon the nature of the
competitors.11 To evaluate substitution between MVPD technologies, we seek data on the relative prices
5 See, e.g., 2005 Report, 21 FCC Rcd at 2506 5.
6 An overbuilder is an MVPD that builds a second cable system "over" one that already exists.
7 See Implementation of Section 3 of the Cable Television Consumer Protection and Competition Act of 1992,
Statistical Report on Average Rates for Basic Service, Cable Programming Service, and Equipment, 21 FCC Rcd
15087, 15090 10 (2005) ("2005 Price Survey").
8 See 2005 Price Survey, 21 FCC Rcd at 15087 2.
9 See id.
10 See id. at 15111 Attachment 10. In 2006, the average U.S. home received 104.2 channels, and the average
household tuned to 15.7, or 15.1 percent of the 104.2 channels available. The Nielsen Company, Average U.S.
Home Now Receives A Record 104.2 TV Channels (press release), Mar. 19, 2007.
11 See 2005 Price Survey, 21 FCC Rcd 15087 at 2 ("Prices are 17 percent lower where wireline cable competition
is present. DBS competition, however, does not appear to constrain cable prices average prices are the same as or
slightly higher in communities where DBS was the basis for a finding of effective competition than in
Federal Communications Commission
FCC 07-207of similar services offered by different types of competitors. Many cable operators offer or plan to offer
bundled service packages, such as video, voice, and high-speed data, as do other MVPDs. What effect
does bundling have on head-to-head competition, and what effect does it have on MVPDs that do not
offer bundled services due to technical or other limitations? 12 We are interested in investigating methods
for measuring and comparing bundled service packages, such as video, voice, and high-speed data, among
8. We seek comment on marketing of MVPD services, especially the nature and extent of
promotional discounts or other incentives offered to win or retain customers, the prevalence of bundled
service offerings, and how these figures compare to markets in which the only competition is between
cable and DBS. We also request information on the number of customers switching from one technology
to another and the factors responsible for consumers' decisions to switch among MVPDs, as well as the
percentage of those customers that drop MVPD service altogether. Head-to-head competition can
introduce technology choices to consumers. We request information on the effect that a requirement to
purchase or lease set-top box equipment has on consumers' willingness to switch providers. What effect
does the offering of discounted equipment or services with a service contract have on customers' choice
of MVPD provider?13 What effect does the availability or unavailability of cable navigation devices at
retail have on these decisions by consumers?
9. Impact of Regulatory Environment and Barriers to Entry: Barriers to entry can be regulatory,
technological, or financial in origin. We seek to understand what these barriers are and how they impede
competition in the MVPD marketplace. Are there any existing Commission regulations or statutory
provisions that prevent new entrants from promptly deploying their networks and offering consumers new
video service options? We seek comment on specific actions that the Commission may take to reduce
barriers to competition in the video marketplace and increase consumer choice. The Commission has
observed that, for many participants in the marketplace, the ability to offer video to consumers and the
ability to deploy broadband networks rapidly are intrinsically linked.14 To what extent, if any, does the
current regulatory regime discourage investment in broadband networks over which video services may
be delivered? Are there steps that Congress and the Commission may take to encourage investment in
new broadband networks? We seek comment on what modifications, if any, are needed to pertinent
regulations or statutes to foster competition in the deployment of broadband networks and the provision
of video services.
10. In particular, we seek comment on franchising and other local and state regulations and their
effect on competition in the video marketplace. What is the impact of the local franchise process on new
providers' entry into local markets? The Commission recently adopted a new regulatory regime for local
12 For example, Cox Communications reports that it is facing aggressive video competition from satellite and LECs,
but is still experiencing strong growth, in part because of its bundled service offerings. Cox reports that some video
customers are returning to Cox services after subscribing to a competitor. See Cox Communications, Cox Answers
the Phone and Says "Hello" to Continued Growth, Cox Sees Record Year-Over-Year Gains in Phone Subscribers
(press release), May 1, 2007; see also Cox Communications, A Decade of Bundling Delivers Cox Communications
Considerable Competitive Advantages (press release), Jan. 30, 2007.
13 For example, DIRECTV has an equipment lease program. See DIRECTV, at
http://www.directv.com/DTVAPP/global/moreInfo.jsp?productId=6016 9 (visited May 30, 2007).
14 See, e.g., Exclusive Service Contracts for Provision of Video Services in Multiple Dwelling Units and Other Real
Estate Developments ("MDU NPRM"), 22 FCC Rcd 5935 1 (2007). See also 47 U.S.C. 521 (6) and 47 U.S.C.
157, nt. (incorporating Section 706 of the Telecommunications Act of 1996, Pub. Law No. 104-104, 110 Stat. 56
(1996) (stating that the Commission shall promote competition in the local telecommunications market and shall
remove barriers to infrastructure investment).
Federal Communications Commission
FCC 07-207franchising authorities ("LFAs") intended to foster competitive entry into the video marketplace.15 In the
Franchise Order, the Commission concluded that the current operation of the franchising process
constitutes an unreasonable barrier to entry that impedes the achievement of the interrelated federal goals
of enhanced cable competition and accelerated broadband deployment. The Commission found that
drawn-out local negotiations with no time limits, unreasonable build-out requirements, unreasonable
requests for "in-kind" payments that attempt to subvert the 5 percent cap on franchise fees, and
unreasonable demands with respect to public, educational, and government access (or "PEG") are
examples of unreasonable refusals to award competitive franchises.16 To what extent have the new
franchise rules and procedures affected competitive entry into the video marketplace? Similarly, we note
that a number of states have enacted franchising reform laws recently. How have these state laws
facilitated of otherwise changed the prospects for new entrants into the field?
11. We also request comment on recent developments that affect or will affect the ability of
MVPDs to compete, including their ability to gain access to programming networks, pole attachments,
conduits, and ducts for the delivery of their services to consumers. What effects do existing Commission
regulations and other provisions of law specific to video competition have on the market? What
regulatory changes, if any, have facilitated or hindered head-to-head competition in local markets
between or among video programming distributors? Are there regulatory or statutory factors influencing
the ability of providers to include new services along with more traditional television programming? In
November 2007, the Commission adopted an R&O and FNPRM relating to the use of exclusive contracts
for the provision of video services to multiple dwelling units ("MDUs") or other real estate
developments.17 In the Order, the Commission prohibited the enforcement or execution of existing
exclusivity clauses and the execution of new ones by MVPDs subject to Section 628 of the Act. In
addition, the Commission in May 2007 took additional steps to eliminate barriers to competitive entry in
MDUs and in multi-unit premises when a new entrant seeks to compete with an incumbent provider.18
Specifically, the Commission clarified that (1) competitive video service providers must not be forced to
cut through sheet rock to connect their cable wiring to cable home wiring inside a unit and (2) competing
telephone companies must have access to the incumbent's inside wire subloops in multi-unit premises at
the terminal block to install service.
15 Implementation of Section 621(a)(1) of the Cable Communications Policy Act of 1984 as amended by the Cable
Television Consumer Protection and Competition Act of 1992, 22 FCC Rcd 5101 (2007) ("Franchise Order and
FNPRM"). The Commission also initiated a further notice to examine how the findings in the Franchise Order have
affected existing franchisees, and what local consumer protection and customer service standards should apply to
new entrants. Id.
16 Franchise Order and FNPRM, 22 FCC Rcd at 5111-12, 5149, 5150-57 21-22, 105, 109. The Franchise Order
and FNPRM has been challenged by local government groups. See Alliance for Community Media v. FCC, No. 07-
3391 (6th Cir. filed April 3, 2007); GMTC v. FCC, No. 07-9518 (10th Cir. filed April 3, 2007); National Association
of Counties v. FCC, No. 07-1985 (3d Cir. filed April 3, 2007); National Association of Telecommunications Officers
and Advisors v. FCC, No. 071270 (4th Cir. filed April 3, 2007); Tampa v. FCC, No. 07-11464-D (11th Cir filed April
3, 2007). The challenges were consolidated in the 6th Circuit as Alliance for Community Media, et al. v FCC, No.
07-3391 (6th Cir. filed April 3, 2007).
17 See Exclusive Service Contracts for Provision of Video Services in Multiple Dwelling Units and Other Real Estate
Development, 22 FCC Rcd 20235 (2007).
18 See Telecommunications Services Inside Wiring Customer Premises Equipment, Implementation of the Cable
Television Consumer Protection and Competition Act of 1992: Cable Home Wiring, and Clarification of the
Commission's Rules and Policies Regarding Unbundled Access to Incumbent Local Exchange Carriers' Inside Wire
Subloop, 22 FCC Rcd 10640 (2007) ("Inside Wiring").
Federal Communications Commission
FCC 07-20712. Programming Networks: We request detailed information about nonbroadcast programming
networks, including ownership, the type of programming networks (e.g., national, regional, local) and the
genre of programming networks (e.g., sports, news, children's, general entertainment, foreign language).
We ask MVPDs to identify any programming network that is carried by one or more of its systems. We
seek information on existing, planned, terminated, or merged programming networks to assess the
changes over the past year in the amount and type of video programming that is available to consumers.
In addition, we note that programming networks are being offered in a variety of forms (e.g., multiplexed
networks, VOD, shared channels), and we seek comment on whether and how to count such programming
networks for assessing trends in vertical integration. The number of international and foreign language
networks carried by MVPDs has increased significantly in recent years. s19 Should these networks be
counted in our total for the number of national networks and used for the calculation of the percent of
networks that are vertically integrated, given that many are simply retransmissions of foreign broadcast
stations or networks?20 We also request information on the transmission format or formats of each
network (i.e., analog, standard definition ("SD"), and/or high definition ("HD")). Furthermore, we ask
commenters to provide information regarding the delivery mode (i.e., satellite delivery, terrestrial
delivery) of each national and regional network. We are unaware of any comprehensive source of this
information and rely on industry sources to submit these data.
13. We ask for information on the number and ownership of national nonbroadcast networks.
We also seek information about the proportion of national nonbroadcast networks that are vertically
integrated with a cable operator. How does the counting of international networks, as discussed above,
affect the calculation of the proportion of networks that are vertically integrated? We also seek to identify
programming networks affiliated with broadcast television station licensees not also owned by a cable
operator; and programming networks that are owned by MVPDs other than cable operators (e.g., DBS
operators). Moreover, in order to assess trends in vertical integration, we solicit comment and
information on the common ownership or affiliation among MVPDs, video programming networks,
sports teams, and/or sports venues. We also seek information on the ownership of regional networks, in
particular whether they are vertically integrated with cable operators, DBS operators, or other video
distributors, including broadcasters. How many regional networks are delivered by satellite and how
many are delivered terrestrially?
14. Furthermore, we seek information on several specific types of programming, including
locally originated programming, children's programming, foreign language programming, and PEG
programming. We request information on the extent to which locally originated programming is
delivered to consumers by broadcasters and MVPDs, and the factors affecting the production and
availability of locally originated programming. Additionally, to what extent do video programming
distributors provide children's programming, and local news and community affairs programming? To
what extent is programming offered in languages other than English, both at the national and local levels,
on all video distribution platforms, and to what extent is such programming produced originally in a
language other than English? Is such programming generally available to all distributors? To what extent
is foreign language programming offered as part of the CPST? To what extent is foreign language
programming offered as a separate tier? Where it is offered as a separate tier, are subscribers required to
purchase the CPST or obtain additional equipment in order to receive foreign language programming?
We also seek comment regarding PEG access, including the number of channels currently being used by
cable operators for this purpose. What programming services are DBS operators providing to meet their
19 See Letter from Bradley K. Gillen, Counsel for EchoStar Satellite L.L.C., to Marlene H. Dortch, Secretary, FCC,
Mar. 28, 2007 (Ex Parte Presentation in MB Docket No. 06-189).
Federal Communications Commission
FCC 07-207public interest obligations?21 We also request information on the use of leased access channels and the
types of programming distributed on them, and seek comment on whether these channels provide an
opportunity for independent programmers to distribute their programming.
15. Program Carriage Issues: We seek comment on programmers' access to MVPDs'
transmission systems and their ability to gain carriage. The Commission's program carriage rules
prohibit a cable operator or other MVPD from requiring "a financial interest in any program service as a
condition for carriage" of such service,22 from coercing a programmer to grant "exclusive" carriage
rights,23 or from engaging in conduct that unreasonably restrains "the ability of an unaffiliated
programming vendor to compete fairly" by discriminating against such vendor "on the basis of affiliation
or nonaffiliation."24 The Commission's rules also limit the number of channels that a vertically integrated
cable operator may devote to programming networks in which it has an attributable interest ("Channel
Occupancy Rules").25 In addition to establishing rules governing program carriage, the Commission has
established procedures for the review of program carriage complaints and has established appropriate
penalties and remedies. These procedures generally provide for resolution of a complaint on the basis of
a complaint, answer, and reply.26
16. We seek comment on the effectiveness of the program carriage and channel occupancy rules
Furthermore, we request information on the number of independent networks that launched in the past
year, including total subscribers; the distributors that carry them; the manner of carriage (e.g., expanded
basic, digital tier, themed digital tier, VOD); and their ongoing efforts to obtain further distribution by
cable, DBS, and other service providers. We also request information and comment on program carriage
issues and their impact on various types of independent programming networks. Specifically, we request
comment regarding any difficulties programming networks encounter when launching a new service and
information on the kinds of carriage arrangements that are required to secure MVPD carriage. The
Commission imposed a commercial arbitration remedy regarding regional sports network ("RSN") access
to Comcast and Time Warner cable systems, recognizing concerns regarding the ability of these
companies to unlawfully refuse to carry unaffiliated RSNs.27 We seek information from RSN
programmers that have secured carriage on cable systems through the arbitration process and ask whether
the procedures established by the Commission have facilitated access to such programming.
21 DBS operators' public interest obligation requires them to reserve 4 percent of their channel capacity for
"noncommercial programming of an educational or informational nature." 47 C.F.R. 25.701. See Implementation
of Section 25 of the Cable Television and Consumer Protection Act of 1992, Direct Broadcast Satellite Public
Interest Obligations, 13 FCC Rcd 23254 (1998).
22 47 C.F.R. 76.1301(a).
23 47 C.F.R. 76.1301(b).
24 47 C.F.R. 76.1301(c).
25 47 C.F.R. 76.504.
26 See 47 C.F.R. 76.1302(c), (d), (e). On March 2, 2007, the Commission adopted a Notice of Proposed
Rulemaking seeking comment on the program carriage rules and procedures. The notice seeks comment on whether
and how our processes for resolving carriage disputes should be modified. See Leased Commercial Access,
Development of Competition and Diversity in Video Programming Distribution and Carriage, 22 FCC Rcd 11222
27 Application for Consent of Assignment and/or Transfer of Control of Licenses from Adelphia Communications
Corporation to Time Warner Cable Inc., and from Adelphia Communications Corporation to Comcast Corporation,
21 FCC Rcd 8203, 8287 189 (2006) ("Adelphia Order"). See also notes 36 and 67 infra.
Federal Communications Commission
FCC 07-20717. We seek comment on whether carriage by one or more of the largest MVPDs is necessary for
the successful launch of a new programming network. To what extent do start-up programming networks
find it necessary to forgo license fees or offer launch fees, equity stakes, or exclusive carriage
arrangements in order to secure MVPD carriage? Are new networks facing difficulty gaining carriage in
either analog or digital format? Is the success of a new programming service dependent on the tier of
service on which it is placed? With the accelerating rollout of video-on-demand platforms, are new
networks finding they must demonstrate demand for their service through VOD before they can negotiate
for placement on analog or digital programming tiers? To what extent do new programming services that
provide a genre of programming already offered by a competing and established network have difficulty
obtaining carriage? With the increase in MVPDs' channel capacities and the creation of digital tiers on
cable, is channel capacity still a barrier to obtaining distribution? How much channel capacity is
available on the analog tier, and how does this affect the economics of new programming services? Are
programming services being developed strictly for digital tiers?
18. Program Packaging: We seek information on how video programming distributors package
and market their programming. We seek information on which program networks are included in
MVPDs' various programming tiers and packages. To what extent are MVPDs offering programming on
an a la carte basis or in mixed bundles, themed tiers, and subscriber-selected tiers?28 A number of cable
multiple system operators ("MSOs"), and DBS operators DIRECTV and EchoStar, now offer family-
friendly programming packages.29 To what extent have these packages been deployed? Are these
packages available to all subscribers in an MVPD's service area? If not, what proportion of each
MVPD's subscribers can purchase the family tier? We seek information on the cost and content of these
programming packages. Are family tiers offered on a stand-alone basis or must consumers subscribe to
other tiers (e.g., basic service tier, digital tier) to receive them? Do subscribers need additional equipment
to receive the family tier? Are cable and DBS operators advertising these packages, and are operators
making them available across their entire service territory? What is the subscribership to these packages?
What factors inhibit the creation of such tiers? Do MVPDs offer or plan to offer consumers more choice
in channel selection, specifically a la carte or themed tiers, rather than traditional tiering of programming
services? In February 2006, the Media Bureau released its Further Report on the Packaging and Sale of
Video Programming Services to the Public, finding that greater choice could benefit consumers.30 In
28 Mixed bundling refers to the practice of allowing consumers the choice of purchasing channels either on an a la
carte basis or as part of the bundles an MVPD chooses to provide. Under a themed tier model, MVPDs offer one or
more tiers of programming with a particular theme, which would allow a consumer to pay a subscription fee only for
that genre of programming. Under a subscriber-selected tier model, consumers could choose the content of the tier
to be purchased; for example, if a subscriber desired a mix of program network types, such as sports, movies, and
children's programming, he or she would be able to select a prescribed number of channels for a set price from
among the MVPD's offerings.
29 Cox Communications, Inc., Cox Communications Announces Family Friendly Package (press release), Jan. 10,
2006; Time Warner Inc., Time Warner Launches Family Choice Tier (press release), Dec. 15, 2005; Comcast Corp.,
Comcast Announces Family Tier (press release), Dec. 22, 2005; Insight Communications Company, Insight
Communication Announces Plans for Family-Friendly Tier of Programming (press release), Jan. 17, 2006; EchoStar
Communications Corporation, DISH Network Offers "DishFAMILY" Programming Tier, Providing Parents with
Worry-Free TV; Low Cost Package Furthers DISH Network's Standing as Lowest-Priced All Digital TV Provider in
Nation (press release), Feb. 1, 2006; DIRECTV Inc.; DIRECTV to Offer Family Programming Package; New Tier
Offers More Than 40 Channels of Family-Friendly Programming Including Boomerang, Disney, Noggin, PBS Kids
Sprout and a Wide Variety of Public Interest Channels (press release), Jan. 18, 2006.
30 Further Report on the Packaging and Sale of Video Programming Services to the Public, Media Bureau, Feb. 9,
2006, available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-263740A1.pdf.
Federal Communications Commission
FCC 07-207addition, the Commission's April 2007 report to Congress on excessively violent television programming
and its impact on children observed that MVPDs could provide consumers greater choice in how they
purchase their programming so that they could avoid violent programming (e.g., an a la carte regime
would enable viewers to buy their television channels individually or in smaller bundles).31 We request
comment on MVPDs' efforts to increase consumer options for purchasing programming, especially those
efforts that address these issues.
19. MVPD Access to Programming: We seek information on specific programming services,
whether they are national or regional/local, that are unavailable to cable or noncable operators. We seek
to assess the extent to which MVPDs have been able to acquire or license programming owned by other
video distributors (e.g., cable operators, broadcasters). What effect does vertical integration have on
competing distributors' abilities to obtain programming? To what extent are noncable MVPDs producing
their own programming, and, if so, is such programming available to competing MVPDs? Do cable or
noncable MVPDs secure exclusive rights to certain programming services? We seek information on
exclusive contracts for all types of programming, which would allow an analysis of the trends and
competitive effects of exclusive contracts for national, regional, and local programming. Do any of these
agreements provide an MVPD exclusivity that extends beyond its service area? We are aware of
DIRECTV's agreement with NFL Sunday Ticket that extends through the 2010 football season32 and
Major League Baseball's brief exclusive relationship with DIRECTV.33 Are there similar examples of
exclusive programming agreements? What are the costs of producing or securing such programming, and
have new wireline entrants encountered any difficulty in doing so? Is there specific programming,
national or regional/local, that is unavailable to either cable or noncable operators and, if so, why? How
has this changed over the past year? How many and what type of programming networks are delivered
terrestrially? Are such networks available to competing MVPDs? How do these various factors affect an
MVPD's ability to compete?
20. We also seek comment on MVPDs' access to particular genres of programming. Are there
certain "must-have" programming services,34 or genres of services (e.g., regional sports) without which
competitive video service providers may find themselves unable to compete effectively? If so, which
services or categories of services are involved and to what extent are there substitute services? In
previous years, MVPDs that compete with incumbent cable operators have asserted that they have
difficulty obtaining access to what they consider must-have programming (e.g., RSNs), which are often
owned by, or affiliated with, cable operators. In the News-Hughes Order, the Commission addressed
allegations of potential harms arising when certain programming is vertically integrated with an MVPD.
To address these concerns, the Commission adopted a condition that permits the use of commercial
31 Violent Television Programming and Its Impact on Children, 22 FCC Rcd 7929 (2007).
32 DIRECTV, Inc., DIRECTV Extends and Expands Exclusive NFL SUNDAY TICKET Agreement with NFL
Through 2010 Season (press release), Nov. 8, 2004. See also NFL SUNDAY TICKET, at http://www.nfl.com/ticket
(visited May 16, 2007).
33 See MLB.com and DIRECTV, Inc., MLB, DIRECTV Extend, Expand Multi-Year Agreement (press release), Mar.
8, 2007. Subsequently, Major League Baseball reached an agreement with iN DEMAND. See MLB.com, MLB
Announces iN DEMAND Deal (press release), Apr. 4, 2007.
34 Some MVPDs indicate that there are certain programming services that they "must-have" to attract subscribers
and be able to compete. Such services include, but are not limited to, regional sports and news networks, and local
broadcast stations. See, e.g., General Motors Corporation and Hughes Electronics Corporation, Transferors, and
The News Corporation Limited, Transferee, Consolidated Application For Authority to Transfer Control, 19 FCC
Rcd 473 (2004) ("News-Hughes Order").
Federal Communications Commission
FCC 07-207arbitration to resolve disputes regarding access to RSNs.35 The Commission also imposed arbitration
conditions regarding access to RSN programming in the Adelphia Order.36 We seek information
regarding MVPDs, or their bargaining agent, that have secured access to such programming through the
arbitration process and ask whether the procedures established by the Commission have facilitated access
to such programming.
21. Program Access Issues: We request comment on the effectiveness of our program access
rules.37 We seek comment on the effectiveness of these rules and information regarding MVPDs'
experiences obtaining programming that is owned by, or affiliated with, competing MVPDs. We ask
commenters to provide information on the delivery technology used (i.e., terrestrial or satellite) to
distribute specific programming networks to MVPDs. What, if any, video programming services that
were once delivered to MVPDs by satellite have been migrated to terrestrial delivery? Of newly launched
networks, how many are terrestrially delivered? Which terrestrially delivered networks are unavailable to
some MVPDs under the so-called terrestrial exemption to the Commission's program access rules?38 To
what extent are terrestrially delivered programming services owned by, operated by, or affiliated with a
programming distributor available to other video programming distributors? What exclusive
programming arrangements exist between programmers and MVPDs? Do any of these arrangements
provide an MVPD exclusivity that extends beyond its service area? What incentives exist for
programmers to grant exclusive distribution rights? With the advent of VOD, what are the competitive
implications of video programming distributors securing exclusive rights to programming for inclusion in
their VOD offerings?
22. Rural and Smaller Markets: We request comment on competition issues specific to video
programming distribution in rural and smaller markets. We seek information on the number of MVPDs
serving small and rural markets, their subscribership, the services and video programming options they
offer, the technology used to provide their services, and the cost for such video services. We are
35 News-Hughes Order, 19 FCC Rcd at 552-555, 677-679, 172-179, App. F. III. The Commission also imposed a
similar arbitration condition applicable to retransmission consent negotiations for News Corp.'s Fox television
36 Adelphia Order, 21 FCC Rcd 8203, 8274, App. B & C, 8258-9, 8262-79 124-125, 130-169. See also note 27
supra and note 67 infra.
37 Section 628(c)(5) directs that the prohibition on exclusive programming contracts would cease to be effective on
October 5, 2002, unless the Commission found that such prohibition "continues to be necessary to preserve and
protect competition and diversity in the distribution of video programming." 47 U.S.C. 548(c)(5). In 2002, the
Commission concluded that the prohibition remained necessary and extended the term for five years. See
Implementation of the Cable Television Consumer Protection and Competition Act of 1992 Development of
Competition and Diversity in Video Programming Distribution: 548(c)(5) of the Communications Act: Sunset of
Exclusive Contract Prohibition, 17 FCC Rcd 12124 (2002). The Commission recently issued a Notice of Proposed
Rulemaking to examine whether the rule on exclusive programming contracts for satellite cable programming or
satellite broadcast programming between vertically integrated programming vendors and cable operators continues
to be necessary beyond October 5, 2007. See Implementation of the Cable Television Consumer Protection and
Competition Act of 1992, Development of Competition and Diversity in Video Programming Distribution: Section
628(c)(5) of the Communications Act: Sunset of Exclusive Contract Prohibition, 22 FCC Rcd 4252 (2007). The
Notice also seeks comment on whether and how the Commission's procedures for resolving program access disputes
under Section 628 should be modified. In this Notice of Inquiry, we request comment on the effectiveness of our
program access rules. See also 47 C.F.R. 76.1000-1004, 76.1507.
38 47 U.S.C. 548(i). The program access rules only apply to satellite cable programming and satellite broadcast
programming. See also 47 U.S.C. 605(d).
Federal Communications Commission
FCC 07-207particularly interested in information on the experiences of independent cable system operators (i.e., cable
systems not affiliated with the largest MSOs). How does competition differ between rural and smaller
markets and larger, urban areas? A number of small cable operators and rural LECs are upgrading their
facilities to offer a wider range of video and advanced services. We seek information on alternative
technologies, such as digital subscriber line ("DSL") and fiber-based Internet Protocol television
("IPTV") that small and rural operators are adopting. We also seek information on the extent to which
cable systems in rural and smaller markets have been upgraded. What percentage of systems have
upgraded to 750 MHz or greater capacity? What percentage of small cable systems elect to provide
digital tiers and services without upgrading? How does converting to a digital tier and not upgrading to a
750 MHz or greater capacity cable plant affect the system's competitiveness? We further request
information on the effect, if any, that changes in local franchising requirements (e.g., a local versus a
statewide franchising regime) are having or will have on small and rural operators.
23. We seek information about the ability of small and rural cable operators and LECs to secure
access to programming. In particular, we seek information on whether video programming buying
cooperatives, such as the National Cable Telecommunications Cooperative ("NCTC"), help small or rural
operators obtain programming at discounted rates. We also seek information on any differences, if any,
between the types of programming packages and services in demand in small and rural markets as
compared to larger, urban areas. What percentage of total expenses goes to acquiring programming?
What advanced services are available in rural and smaller markets, including the availability of digital
cable service, cable modem service, VOD, and telephony, and are they offered in bundled packages with
24. MVPD Service in Alaska and Hawaii: We also seek specific information regarding MVPD
service available in Alaska and Hawaii. We are interested in whether, and how, cable, DBS, and other
MVPD services offered in these states differ from that provided in other states. What competitive
alternatives are available to consumers in Alaska and Hawaii? We seek information on the number of
subscribers to each type of MVPD (e.g., cable, DBS) and the share of the market served by each. Are
MVPD subscribers offered the same number of channels and choice of video programming services
(broadcast and non-broadcast) as are available to subscribers in other states? How do prices for the
various packages of service (e.g., BST, CPST, themed tiers, digital cable service, digital tiers, PPV,
VOD) compare to the average national price for such MVPD services? We also seek information on any
differences in the equipment needed by consumers to receive video programming service. In particular,
do DBS subscribers in Alaska and/or Hawaii require larger dish antennas than are needed to obtain
service in the rest of the country? To what extent are MVPDs offering telephony and high-speed Internet
service along with video programming service? If so, we seek information on how these services are
packaged and priced. Commenters are asked to provide information regarding these issues and any others
addressed in this Notice as they pertain to MVPD service and competition in Alaska and Hawaii.
25. Multiple Dwelling Units: Multiple dwelling units ("MDUs") comprise a separate segment of
the MVPD marketplace because alternative video providers may have difficulty offering service in MDUs
in competition with an incumbent provider.39 We seek comment on any factors that are unique to
competition in MDUs. As noted above, the Commission adopted an R&O and FNPRM relating to the use
of exclusive contracts in the MDU video provider marketplace and the impact of their use on the federal
goals of enhanced multichannel video competition and accelerated broadband deployment.
39 MDUs may include rental apartments, as well as condominiums and co-operatives.
Federal Communications Commission
FCC 07-207What effects do the inside wiring,40 over-the-air reception device ("OTARD"),41 and cable bulk rate42
rules have on MDU competition? How comparable are the program offerings and prices charged by
video programming distributors serving MDUs to those available to non-MDU customers in the
surrounding area? Are video distributors providing advanced services, such as high-speed Internet access
and telephony, to MDU customers?
26. Access to Programming by Persons with Disabilities: Video programming distributors are
required to caption 100 percent of all new non-exempt English-language programming on each channel.43
In addition, a video programming distributor must include captioning in 30 percent of its "pre-rule"
English-language programming on each channel during each calendar quarter.44 We seek comment on
any concerns the public has with their video programming distributors meeting the 100 percent
benchmark for new English language programming, which became effective on January 1, 2006. We
seek information on captioning quality, accuracy, placement, technology, and any instances of missing or
delayed captions.45 We also seek comment on the issues related to digital programming including
programming that contains closed captions translated from analog closed captions.46 The Commission
has received several complaints that some digital programming lacks captioning. This may be due to
digital programming not being captioned because it falls within an exemption to the closed captioning
rules or because of technical problems in the delivery of the captions to the viewer. We seek comment on
these issues. What experiences have viewers had with video programming distributors when trying to
resolve problems related to a lack of digital captioning? What experiences have viewers had with
captioning that is out of sync with the spoken words, or captioning that is cut off when scenes switch,
when there are commercial breaks, or before a show has concluded? What issues arise with respect to the
positioning of captioning on the television screen over the speaker's face, textual material being
considered, or the progress of a sporting event? Is captioning that is presented with the first showing of a
program retained when the program is repeated? We especially seek information regarding real-time
captioning of local newscasts, weather reports, and emergency information.47
40 See 47 C.F.R. 76.800-806 et seq.
41 47 C.F.R. 1.4000.
42 47 C.F.R. 76.984(c)(3).
43 47 C.F.R. 79.1(b)(1) (phase-in schedule for captioning "new" English language programming, which is defined
as programming first published or exhibited on or after January 1, 1998). Video programming first published or
exhibited for display on television receivers equipped for display of digital transmissions or formatted for such
transmission is defined as "new" as of July 1, 2002. 47 C.F.R. 79.1(a)(6)(ii). See Closed Captioning
Requirements for Digital Television Receivers, Closed Captioning and Video Description of Video Programming,
Implementation of Section 305 of the Telecommunications Act of 1996, Video Programming Accessibility, 15 FCC
Rcd 16788, 16808-09 60 (2000) ("Digital Captioning Order").
44 47 C.F.R. 79.1(b)(2) (phase-in schedule for "pre-rule" programming). See also 47 C.F.R. 79.1(a)(6)
(definition of pre-rule programming).
45 See Closed Captioning of Video Programming, Telecommunications for the Deaf, Inc., Petition for Rulemaking,
20 FCC Rcd 13211 (2005).
46 Translation uses the original NTSC line 21 608 format captions (i.e., analog captions) and generates 708 format
captions. See Electronics Industries Association, Digital Television Closed Captioning, EIA-708-B, 1999.
47 Commission rules require that emergency information provided in the audio portion of the programming must be
made accessible using closed captioning or other methods of visual presentation, such as open captioning, crawls,
scrolls, or appropriate signage that appear(s) on the screen. In the case of individuals who are blind or have low
Federal Communications Commission
FCC 07-20727. Between January 1, 2007, and December 31, 2009, the phase-in schedule for "new" Spanish
language programming requires distributors to caption at least 1,350 hours of Spanish-language
programming or all of its new non-exempt Spanish language programming per channel per quarter,
whichever is less.48 After January 1, 2005, each video programming distributor must caption 30 percent
of its pre-rule non-exempt Spanish-language programming on each channel during each calendar
quarter.49 The rules exempt several specific classes of programming from closed captioning
requirements.50 Video programming providers also may petition the Commission for an exemption from
the closed captioning rules if the requirements would impose an undue burden.51 The closed captioning
rules are enforced through a complaint process, with the complaint initially directed to the video
programming distributor responsible for compliance with the rules.52 In anticipation of increased
captioning requirements set to take effect in January 2008, we seek comment on what, if any, concerns
industry and the public have with meeting these increased captioning requirements for new Spanish
language and "pre-rule" English language programming.53 We also seek information on the level and
quality of captioning for non-English language programming.
28. We also request comment on the availability of video description services, currently provided
by programmers on a voluntary basis.54 We request information regarding the amount and types of video
programming that includes video descriptions and whether MVPDs generally carry video descriptions
inserted by programmers.
Cable Television Service(Continued from previous page)
vision, emergency information that is provided in the video portion of a regularly scheduled newscast, in a newscast
that interrupts regular programming, or in "crawls" or "scrolls" during regular programming must be made aurally
accessible. There are no exemptions to these rules. See Reminder to Video Programming Distributors of Obligation
to Make Emergency Information Accessible to Persons with Hearing Disabilities Using Closed Captioning, 21 FCC
Rcd 15084 (2006).
48 47 C.F.R 79.1(b)(3)(iii). The previous closed captioning requirement for this programming between January 1,
2004, and December 31, 2006, was 900 hours. See 47 C.F.R 79.1(b)(3)(ii). As of January 1, 2010, and thereafter,
100 percent of the programming distributor's new non-exempt Spanish language video programming must be
provided with captions. 47 C.F.R. 79.1(b)(3)(iv).
49 47 C.F. R. 79.1(b)(4)(i). As of January 1, 2012, and thereafter, 75 percent of the programming distributor's pre-
rule non-exempt Spanish language video programming being distributed and exhibited on each channel during each
calendar quarter must be provided with closed captioning. 47 C.F.R. 79.1(b)(4)(ii).
50 47 C.F.R 79.1(d).
51 47 C.F.R 79.1(f).
52 47 C.F.R 79.1(g).
53 Specifically, effective January 1, 2007, at least 1,350 hours or all new non-exempt Spanish language
programming, whichever is less, must be captioned per channel per quarter. 47 C.F.R. 79.1(b)(3)(iii). Effective
January 1, 2008, 75 percent of all non-exempt English language pre-rule programming must be captioned. 47
54 In August 2000, the Commission adopted rules requiring certain larger broadcasters and video programming
distributors to include "video descriptions" with a small amount of their programming to increase their accessibility
to persons with visual disabilities. See Implementation of Video Description of Video Programming, 15 FCC Rcd
15230 (2000), on recon., 16 FCC Rcd 1251 (2001). On November 8, 2002, the U.S. Court of Appeals for the D.C.
Circuit vacated the Commission's video description rules, finding that they exceeded the Commission's authority.
See Motion Picture Association of America v. FCC, 309 F.3d 796 (D.C. Cir. 2002).
Federal Communications Commission
FCC 07-20729. We request data and comments on the current state of competition in the cable industry,
including system upgrades, ownership transactions, and program packaging.
30. System Upgrades and Channel Capacity: Cable operators have reduced their spending for
the rebuilding and upgrading of their plant in recent years, while increasing their capital expenditures for
customer premises equipment as advanced service subscriptions have grown.55 We request information
regarding cable operators' continuing investments to upgrade their plant and equipment to increase
channel capacity, create digital services, or offer advanced services. One method for increasing capacity
is switched digital video, which is a method of delivering programming to subscribers only when those
subscribers actively request that programming, as opposed to delivering all programming feeds at the
same time to all subscribers. To what extent are cable operators using switched digital video to increase
their system capacity? What other technologies are cable operators using to increase digital channel
capacity? How is bandwidth allocated between analog and digital tiers, and between video and non-video
services, and what factors influence that decision?
31. For individual MSOs, we request information on the number of systems upgraded, the analog
channel capacity resulting from upgrades, the digital channel capacity resulting from upgrades (including
the digital to analog compression ratio used), the number of systems with digital tiers, the number of
households where digital cable services are available, and the number of subscribers to these digital
services. We also request information regarding cable systems that have not upgraded their plant or
increased channel capacity in recent years. We seek information on the number of systems, the number
of homes passed by such systems, and the number of subscribers to systems that have not upgraded their
facilities. We specifically seek information on the number of homes, if any, that are passed by systems
having less than 36 activated channels.
32. We seek information on the extent to which cable operators use capacity devoted to digital
video programming to provide digital duplicates of existing analog channels, to carry high definition
signals of over-the-air broadcasts, or to carry multiple streams of programming of over-the-air
broadcasters. To what extent is new capacity used for non-video services? What types of non-video
services are being offered? How much of the capacity and bandwidth are dedicated to these services?
33. We also seek information on cable operators who have launched or plan to launch digital
simulcasts of their analog channel lineups on one or more of their systems.56 What effect do simulcasts
have on channel capacity? What are the prospects for, and what are the obstacles to, the development of
cable facilities that rely exclusively on digital transmission techniques for the distribution of video
programming? Have cable operators indicated when they anticipate going all digital? We seek comment
on the benefits to consumers of an all digital system. How have the structure and price of service tiers
changed when systems become all digital? How would they change in the future as more systems
become all digital? What are the implications for customer premises equipment?
34. Ownership Transactions and Clustering: We seek information on mergers and other cable
system transactions during the past year, including the names of the buyer and seller, date of the
transaction, type of transaction (i.e., sale or swap), name and location of the system, homes passed and
number of subscribers, and the price. Have such transactions and consolidations been more likely to
55 See, e.g., Mariam Rondeli, HSD, Cable Telephony Headline Q2 Earnings Season, Cable TV Investor: Deals and
Finance, Kagan Research, Inc., July 31, 2006, at 6-7.
56 Generally, cable operators deliver a combination of analog and digital signals. A digital simulcast involves the
digitization of the analog tier of programming at the operator's headend. The all-digital signal is then delivered
alongside the analog signal.
Federal Communications Commission
FCC 07-207occur in certain types of markets, or between certain size systems? We continue to monitor the practice
of clustering, whereby operators concentrate their operations in specific geographic areas. We request
data and comment on its effect on competition in the video programming distribution market. How many
transactions resulted in an MSO establishing a presence in a new area versus adding to an existing
cluster? As cable operators eliminate headends and more closely integrate their systems, what regulatory
and technical issues arise that can affect competition? What effect does clustering have on economies of
scale and scope? We seek comment on the acquisition of PCO systems by major MSOs, and the effect on
competition in the market.
35. Program Packaging: We seek information on whether and how cable operators are changing
the way they package programming and the role actual or potential competition played in any such
changes.57 Are cable operators restructuring their tiers by shifting programming from the BST to the
CPST or from these tiers to digital or premium tiers? To what extent do cable operators offer multiple
CPSTs or digital tiers? To what extent do they offer themed tiers, such as a family tier? Where cable
operators provide digital tiers, do they offer, or plan to offer, digital programming genre packages or
themed tiers (e.g., family, sports, lifestyle themed tiers) or programming on an a la carte basis? We
request data on the programming included on these tiers and their cost, including information on whether
subscribers must purchase other tiers in order to subscribe to themed tiers or to purchase channels on an a
la carte basis. We are interested in information on whether and, if so, how cable operators are
restructuring their programming packages and tiers of service as a result of actual or potential
competition. We also seek data on how many cable subscribers subscribe only to basic tiers (i.e.,
"lifeline" tiers). We seek comment on relevant trends in pricing of basic tiers.
36. Other Regulatory Issues: Section 612(g) Benchmarks. Section 612(g) of the Act states that:
(1) "at such time as cable systems with 36 or more activated channels are available to 70 percent of
households within the United States" and (2) "are subscribed to by 70 percent of the households to which
such systems are available, the Commission may promulgate any additional rules necessary to provide
diversity of information sources."58 We previously concluded that the first prong of the test has been
met.59 We request data and comment on whether both prongs of the 70/70 test have been met. That is,
cable operators should submit the following information on a zip code basis:
1. Total number of homes the cable operator currently passes;
2. Total number of homes the cable currently passes with 36 or more activated channels;
3. Total number of subscribers, including all subscribers in MDUs; and
4. Total number of subscribers with 36 or more activated channels.
57 See U.S. General Accountability Office, Issues Related to Competition and Subscriber Rates in the Cable
Television Industry, GAO-04-8 (Oct. 2003) ("2003 GAO Report") (finding that, in markets with a wire-based
competitor, cable operators rates are up to 15 percent lower than in markets without a wire-based competitor;
finding that in markets where DBS companies offer local broadcast services, cable operators improve the quality of
their service); U.S. General Accountability Office, Wire-Based Competition Benefited Consumers in Selected
Markets, GAO-04-241 (Feb. 2004) ("2004 GAO Report") (in a case of six market pairs, in which one market was
served by a broadband service provider ("BSP") and the other one was not, GAO found that BSP entry benefited
consumers in the form of lower prices for subscription television, high-speed Internet access, and local telephone
58 47 U.S.C. 532(g). This provision was added to the Communications Act by the Cable Communications Policy
Act of 1984, Pub. L. No. 98-549, 98 Stat. 2779.
59 2005 Report, 21 FCC Rcd at 2513 32.
Federal Communications Commission
FCC 07-207To the extent that cable operators filed 2007 data for the purposes of complying with our 2006 Video
Competition Report, they need not submit this same data again.60 We also seek comment on whether
telephone companies that provide video service and overbuilders should be included in the 70/70
37. Under Sections 614 and 615 of the Communications Act, cable operators must set aside up to
one third of their channel capacity for the carriage of commercial television stations and additional
channels for noncommercial stations depending on the system's channel capacity.61 Commercial
broadcast television stations may elect carriage on cable systems pursuant to either mandatory carriage
(must carry) or retransmission consent.62 If a television station elects must carry, the cable operator is
required to carry the signal without compensation. Alternatively, when a station elects retransmission
consent, the cable operator and broadcaster negotiate the terms of carriage. Broadcast television stations
carried pursuant to either retransmission consent or must carry count towards the required set-aside for
the carriage of commercial broadcast stations.63 We request data on the percentage of broadcast stations
carried on cable pursuant to retransmission consent agreements and the percentage that are carried
pursuant to the must carry provisions. We also seek information on the percentage of their required set-
aside channels that cable operators currently are using to carry local broadcast signals. With respect to
television stations carried pursuant to retransmission consent, to what extent do cable operators pay cash
for broadcast station carriage rights, carry nonbroadcast programming networks, provide advertising time,
or otherwise compensate broadcasters? To what degree have compensation arrangements changed from
non-cash to cash in recent years? If commenters identify such a trend, we request information on when it
began and what marketplace factors appear to be driving it. We ask commenters to address the
retransmission consent process, including the effect of retransmission consent compensation on cable
rates, the ability of small cable operators to secure retransmission consent on fair and reasonable terms,
and the impact on MVPDs and consumers of agreements that require the carriage of nonbroadcast
networks in exchange for the right to carry local broadcast stations. We seek comment on these and any
other issues relating to must carry and retransmission consent that affect competition in the market for the
delivery of video programming.
38. Section 612 of the Communications Act established the leased access rules, which require a
cable operator to set aside channel capacity for commercial use by video programmers unaffiliated with
the operator and provide standards for rates, terms and conditions for the use of leased access.64 The 1992
Cable Act gives the Commission the authority to: (1) determine the maximum reasonable rate that a cable
operator may establish for leased access use, (2) establish reasonable terms and conditions for leased
access, and (3) establish procedures for the expedited resolution of leased access disputes.65 The
methodology for determining the applicable leased access rate is proscribed in the Commission's rules.66
60 See 2006 Report at 43. Any false certification made to the Commission may be punished by fine and/or
imprisonment under 18 U.S.C. 1001. We also emphasize that any false information provided to the Commission
pursuant to the requirements set forth above may be similarly punished under 18 U.S.C. 1621.
61 47 U.S.C. 614(b), 615(b); 47 C.F.R. 76.56.
62 47 C.F.R. 76.64(f).
63 47 C.F.R. 76.56; see also 47 C.F.R. 76.55(c) (definition of a qualified local commercial television station).
64 47 C.F.R. 76.971.
65 47 U.S.C. 532(c)(4).
66 47 C.F.R. 76.970-977.
Federal Communications Commission
FCC 07-20739. We seek comment regarding leased access channels, including the number of channels
currently being used by cable operators for these purposes and the types of programming offered on such
channels. In addition, we seek information on the use of commercial leased access channels, either on a
part-time or full-time basis. Are these channels accomplishing their intended purpose of providing
competition to the programming channels under the control of the cable operator? In the Adelphia Order,
the Commission addressed allegations of potential public interest harm for nationally distributed
programming.67 To address concerns raised by commenters, the Commission adopted a condition that
permits the use of commercial arbitration to resolve disputes regarding commercial leased access.68
Pursuant to this condition, programmers seeking to use commercial leased access may submit disputes
about the terms of access to an arbitrator for resolution. The arbitrator will be directed to settle disputes
about pricing in accordance with the formula set forth in the Commission's leased access rules.69 We
seek information regarding programmers that have secured carriage through the arbitration process and
ask whether the procedures established by the Commission have facilitated leased access carriage
agreements. In addition, the Commission's recent notice on leased access solicits comment on a range of
issues, including, for example, the rate formula, alternative rate methodologies, and the effect of the
digital transition on channel capacity and channel count for purposes of the calculation of carriage
obligations and average rates.70
40. We also request comment on the "tier buy-through" option mandated by Section 623(b) (8) of
the Communications Act,71 including the percentage of subscribers taking advantage of this option; the
problems, if any, it creates; the manner in which cable operators make this option known to the public;
and the extent to which the option is applicable (i.e., the extent to which programming is offered or
purchased on a per-program or per-channel basis).
Direct-to-Home Satellite Services72
41. As of the end of June 2006, direct to home ("DTH") (i.e., DBS and C-Band) operators served
approximately 27.97 million subscribers, led by DBS operators DIRECTV and EchoStar.73 We seek
67 See Adelphia Order. Commenters argued that Comcast's and Time Warner's increased subscribership as a result
of the transactions will allow them, either unilaterally or in concert with each other, to determine which
programmers survive in the video marketplace. Id. at 8250 100. See also paras. 16 and 20 supra.
68 Id. at 8253-54 109. This condition is in effect for six years from the date of adoption of the Adelphia Order,
July 13, 2012.
69 47 C.F.R. 76.970.
70 Leased Access NPRM at 22 FCC Rcd at 11225 8-9. See note 26 supra.
71 47 U.S.C. 543(b)(8). See also 47 C.F.R. 76.921. This provision permits subscribers to purchase programming
offered on a per-channel or per-program basis without first subscribing to tiers, other than the basic service tier. It
became fully effective on October 5, 2002, ten years after adoption of the Cable Act of 1992.
72 DTH services use satellites to deliver video programming directly to subscribers. C-Band users employ relatively
large dishes (4-8 feet in diameter) to receive programming. DBS uses relatively small receiving dishes (18-24
inches in diameter). See, e.g., 1995 Report, 11 FCC Rcd at 2080-85 49-53; 1998 Report, 13 FCC Rcd at 24323
73 See C-Band Numbers Keep Dwindling, Satellite Business News FAXUpdate, July 7, 2006 at 2; The DIRECTV
Group, Inc. SEC Quarterly Report Form 10-Q Pursuant to Section 13 or 15(d) of the Securities Act of 1934 for the
Quarterly Period Ended June 30, 2006, at 19; and EchoStar Communications Corp., SEC Quarterly Report From
10-Q Pursuant to Section 13 or 15(d) of the Securities Act of 1934 for the Quarterly Period Ended June 30, 2006, at
Federal Communications Commission
FCC 07-207information and data that explain the factors contributing to DBS' growth in the video programming
market, which may help us assess whether those characteristics will continue to position DBS as cable's
principal competitor. We request any consumer surveys identifying differences between consumers who
choose to subscribe to DBS or C-Band, rather than choose cable or another video programming
distributor. What percentage of new DBS subscribers are former cable subscribers? What percentage are
former C-Band households? What factors influence cable subscribers' decisions to switch to DBS and
42. The Commission and the U.S. Government Accountability Office ("GAO") have found that
the presence of a wire-based competitor has a measurable downward impact on the average monthly cable
rate,74 but is there evidence of meaningful price competition between DBS and cable? Do initial DBS
equipment costs or other factors prevent cable subscribers from switching despite escalating monthly
cable bills? Does the dynamic between the platforms change in markets where DBS offers local
43. We seek information on the geographic characteristics of DTH subscribers. Are they more
likely to reside in urban areas than rural areas, or vice versa? To what extent do DBS subscribers reside
in areas not passed by cable systems? We note that a 2005 GAO report found that DBS penetration rates
have been and remain highest in rural areas, but since 2001, DBS penetration has grown most rapidly in
urban and suburban areas, where the penetration rates were originally low.75 We seek updated
information on the geographic characteristics of DBS subscribership and the factors that account for its
relative strengths or weaknesses in different markets (e.g., areas not served by a cable or other wireline
provider vs. other areas). We continue to monitor technical limitations, such as line-of-sight
requirements, which impede the availability of DBS to some potential subscribers, in particular MDU
residents and residents in areas with natural obstructions, such as trees. How many, or what percentage
of, households cannot receive DBS service because they are not within the line-of-site of the satellite
44. DIRECTV and EchoStar have supplemented their satellite fleets to provide a wider range of
programming, in particular high definition programming.76 We seek updated information on the
deployment of these satellites as well as information regarding pending additions to DBS satellite fleets,
which will result in increased channel capacity or the provision of advanced services. We request
information on DBS operators' current channel capacity and how they allocate it. What technical
methods are DBS providers using to increase capacity?
45. Local-into-Local:77 Pursuant to the Satellite Home Viewer Improvement Act of 1999
74 See, e.g., Statistical Report on Average Rates for Basic Service, Cable Programming Service, and Equipment, 20
FCC Rcd 2718 (2005); 2003 GAO Report; 2004 GAO Report, supra, note 57.
75 See GAO, Telecommunications: Direct Broadcast Satellite Subscribership Has Grown Rapidly, But Varies Across
Different Types of Markets, GAO 05-257 (Apr. 2005).
76 See, e.g., James Hibberd, Suddenly, the Race Is on for HD Channels, ELECTRONIC MEDIA, Jan. 15, 2007, at 3 and
EchoStar Communications Corp., DISH Network Expands Nation's Largest HD Package; More National HD
Channels, More HD Regional Sports Networks (press release), July 10, 2007.
77 Local-into-local refers to the retransmission of local broadcast television stations into the local markets they serve
by satellite operators.
Federal Communications Commission
FCC 07-207("SHVIA"), DBS operators provide local-into-local broadcast television service.78 We request
information on the number of markets where local-into-local television service is offered, or will be
offered in the near future, including the number and affiliation of the stations carried. What percentage of
DBS subscribers are opting for local programming packages in markets where they are available? What
is the cost to consumers of local-into-local broadcast service? What percentage of DBS subscribers also
subscribe to cable in order to receive local broadcast signals? Both DIRECTV and EchoStar have
launched local broadcast stations in HD in a number of markets. How many markets receive local high
definition programming? We seek information on the type of equipment necessary for DBS subscribers
to receive local HD broadcasts and the cost of the service and equipment. What are the local broadcast
stations being carried in HD and what are the affiliations of these stations? How many subscribers have
the equipment necessary to receive high definition local broadcasts?
46. On December 8, 2004, the Satellite Home Viewer Extension and Reauthorization Act of 2004
("SHVERA") was enacted.79 SHVERA extended certain provisions of the SHVIA, primarily pertaining
to distant signal copyright licensing and retransmission consent negotiations.80 The statute also added
some new provisions to the Communications and Copyright Acts concerning retransmission by DBS of
distant or out-of-market broadcast signals, including the option to carry broadcast stations deemed
"significantly viewed" by the Commission. Throughout 2005, the Commission implemented the
provisions of the SHVERA.81 We request comment on the impact, if any, these provisions have had on
the MVPD marketplace. With respect to the new authorization to market broadcast station signals
deemed "significantly viewed," to what extent are such signals being made available to subscribers? If
such signals are not being marketed, is the situation due to technical or operational consideration,
problems with obtaining retransmission consents, or other reasons?
47. Prices, Equipment, and Programming: We request data on prices for DBS programming
packages and equipment. What is the typical cost of DBS equipment and installation? Do more
78 SHVIA was enacted as Title I of the "Intellectual Property and Communications Omnibus Reform Act of 1999"
(IPACORA) (relating to copyright licensing and carriage of broadcast signals by satellite carriers, codified in
various sections of 17 and 47 U.S.C.), Pub. L. No. 106-113, 113 Stat. 1501, Appendix (1999).
79 Pub. L. No. 108-447, 118 Stat 2809 (2004) (codified in various sections of 17 and 47 U.S.C.). SHVERA was
enacted as Title IX of the Consolidated Appropriations Act, 2005.
80 In 2006, a district court in Florida issued a nationwide permanent injunction barring EchoStar from providing any
distant network programming pursuant to the statutory copyright license. See CBS v. EchoStar, 472 F. Supp. 2d
1367 (S.D. Fla. Oct. 20, 2006).
81 See Implementation of Section 207 of the Satellite Home Viewer Extension and Reauthorization Act of 2004,
Reciprocal Bargaining Obligation, 20 FCC Rcd 10339 (2005); Implementation of the Satellite Home Viewer
Extension and Reauthorization Act of 2004 to Amend Section 338 of the Communications Act, 20 FCC Rcd 14242
(2005); Implementation of the Satellite Home Viewer Extension and Reauthorization Act of 2004, Implementation of
Section 340 of the Communications Act, 20 FCC Rcd 17278 (2005). See also, Retransmission Consent and
Exclusivity Rules: Report to Congress Pursuant to Section 208 of the Satellite Home Viewer Extension and
Reauthorization Act of 2004, Sept. 8, 2005, available at http://www.Fcc.gov/mb/policy/shvera.html (reporting to
Congress on the impact on competition in the MVPD market of the current retransmission consent provisions and
the network nonduplication, syndicated exclusivity, and sports blackout rules, including the effect of those rules on
the ability of rural cable operators to compete with the DBS industry in the provision of digital broadcast television
signals to consumers); Report to Congress, The Satellite Home Viewer Extension and Reauthorization Act of 2004,
Study of Digital Television Field Strength Standards and Testing Procedures, 20 FCC Rcd 19504 (2005)
(concerning the digital signal strength standard and the signal testing procedures used to identify whether a
household is "unserved" for purposes of the satellite statutory copyright license for distant digital signals).
Federal Communications Commission
FCC 07-207customers lease equipment or buy it? Do DBS operators offer service contracts that provide discounted
prices for programming and equipment? We request information regarding DBS operator equipment
leasing program options, including the monthly rates charged for leasing equipment. How do DBS
leasing prices for equipment compare to those for cable equipment? To what extent, and through what
specific market mechanisms, do satellite operators discount or "subsidize" equipment costs in order to
attract subscribers? We also ask commenters to provide information on the number of channels and the
monthly prices of various DBS programming packages. Do DBS operators offer any programming on an
a la carte basis, and if so, what are the prices and subscription requirements associated with such
offerings? To what extent do DBS operators have access to, and carry, cable-operator-affiliated regional
programming services? With respect to foreign language or foreign-originated programming, how many
subscribers choose foreign programming alone and how many purchase additional programming? Are
these subscribers required to pay for equipment in advance? What additional charges, if any, are required
to obtain foreign programming?
48. C-Band or Large Dish: We seek information about programming that remains available to
C-Band subscribers. How many program packagers offer programming to C-Band households? How do
C-Band providers package and price program services? How much C-Band programming is available on
an a la carte basis, and to what extent are consumers purchasing programming in this way? How much
free and unscrambled programming remains for C-Band users to access? We also seek information on the
number of satellite delivered networks that are no longer distributed on C-Band satellites, and the number
of satellite delivered networks that no longer provide an analog feed of their programming.
Other Wireline Service Providers1.
Local Exchange Carriers49. Several major incumbent LECs ("ILECs") AT&T,82 Qwest, and Verizon have launched
joint service with DBS service providers, and several have reported plans to provide video via asymmetric
digital subscriber line ("ADSL"), very high-speed digital subscriber line ("VDSL"), fiber to the node
("FTTN"), or fiber to the premises ("FTTP").83
50. We seek information generally regarding LECs that provide video programming services. To
what extent are LECs operating as video distributors in competition with existing cable systems? Do
LECs face special hurdles to providing video service? Are there any regulatory or statutory impediments
to LEC entry into the video service market? To what extent are LECs offering cable services? Do LECs
that offer cable services face special hurdles to providing video service? What is the current extent of
deployment by LECs, including in particular fiber networks that have the capacity to provide residential
video service but are not yet provisioned or franchised to provide that type of service? What are LECs'
future deployments plans? Are there specific residential areas that LECs target for video entry? Do these
deployments match the clustering of cable operators' systems or do they conform to some other
82 We note that the former BellSouth and SBC companies have merged with AT&T. See AT&T Inc. and BellSouth
Corporation Applications for Transfer of Control, 22 FCC Rcd 5662 (2007).
83 Fiber to the node (also known as fiber to the neighborhood) is a hybrid network architecture involving optical
fiber from the carrier network, terminating in a neighborhood node (a point of interconnection on the fiber
transmission line), which converts the signal from optical to electrical. The connection from the cabinet to the user
premises is provided over unshielded twisted pair ("UTP") or coaxial cable. While fiber to the premises, sometimes
called fiber to the home ("FTTH"), is preferable in terms of overall performance, it is more expensive to deploy than
fiber to the node. See Harry Newton, NEWTON'S TELECOM DICTIONARY (CMP Books, 22nd ed., 2006), at 387, 410.
See also Althos On-Line Telecommunications Dictionary, at
http://www.voipdictionary.com/aw_definitions_main.asp (visited May 30, 2007).
Federal Communications Commission
FCC 07-207operational or market-based considerations? To what extent does the existing telephone plant of these
service providers determine the scope and coverage of their video distribution activities? What are the
major determinants of where this type of market entry takes place? Is an entry decision based on the
existing state of competition in the market, or lack thereof, such as inadequate existing service? Are
LECs entering markets based on a desire to respond to competition with their core telephony business?
To what extent do demographic considerations associated with potential subscribers inform LEC entry
into a market? What role do technical considerations of existing LEC networks play? Are state or local
regulatory issues a factor as to whether LECs choose to enter a market or not? To what extent are
investments in plant that are useful for multiple purposes influenced by state public service commission
price cap decisions or other mandates and policies?
51. How do LEC video services compare to those available from incumbent cable or satellite
operators? To what extent will they offer more bandwidth capacity than other MVPD architectures? Will
such increased capacity permit greater provision of high definition television ("HDTV") and advanced
interactive services? Have incumbent MVPDs impeded LECs' efforts to provide consumers with video
choices? Has there been any notable churn from cable or DBS to LECs' video services in the markets
where it is available? Is there evidence of price competition between LECs, cable, and satellite operators?
The major ILECs have marketing agreements with DBS providers under which they sell the DBS
operator's video services along with their telephony and DSL-based high speed Internet access service in
a single package. What effect have these agreements had on LEC entry into the video industry,
specifically on LECs' ability to compete with incumbent cable operators? As wireline facilities are built
out, will these marketing agreements limit DBS-wireline service competition?
52. A number of smaller ILECs also are reportedly constructing their own all-fiber or mostly
fiber networks to deliver video and advanced services to their existing voice and data customers. We seek
comment on these deployments, including penetration rates and business models. Do technological,
economic, or market entry issues facing smaller and rural ILECs differ from those facing the larger
carriers? Are there any unique barriers to entry into smaller and rural video markets?
Broadband Service Providers53. We define BSPs (broadband service providers) as newer firms that are building state-of-the-
art facilities-based networks to provide voice, video, and data services over a single network. Most BSPs
are overbuilders competing directly with existing cable operators.84 We include municipal entities,
independent telephone companies, and competitive LECs ("CLECs") as BSPs, to the extent they operate
technologically advanced networks capable of providing bundles of services (i.e., voice, advanced video,
and data services).85 We request information regarding the provision of video, voice, and data services by
BSPs, including municipal authorities, independent entities and CLECs, as well as any entity that
provides broadband services. Are video programming services offered in combination with telephone and
high-speed Internet access services and, if so, how are rates affected by the packaging of multiple
services? How many, or what percentage of, BSP subscribers purchase video service alone, video and
telephony, video and high-speed Internet access services, or all three services? What effect do BSPs have
on video competition? We request comment on the reasons why this percentage is so low. We seek
comment on the characteristics that facilitate BSP competitiveness (e.g., number of subscribers, homes
passed, geographical reach, demographics, and business models). Have BSPs become more competitive
84 The term "BSP" is not intended to imply anything with respect to Commission policy or proceedings that might
involve broadband services. Usually, the services of a BSP can be purchased separately as well as in a bundle. Id.;
see also 2002 Report, 17 FCC Rcd at 26948-52 102-11.
85 2003 Report, 19 FCC Rcd at 1658-59 78. See also 2004 Report, 20 FCC Rcd at 2801 70.
Federal Communications Commission
FCC 07-207in recent years? Are there still significant barriers to entry? What are the technical and economic factors
that determine whether overbuild systems are successful?
Open Video System Operators54. In 1996, Congress established the open video system ("OVS") framework, one of four
statutorily recognized options for the provision of video programming services by LECs.86 To what
extent are new wireline entrants operating under the OVS classification? How many subscribers receive
video services from OVS operators? Are video programming services offered in combination with
telephone and high-speed Internet access services and, if so, how are rates affected by the packaging of
multiple services? How many, or what percentage of OVS subscribers, purchase video service alone,
video and telephony, video and high-speed Internet access services, or all three services? What effect do
OVS operators have on video competition? We seek information on why new entrants that have chosen
the OVS classification have opted for this type of entry. We also seek information on MVPD entrants
that initially chose OVS classification, but have since converted to another framework (e.g., Title VI
cable service and vice versa). What impact do state and local franchising requirements have on the OVS
framework and on a new entrant's decision to choose the OVS classification? To what extent are service
providers seeking to share OVS operators' capacity?
Electric and Gas Utilities55. Some electric and gas utilities continue to move forward with ventures involving
multichannel video programming distribution, though such services still are not widespread.87 We seek
information regarding utility companies that provide video services or plan to deploy them. To what
extent are video programming services being bundled with telephone, high-speed Internet access, or other
services? How does the ability to offer bundled services affect the relative competitive position of these
utilities? Are utilities' service prices similar to cable operators' pricing of such services? If not, how do
Broadcast Television Service56. Broadcast networks and local stations supply video programming directly over the air to
consumers. Consumers who do not subscribe to an MVPD service typically rely on over-the-air
transmission of local broadcast television signals. Other households receive broadcast television
programming over the air on those television receivers that they have chosen not to connect to an MVPD
service. In addition, many consumers receive broadcast signals via their cable, DBS, or other MVPD
57. General Performance: We seek data and comment on the role of broadcast television in the
market for the delivery of video programming. Broadcast television stations' ability to compete with
MVPDs is dependent on their ability to attract audience and advertising dollars to their programming.
We seek data on broadcast network and station audience shares relative to those of nonbroadcast
programming services. We also request data on broadcast advertising revenue. To what extent has cable
gained local, regional, or national advertising market share from broadcast television? What forms of
compensation are broadcasters receiving for retransmission consent? In terms of additional sources of
revenue, to what extent are cable and DBS operators paying cash compensation for retransmission of
86 47 U.S.C. 571(a)(3)-(4); 1996 Report, 12 FCC Rcd at 4395-98 68-71.
87 See, e.g., Dinesh Kumar, Analysts Tie BPL Growth in 2007 to Tex. Project's Fate, COMM. DAILY, Jan. 22, 2007,
Federal Communications Commission
FCC 07-207broadcast stations?88 If the compensation is not cash based, how is it accounted for? What market
changes, if any, are taking place that might result in increases in retransmission consent compensation?
58. According to Nielsen Media Services, approximately 14 percent of U.S. households rely on
over-the-air broadcasting to receive television.89 In addition, many households that subscribe to an
MVPD also rely on over-the-air signals to receive broadcast programming on some of their television
sets.90 We request data on the number or percentage of households relying solely on over-the-air
broadcast television for programming. We also seek information on the number of MVPD households,
by type of MVPD service, that rely on over-the-air reception for local broadcast service on one or more of
their television sets not connected to an MVPD. We ask commenters to provide demographic information
that might assist us in classifying such households (e.g., urban vs. rural, income, education levels, age).
59. Digital Television Broadcasting ("DTV"): DTV allows broadcasters to use a single 6 MHz
channel to transmit a high definition television ("HDTV") signal, several standard definition television
("SDTV") signals (i.e., multicasting), or ancillary services in addition to video programming.91 In early
2006, the Digital Television Transition and Public Safety Act of 2005 established a deadline of February
17, 2009, for the end of analog transmissions and the transition to digital television. The Act allocates
approximately $990 million of the estimated $10 billion in proceeds from the auction of the vacated
analog broadcast spectrum for a digital-to-analog converter box program.92 For the 2007 Report, we
request updated information on the transition to digital television service, including current and projected
levels of consumer access to and use of DTV; the amount and types of digital television programming,
both broadcast and non-broadcast offered; the other uses of digital broadcast spectrum; and developments
regarding DTV equipment. We also seek comment on the effect of DTV deployment on competition in
the video marketplace. Commenters should address whether the growth of DTV broadcasting is making
broadcast television a substitute for, or competitor of, MVPDs.
60. Consumer Access to Digital Television: We request information on the number of
households that are able to receive DTV/HDTV programming either over the air or from an MVPD. We
seek current data on the number of households that rely on over-the-air reception of broadcast television.
We also seek data on the number of, or percentage of, households that rely solely on over-the-air
reception of broadcast signals that have digital televisions, including the number that have built-in or
separate DTV tuner capability. In addition, we request specific information and data that will provide an
estimate of, or allow the Commission to estimate, the number of households that will need digital to
analog converter boxes as of February 17, 2009, because they rely on over-the-air broadcast television
88 See, e.g., Peter Grant, Broadcasters Want Cash from Cable Companies for Signal, THE WALL STREET JOURNAL,
Feb. 5, 2007.
89 Nielsen Media Service data for the 2006-2007 television season. Nielsen Media Research annually reports
television household estimates each September based on information from a variety of sources, including Claritas (a
leading provider of demographic data), the U.S. Census Bureau, and Nielsen's own television samples. See also
Media Bureau Staff Report Concerning Over-the-Air Broadcast Television Viewers Media Bureau, Feb. 28, 2005
("OTA Report"), MB Docket No. 04-210, available at http://fjallfoss.fcc.gov/edocs_public/attachmatch/DOC-
90 See OTA Report at 4-5.
91 Review of the FCC's Rules and Policies Affecting the Conversion to Digital Television, 17 FCC Rcd 15978,
15995-96 39-40 (2002).
92 The National Telecommunications Information Administration ("NTIA") has announced the final rule for the
digital-to-analog converter box coupon program. See NTIA, Rules to Implement and Administer a Coupon Program
for Digital-to-Analog Converter Boxes, 72 Fed. Reg. 12097 (Mar. 15, 2007); 47 C.F.R. Part 301.
Federal Communications Commission
FCC 07-207reception and do not have televisions with digital tuners. How many MVPD subscribers are DTV
households, and how many of these households choose to receive broadcast DTV signals over the air?
61. We seek information on the availability of over-the-air DTV service to viewers. What
portion of the population has access to over-the-air DTV service? What is the difference in terms of
population coverage between the full authorized coverage area and the coverage area based on the actual
facilities of DTV stations that are now operating? What reception difficulties, if any, do viewers that are
within the service areas of DTV stations experience, and have there been any advances to address
reception performance? Are there unique reception issues that differentiate DTV service from analog
service in terms of either better or worse over-the-air reception?
62. Currently, carriage of broadcast DTV signals by cable and satellite systems is generally
voluntary.93 We request information regarding the carriage of DTV programming by MVPDs and plans
to increase the amount of DTV programming carried. How many MVPD subscribers are served by
systems that carry DTV programming, and how many households are subscribing to such services when
offered as separate packages? How much broadcast DTV, either SDTV or HDTV formats, are cable and
other MVPDs offering to consumers? How many MVPD systems are carrying all local broadcast stations
that are offering DTV programming? How many subscribers have access to DTV programming? Of
these systems, how many are carrying all of the free over-the-air programming offered by the stations?
We also request comment on carriage agreements between MVPDs and broadcasters. We ask specifically
how many noncommercial educational broadcast stations are being carried, and under what terms? To the
extent that MVPDs are not offering broadcast HDTV, why are they not doing so? How much non-
broadcast HDTV programming is being carried by MVPDs? How many cable operators are carrying
multicast DTV or would be willing to do so when broadcasters transmit multiple streams of
programming? Where cable operators are carrying multicast DTV, are they carrying all programming
streams offered by the broadcaster? To what extent do they decline to carry multicast streams, such as
those focusing on local news, that compete with existing or planned cable programming offerings? To
what extent do DBS providers and other MVPDs carry broadcast DTV programming? Do noncable
MVPDs carry multicast DTV or plan to carry multiple streams of broadcast DTV programming?
63. We seek information on how MVPDs package and price broadcast and non-broadcast DTV
programming. Do MVPDs offer separate packages for broadcast and non-broadcast DTV programming?
Do cable subscribers need to purchase the "digital tier"94 of service in order to receive any DTV content?
What additional equipment, if any, do consumers need to receive MVPDs' DTV signal? What impact
will the digital transition have on competition if cable has the capacity to provide broadcast HD
programming, but DBS operators do not?
64. We request information regarding the amount and type of DTV programming (i.e., network,
local, syndicated) currently offered by broadcasters and information on broadcasters' plans to increase the
amount of DTV programming. To what extent are broadcasters using their DTV spectrum for SDTV,
HDTV, and multicasting? How much programming is offered in each format, overall and in prime time?
We seek this programming information for both broadcast networks and local stations (i.e., network
affiliated, independent stations, commercial, noncommercial). To what extent are stations locally
93 See generally Carriage of Digital Television Broadcast Signals: Amendments to Part 76 of the FCC's Rules, 20
FCC Rcd 4516 (2005).
94 "Digital tier" does not refer to content viewed in digital format; rather, it refers to the tier of programming that is
digitally compressed for transmission purposes only in order to offer cable subscribers additional content options.
The digital compression process starts with video in analog format, compresses the signal using digital technology,
and then the signal is converted back into analog format for viewing.
Federal Communications Commission
FCC 07-207producing DTV or HDTV programming? To what extent are stations offered network HDTV
programming that they are either not equipped to pass through and broadcast or do not broadcast for other
reasons? How are noncommercial educational broadcasters, including PBS affiliates, using the DTV
spectrum? Are there differences in the ways that commercial and noncommercial broadcasters are using
their DTV spectrum?
65. Consumer DTV Education Efforts: In July 2007, the Commission adopted a Notice of
Proposed Rulemaking seeking comment on several proposals related to consumer education about the
digital television transition.95 We continue to monitor industry efforts to educate consumers about the
digital transition. We seek information about the efforts of various industry segments, including
broadcasters, MVPDs, other video programmers, retailers, and manufacturers, to educate consumers
about DTV services and equipment. Have these programs resulted in higher consumer familiarity with
DTV in general and HDTV specifically? We seek data regarding consumers' awareness of the DTV
transition, including consumer survey results. Do consumers rely on information from the government,
consumer electronics retailers, news programming, broadcasters, other video program distributors and
producers, or others? What type of education effort is currently going on in retail stores? Are retailers
complying with the Commission's recent Order regarding retail labeling of analog-only sets and, if so,
what effect is that labeling having?96 How successful have retailers' education efforts been? Do these
efforts correlate to increased DTV equipment sales? How are broadcasters and MVPDs advertising or
promoting DTV/HDTV beyond the text indicating that a program is being simulcast in HDTV? To what
extent is broadcast advertising time being used to promote DTV/HDTV? How much advertising of
DTV/HDTV is there on programming carried by cable operators or other MVPDs? Do newspaper or
other television guide listings indicate when programming is available in HDTV format?
66. Multicasting and Datacasting: Multicasting is the process by which multiple streams of
digital television programming are transmitted at the same time over a single 6 MHz broadcast channel.
We seek information on the types of services and content that broadcasters are transmitting using
multicasting. In addition, we seek information on whether multicasting is limited to large markets, or if
stations in small- and medium-sized markets are multicasting. How much multicast programming is
locally produced or locally focused? To what extent is the provision of multicast service dependent upon
its carriage by cable and other MVPD operators? In how many markets are cable operators and other
MVPDs carrying broadcasters' multicast programming, and which markets are they?
67. Advanced Broadcasting Technologies: In the Second DTV Periodic Report and Order, the
Commission approved, in principle, the use of distributed transmission systems for digital television
("DTS").97 DTS operation is similar to analog TV booster stations, a secondary, low-power service using
the parent station's channel to "fill in" gaps in its coverage area, but DTS technology may enable this type
of operation more efficiently than analog TV boosters.98 We seek comment on the extent to which DTS is
currently in use as well as future plans to deploy DTS. We further seek comment on activities by
broadcasters to improve their service and offerings through the use of Enhanced VSB ("E-VSB") and/or
95 See DTV Consumer Education Initiative, 22 FCC Rcd 15933 (2007).
96 Second Periodic Review of the Commission's Rules and Policies Affecting the Conversion to Digital Television,
22 FCC Rcd 8766 (2007).
97 Second Periodic Review of the Commission's Rules and Policies Affecting the Conversion to Digital Television,
19 FCC Rcd 18279, 18283, 18355-57 9, 174-78 (2004) ("Second DTV Periodic Report and Order").
98 The Commission's Spectrum Policy Task Force recommended that DTV broadcasters be permitted to operate
distributed transmission systems within their present service areas. See Spectrum Policy Task Force Report, ET
Docket No. 02-135 (Nov. 2002), available at http://www.fcc.gov/sptf/reports.html.
Federal Communications Commission
FCC 07-207Advanced VSB ("A-VSB"). To what extent are broadcasters currently deploying, planning to deploy, or
considering A-VSB and E-VSB, and of which additional features of A-VSB and E-VSB do broadcasters
intend to take advantage?
68. DTV also allows broadcasters to use part of their digital bandwidth for subscription
multichannel video programming services and datacasting. These services can be provided
simultaneously with HD or SD digital programming and can provide delivery of virtually any type of
data, audio, or video, including text, graphics, software, web pages, video-on-demand,99 and niche
programming. What types of services are being offered? How many TV households subscribe to these
services, what markets have access to these services, and what is their expected growth over the next
several years? We further request information on how broadcasters are using datacasting to deliver
services and content to viewers. What kinds of revenues are being obtained from the offering of these
non-broadcast services? How many TV households subscribe to these services, and what is their
expected growth over the next several years?
69. DTV Equipment: To receive DTV/HDTV programming over the air, a consumer must have
an antenna capable of picking up the broadcast signal and a digital television receiver that includes a DTV
tuner, or a separate set-top box containing a DTV tuner. In addition, a consumer also can have an analog
television set with a digital set-top box that converts digital broadcast signals to analog signals.
70. We seek updated information on the adoption of the equipment needed to receive digital
programming, either over the air or from an MVPD. Specifically, we request information on the total
number of digital television displays, including HD-ready and Enhanced Definition ("ED")-ready
monitors, that have been shipped to retailers and how many have been sold to consumers. What is the
average price of DTV sets in each available size? How many of these digital television sets, both shipped
and sold, include over-the-air DTV tuners? How many set-top, over-the-air DTV tuners have
manufacturers shipped to retailers, and how many of these tuners have retailers sold to consumers? How
many DBS receivers contain over-the-air DTV reception capabilities? How many cable set-top boxes
include this capability? Tuner cards meeting the Advanced Television System Committee ("ATSC")
DTV standards may be used in personal computers to view programming on a desktop computer monitor.
How many of these cards have been sold? For each of these types of DTV receivers, what is the
generation of the underlying chipset, and has the availability of new generations of receivers affected the
competitiveness of the incorporating products?
71. We also seek information on the development and availability of digital-to-analog converters
that will allow digital TV broadcasts to be converted to analog for viewing on analog TV sets. NTIA
announced in March 2007 the final rule for the digital-to-analog converter box coupon program.
Manufacturers of converter boxes that can be purchased with coupons must build devices that include
specific features and meet certain performance specifications identified in the final rule.100 We seek an
update on the development of such converter boxes.
Wireless Cable Systems72. Wireless cable systems use the Broadband Radio Service ("BRS") and the Educational
Broadband Service ("EBS") in the 2 GHz band to transmit video programming and provide broadband
99 Video-on-demand via over-the-air broadcast signals may be provided several ways. It may use a model similar to
that contemplated by DBS where VOD programming is broadcast and then stored in a local DVR. With the addition
of an Internet connection, it is also possible to provide true VOD by using broadcast for the downstream
transmission of video and an Internet connection for the comparatively low bandwidth control signals.
100 See note 92 supra.
Federal Communications Commission
FCC 07-207services to residential subscribers.101 These services were originally designed for the delivery of
multichannel video programming, similar to that of traditional cable systems, but over the past several
years licensees have refocused their operations on providing two-way high-speed Internet access services.
Thus, wireless cable operators offer limited video distribution competition to incumbent cable operators.
We seek information on existing wireless cable systems and the video and non-video services they offer.
What factors have led wireless cable operators to move away from offering video services? Have issues
concerning access to programming, bandwidth considerations, local regulatory considerations, or bundled
service offerings affected these decisions? Have licensees in these services moved away from their
original orientation as "wireless cable" providers such that they no longer should be tracked in the
Report? Are licensees in these services now more likely to compete with major commercial mobile radio
system providers in offering mobile video?
Private Cable Operators73. Private cable operators, also known as satellite master antenna television ("SMATV")
operators, continue to serve a small number of MVPD subscribers, either through their own facilities or
through partnership arrangements with DBS operators DIRECTV and EchoStar. We request information
on the types of services offered by PCOs. We request information on the number of PCOs in the United
States, the geographic areas they serve, the identification and size of PCO companies, and the type of
facilities they serve (e.g., hotels, apartment buildings, mobile home parks). We also seek information on
the business strategies they are pursuing to compete with larger MVPDs. How do the programming
packages offered and the prices of such packages compare to those of incumbent cable operators? How
often do PCOs provide service pursuant to exclusive agreements as opposed to facing competition in the
buildings or developments they serve? To what extent are PCOs offering video services through
agreements with other MVPDs, such as cable, LEC, and DBS systems, rather than providing their own
services? In 2002, the Commission made PCOs eligible for CARS licenses.102 We seek comment on
whether PCOs are using CARS licenses to provide additional competition to incumbent cable operators.
Commercial Mobile Radio Service Providers and Other Wireless Providers74. Major commercial mobile service providers and other wireless providers have begun offering
video services to users of cell phones and other mobile services. We request updated information on the
availability and deployment of mobile video services, including information on programming agreements
between video programming networks and other content providers and cell phone companies.
Specifically, how many mobile telephone users have access to, and subscribe to, such services? What
equipment is needed to receive video over cellular systems, and what is the cost of equipment and
service? In which markets is service available? We also are interested in any studies or surveys that
explore the use of mobile video services as a complement to, or a substitute for, traditional video
services.103 Do current trends in mobile video suggest that we should consider mobile telephone
providers that offer video programming to be MVPDs?
101 The BRS and EBS services include the former multipoint distribution service ("MDS") and instructional
television fixed service ("ITFS"). Their designations and service rules were changed in 2004. See Amendment of
Parts 1, 21, 73, and 74 of the FCC's Rules to Facilitate the Provision of Fixed and Mobile Broadband Access,
Educational and Other Advanced Services in the 2150-2162 and 2500-2690 MHz Bands, 19 FCC Rcd 14165 (2004).
102 Amendment of Eligibility Requirements in Part 78 Regarding 12 GHz Cable Television Relay Service, 17 FCC
Rcd 9930 (2002).
103 See, e.g., Michal Lev-Ram, Coming Soon to Your Cell:Live TV, BUSINESS 2.0 MAGAZINE, Apr. 18, 2007.
Federal Communications Commission
FCC 07-20775. We seek information on video distribution from other wireless devices that are not CMRS
providers and on the viewing equipment, including iPods and personal digital assistants ("PDAs"), used
to receive such programming. We seek information on the manner in which video content is delivered to
these devices (e.g., broadcast vs. Internet downloading). We seek information on how programmers are
re-purposing traditional broadcast and non-broadcast programming for viewing on these devices, and if
programmers are creating content specifically for these new devices.
76. We also request comment on alternative wireless distribution methods and technologies and
the extent to which providers have adopted or are considering adopting them. Standards groups have
developed WiMAX to create a last-mile solution for delivery of video, voice, and data.104 We seek
comment on the extent to which these technologies are used to provide services that compete with those
offered by traditional video providers, as well as information on the deployment of municipal Wi-Fi
Web-Based Internet Video77. The amount of web-based video available over the Internet continues to increase significantly
each year. Many traditional broadcast and nonbroadcast programmers, as well as many independent
content producers, currently provide streaming and downloadable video content on their Internet web
pages. We seek statistics on the use of the Internet for access to video content.
78. Major Internet portals, such as Google, Yahoo, and AOL, offer user-posted content but are
increasingly entering into licensing agreements to offer pre-existing and original video content from
traditional video providers.105 Other online video providers, including Wi-FiTV, BrightCove, Virtual
Digital Cable ("VDC"), and LX.TV Lifestyle Television,106 mostly provide prepackaged programming
offered as "channels" of video to monthly subscribers, and other services, such as CinemaNow and
Movielink, continue to offer downloadable video through their web sites. In addition, traditional
broadcast and nonbroadcast networks continue to experiment with alternate programming content options
on their own web sites. We request information on the types of video services offered over the Internet in
both real time and downloadable formats, and request comment on the quality of web-based video relative
to traditional video program distribution. We also ask commenters to provide projections of whether
web-based video will become a viable competitor in the marketplace for the delivery of video
programming and, if so, when such competition is likely to emerge. Further, we seek information on the
extent to which Internet video distribution also has become a means by which some new programming
networks are developing audience interest in their programming absent agreements with one of the major
MVPDs for distribution of their programming over cable or DBS.
104 WiMAX ("World Interoperability for Microwave Access") is based on the IEEE 802.16 standard and offers
higher speeds and greater distances than IEEE 802.11 based Wi-Fi. WiMAX is being developed as a solution to
providing Metropolitan Area Networks ("MANs"). See, e.g. Intel Corporation, What is WiMAX, at
http://www.intel.com/netcomms/technologies/wimax/index.htm (visited March 27, 2007), The IEEE 802.16
Working Group on Broadband Wireless Access Standards at http://www.ieee802.org/16/ (visited March 27, 2007),
WiMAX Forum at http://www.wimaxforum.org/home/ (visited March 27, 2007).
105 See, e.g., Kris Oser Video in Demand, ADVERTISING AGE (MIDWEST REGION ADDITION), April 4, 2005, at S1-S6.
106 See Wi-FiTV, Inc., Wi-Fi TV Corporate, at http://www.wi-fitv.com/Corporate.php; Brightcove.com, Corporate,
at http://corp.brightcove.com/; VDC Corporation, at http://www.vdc.com; LX.TV, at http://code.tv and
Federal Communications Commission
FCC 07-20779. Many MVPDs offer advanced services to subscribers. For example, in addition to video
services, cable operators are using their cable plant to offer subscribers cable modem service (i.e., Internet
access and other data services), and voice services. MVPDs are offering some of these advanced services
on a stand-alone basis, but more often, they are combining them with video packages to offer a bundle of
services to their subscribers. Advanced services comprise an increasing percentage of total revenue for
80. We seek information on advanced service offerings by cable operators, DBS operators, and
other wireline and wireless MVPDs. We seek information on video-on-demand, digital video recorders,
high-speed Internet service, telephony, and HDTV. We request information on the advanced service
offerings of small and mid-sized cable systems and LECs, as well as the largest MSOs and DBS
operators. We request that commenters provide subscribership statistics and information for each type of
service, the subscription cost of each service, and the equipment necessary to receive each type of service.
We also request information on how MVPDs bundle services and on how the ability to bundle services
Video-on-Demand: We seek information on MVPDs that currently provide, or plan to
provide, video-on-demand. VOD allows subscribers to order video programming from a
central server at any time of day, and to fast-forward, rewind, and pause the programming.
What types of VOD programming are available? Do the offerings constitute "reruns" of
generally available programming? To what extent are movies distributed through VOD
services? Are there types of programming produced especially for VOD, and, if so, what
percentage of VOD content do these programs represent? How much VOD content is local?
To what extent is VOD programming available on a subscription basis as opposed to a per-
program basis? What types of services are MVPDs offering in this manner and how much do
they cost? What percentage of VOD content is offered without charge? What percentage of
subscribers access VOD content? What percentage of VOD content is exclusive to any one
video distributor? Are MVPDs selling their original VOD programming to others? Have
MVPDs foreclosed competitors' attempts to obtain VOD programming due to exclusive
distribution contracts for that programming? Typically, how much capacity is dedicated to
delivering VOD services?
Digital Video Recorders ("DVRs"): DVR service allows subscribers to record programs onto
a hard drive located in a set-top box, which can then be played back at any time. DVR
features include fast-forward, rewind, and the ability to pause live television. We seek
information on MVPDs that currently provide or plan to provide DVR service. What
percentage of subscribers has access to operator-supplied DVRs, and what percentage of
those subscribers opts for the service? What percentage of television households use a DVR
not supplied by an MVPD? We seek information on the types of DVR offered, including
single tuner or dual tuner set-top boxes, and the storage capacity of the devices. With respect
to cable operators, is the service offered in conjunction with digital service or is there a fee in
addition to digital service? With respect to DBS, what developments have occurred to enable
DBS providers to offer VOD type functionality using DVRs? What percentage of the DVR
set-top boxes are leased as opposed to purchased by the subscriber? Are the boxes branded
by the MVPD or by a third party? What relationships do MVPDs have with third-party
developers of stand-alone DVR equipment, such as TiVo? How do strategic and co-
marketing relationships between MVPDs and DVR manufacturers affect competition in the
video programming market? To what extent will consumer uptake of DVRs affect consumer
Federal Communications Commission
FCC 07-207demand for VOD? Lastly, we seek information on MVPDs' plans to offer a network-based
or centralized DVR-like service.107
High-speed Internet Access: According to the Commission's 2005 Cable Price Survey
Report, 96 percent of MVPD subscribers were offered Internet access service and 31 percent
of subscribers actually purchased the service.108 We seek updated information about high-
speed Internet access offered by MVPDs. What percentage of subscribers to an MVPD's
video programming service also subscribe to the provider's Internet access service? What
percentage of Internet access service subscribers are not video subscribers? We seek
information on how the service is priced, whether there are different prices for different
speeds, and whether subscribers receive pricing discounts if they subscribe to both video
services and broadband Internet access service. Are MVPDs that offer Internet access service
giving subscribers a choice of Internet service providers? Has any MVPD offering high-
speed Internet service blocked access to certain kinds of Internet content or applications and,
if so, what kind? Are MVPDs transitioning to DOCSIS 3.0 to offer increased bandwidth to
subscribers? With respect to DBS, we seek information on the status of current and future
plans regarding both satellite-delivered high-speed Internet access with a telephone return
path as well as two-way satellite delivered high-speed Internet access services offered by
fixed satellite systems ("FSS"), DTH, and DBS providers. How many consumers subscribe
to each type of service and how much do the services cost? We seek comment on the extent
to which DBS providers are offering packages in conjunction with other companies, such as
co-marketing arrangements with LECs.
Voice over Internet Protocol ("VoIP"): Many cable operators appear to be adopting VoIP as
the platform for their voice offerings, although some continue to provide traditional telephone
service using circuit switched technology. We seek information on the latest development
and deployment of VoIP; the manner in which VoIP service is being marketed to subscribers
(e.g., as part of bundled services); and whether discounts are offered to subscribers who
subscribe to a package containing VoIP and other advanced services along with video
service. In how many markets do MVPDs provide switched circuit telephony, and where are
they? To what extent are MVPDs phasing out switched circuit telephony? To what extent do
cable operators offer telephony service for low-income households, similar to basic dialtone
service or so-called plain old telephone service ("POTS")? We also seek information on the
extent to which these cable telephony services include 911 or E-911 service and battery back-
Technical Issues81. Technological developments have important consequences for the state of video competition.
We will report on regulatory and market developments in this area and how they may affect the manner
and state of competition. We seek comment and data on a range of developments related to consumer
equipment, navigation devices, the Open Cable Application Platform ("OCAP"), PacketCable,
CableCARDs, the Commission's integration ban separating security from non-security functions in
107 Cablevision's introduction of a remote DVR service that provides subscribers with full DVR functionality
without the need for a set-top box in their homes has been slowed by a recent court decision that requires
Cablevision to obtain licenses from the programmers whose services it carries. See Twentieth Century Fox Film
Corp. v. Cablevision Systems Corp., 478 F. Supp. 2d 607 (S.D.N.Y. 2007).
108 2005 Price Survey, 21 FCC Rcd at 15100, Tables 10 and 11.
Federal Communications Commission
FCC 07-207system access devices, digital rights management, advances in digital broadcasting, technical standards,
home networking, and content mobility.
82. Consumer Equipment: We seek comment on the availability and compatibility of customer
premises equipment used to provide video programming and other services. We request information on
the number of households that currently have analog television sets and the number of those television
sets that are connected to an external set-top box that allows for the provision of various MVPD services.
We request information on the number of these set-top boxes that only provide analog services and the
number that provide different types of digital service, i.e., those that decode and display high definition
signals, those that decode high definition signals but display all signals only in standard definition digital
or analog formats, and those that display and decode only standard definition signals. In addition, we are
interested in how many digital set-top boxes are capable of tuning and delivering analog cable channels to
attached televisions. Similarly, we request information on the number of households that have digital
television sets and the number of those sets that are connected to set-top boxes for each type of service
provided by such boxes. How many of these MVPD set-top boxes also contain cable modems or IP
telephony interfaces and how are such modems or interfaces priced? How many contain DVR
capabilities and how are these services priced? How many contain home networking capabilities? How
many are capable of providing video programming on an a la carte basis and is any video programming
provider offering this service?
83. Navigation Devices: We also seek information on the retail availability of navigation devices
to consumers.109 How many such devices have been sold?110 What are the obstacles to equipment
manufacturers and others to obtaining approval to attach devices to MVPD systems? To what extent, if
any, do subscriber agreements attempt to limit the uses that may be made of customer premises
equipment? How does customer premises equipment design, function, and/or availability affect consumer
choice and competition between firms in the video programming market? We request information on the
development and deployment of electronic programming guides ("EPGs"), including the number and type
of EPGs that video programming distributors offer or plan to offer to their subscribers, and the
109 Under the Commission's navigation rules, video programming distributors (except DBS providers) were required
to separate security functions from non-security functions by July 1, 2000, and make modular security components
available by that date. See Implementation of Section 304 of the Telecommunications Act of 1996, Commercial
Availability of Navigation Devices, 13 FCC Rcd 14775 (1998) ("Navigation Devices Order"). To ensure the
competitiveness of separated security, the Commission determined that by July 1, 2007, MVPDs will no longer be
allowed to offer conditional access and other functions in a single integrated device. See Implementation of Section
304 of the Telecommunications Act of 1996, Commercial Availability of Navigation Devices, 20 FCC Rcd 6794
(2005) ("Navigation Second Report and Order"). See also Implementation of Section 304 of the
Telecommunications Act of 1996, Commercial Availability of Navigation Devices 18 FCC Rcd 20885 (2003) ("2003
Navigation Devices Second Report and Order and FNPRM"). See also 47 C.F.R. 76.1204 (a)(1).
110 In order to promote a competitive market for set-top boxes, the Commission in 1998 required MVPDs to separate
security in their leased devices and rely on the same conditional access mechanism that consumer electronics
manufacturers use (commonly referred to as "common reliance"). Implementation of Section 304 of the
Telecommunications Act of 1996: Commercial Availability of Navigation Devices, 13 FCC Rcd 14775, 14808 80
(1998); 47 C.F.R. 76.1204(a)(1) ("First Navigation Report"). The integration ban originally was set to go into
effect on January 1, 2005, but was extended twice at the urging of cable operators, first to July 1, 2006, and
ultimately to July 1, 2007. Implementation of Section 304 of the Telecommunications Act of 1996: Commercial
Availability of Navigation Devices, 18 FCC Rcd 7924, 7926 4 (2003); Implementation of Section 304 of the
Telecommunications Act of 1996: Commercial Availability of Navigation Devices, 20 FCC Rcd 6794, 6802-03 13
(2005) ("2005 Deferral Order"). In 2006, the D.C. Circuit Court of Appeals upheld the integration ban against a
challenge by the cable industry. Charter Communications Inc. v. FCC, 460 F.3d 31 (D.C. Cir. 2006).
Federal Communications Commission
FCC 07-207technologies used to distribute EPGs. What relationships or partnerships exist between video providers
and developers of EPGs? To what extent are MVPD-affiliated EPGs available to competitors? Do
exclusive agreements covering EPGs affect competition in the video programming market? To what
extent do video programming subscribers have access to EPGs that are unaffiliated with their video
provider? In 2003, the Commission adopted technical, labeling, and encoding rules to permit television
sets to be built with "plug-and-play" functionality for one-way digital cable services.111 We request
information on how many products are currently available with plug-and-play functionality, or are soon to
be available. In June 2007, the Commission adopted a Third Further Notice of Proposed Rulemaking
seeking comment on (1) proposed standards to ensure bidirectional (i.e., two-way) compatibility of cable
systems and consumer electronics equipment, (2) whether any rules the Commission adopts in the
proceeding should apply to noncable MVPDs, and (3) whether there are technological solutions that are
network agnostic and deployable across all MVPD platforms.112
84. Open Cable Application Platform:113 CableLabs has established a private negotiation
process by which individual consumer electronics manufacturers may develop devices that include two-
way functionality using the CableLabs' Open Cable Application Platform ("OCAP") middleware
solution.114 We seek updated information on developments since our last report, including information on
which manufacturers are incorporating OCAP into their products, the number of OCAP compliant
products that have been deployed, and how many are in use by subscribers today. What percentage of
cable subscribers are able to use OCAP-compliant devices today? When do MSOs plan to deploy OCAP
compliant devices? What types of applications exist for OCAP? Do smaller cable systems have plans to
deploy OCAP compliant devices and, if so, how will they do it? In January 2006, several MSOs
announced they would begin trials of OCAP in select markets. These markets include Comcast in
Philadelphia, Denver, Boston, and Union, New Jersey; Time Warner in New York, Milwaukee, Green
Bay, Lincoln, and Waco; and Advance/Newhouse in Indianapolis.115 In addition, Cox, Cablevision, and
Charter made similar announcements, but did not specify the markets where the trials would occur.116 We
seek information on the results of these trials and whether they are expected to lead to commercial
implementations and, if so, when. OCAP also is expected to facilitate bi-directional services (i.e., two-
111 2003 Navigation Devices Second Report and Order and FNPRM, 18 FCC Rcd 20885.
112 See Implementation of Section 304 of the Telecommunications Act of 1996, Commercial Availability of
Navigation Devices, Compatibility Between Cable Systems and Consumer Electronics Equipment, 22 FCC Rcd
113 The OpenCable standard (also known as "two-way plug-and-play") is the result of an initiative being managed
through Cable Television Laboratories, Inc. ("CableLabs"), a research and development consortium of cable
operators. The standard is made up of technical specifications intended to facilitate interoperability among digital
navigation devices manufactured by multiple vendors. See Navigation Devices Order, 13 FCC Rcd 14775.
114 Middleware is a term of art for software that acts as an interpretation layer between the operating system and
specific devices of a piece of hardware and software. OCAP is related to the more familiar Java platform developed
by SUN Microsystems. For each operating system (such as Microsoft Windows or Apple Mac OS), a version of the
Java Virtual Machine must be adapted. Once this is done, any program written in Java will run properly. Once
OCAP has been tested and certified on a platform (or set-top box, television, or other consumer electronics device),
application developers, including the MSOs themselves, may write a single version of their application and test it on
one OCAP implementation and be assured it will run on all OCAP implementations.
115 CableLabs, Cable Television Industry Voices Support for OCAP and Two-Way Digital Cable-Ready Product
Deployments (press release), Jan. 11, 2006.
Federal Communications Commission
FCC 07-207way) and interactive television ("ITV") applications and services.117 We request information on industry
developments in this area. In November 2006, CEA presented an alternative means of achieving limited
interactivity to provide support for video-on-demand, interactive program guides, and switched digital
broadcast called DCR+.118 We seek additional information on DCR+ and any technical issues that
85. PacketCable: Another CableLabs project, PacketCable, is the specification standard
developed for the delivery of advanced real-time multimedia services over two-way cable plant.
PacketCable uses IP technology to enable a wide range of services, including IP telephony, multimedia
conferencing, interactive gaming, and general multimedia applications.119 PacketCable has the potential
to allow the rapid introduction of new services, such as the integration of the cable network with wireless
networks and cross platform feature integration (e.g., set-top box applications that integrate with the voice
service for features including caller ID display on the TV and the ability to forward incoming calls to
voicemail or other telephone numbers. For the 2007 Report, we solicit information on the PacketCable
86. CableCARDs: CableCARDs permit the reception of secured digital cable services without
the addition of a set-top box.120 As of June 2007, cable operators have deployed more than 271,000
CableCARDs.121 We seek updated information on the number of CableCARDs operators have placed in
service. We also seek information on the manner in which subscribers may obtain a CableCARD,
whether operators require professional installation of the card, and any subscription charges or one-time
fees associated with installing or authorizing the CableCARD. What is the monthly price, if any, for a
CableCARD? What problems have MVPDs or consumers encountered with CableCARDs, and how have
they been resolved? Cable operators continue to develop multi-stream and two-way CableCARDs. We
seek information on the status of this development and the impact it has on the competitive marketplace
for digital cable-ready receivers, including DVRs.122 In addition, we seek information on the
compatibility of devices that depend on CableCARDs that are connected to systems using switched video.
In 2005, we reported that consumers currently need a set-top box to receive two-way services (e.g., VOD,
PPV), but that efforts were underway to develop two-way digital televisions, which will permit full-
featured interactivity without a set-top box.123 We request updated information on these efforts.
117 Interactive television ("ITV") is a service that supports subscriber-initiated choices or actions that are related to
one or more video programming streams.
118 Letter from Consumer Electronics Association to Kevin J. Martin, Chairman, FCC, CS Docket 97-80 (Nov. 7,
2006) (proposal for bi-directional digital cable compatibility and related issues submitted by consumer electronics
and information technology companies and the Consumer Electronics Association).
119 Kevin Jacobs, Eric Rosenfeld, PacketCable 2.0 Design Goals, Strategic Drivers and Architecture, CED WEB
EXTRA, Dec. 1, 2006, at http://www.cedmagazine.com/article/CA6398269.html (visited Jan. 30, 2006).
120 At present, CableCARDs support only one-way transmission of the cable signal from the cable operator to the
television. In 2003, the Commission adopted technical, labeling, and encoding rules to permit television sets to be
built with "plug-and-play" functionality for one-way digital cable services. 2003 Navigation Devices Second Report
and Order and FNPRM, 18 FCC Rcd 20885.
121 See Letter from Neal M. Goldberg, Vice President and General Counsel, NCTA to Marlene Dortch, Secretary,
FCC, CS Docket No. 97-80 (June 25, 2007).
122 Multi-stream unidirectional CableCARDs will permit the development of multi-tuner DVRs without requiring
the use of multiple CableCARDs to access each stream.
123 2005 Report, 21 FCC Rcd at 2598 211.
Federal Communications Commission
FCC 07-20787. Digital Rights Management. Digital content protection technology seeks to prevent the
unauthorized copying and redistribution of digital media, which is susceptible to piracy because an
unlimited number of high quality copies can be made and distributed in violation of copyright laws. The
absence of adequate content protection schemes may serve as a disincentive for content providers to
permit distributors to carry certain digital programming and for consumers to invest in digital equipment
and technologies. We seek comment on what content protection technologies are now available, how
they work, and what legal or marketplace impediments have affected the roll-out of such tools. What
technologies have consumer electronic manufacturers included in their set-top boxes or other devices
designed to receive and display digital programming? What types of content protection requirements
have video program networks negotiated with MVPDs to secure distribution of digital media? What
types of content protection technologies are MVPDs using to secure on-demand digital media or
programming made available through DVRs? What is the relationship between content protection
technologies and the availability of digital navigation devices for sale at retail establishments? In this
regard, we note that in 2003 the Commission adopted an interim policy to allow CableLabs to make
"initial determinations regarding the use of new output or content protection technologies."124 Is
CableLabs taking the proper steps to approve outputs and associated content protection technologies? We
seek comment on what security measures are in use by IP-based technology providers, and the effect of
the choice of such security measures on competition. We also invite comment on how the Commission
can encourage the development of digital rights management technology that will promote consumer uses
of, and access to, high value digital content.
88. Advances in Digital Broadcasting: Broadcasters continue to improve their service and
offerings through enhancements to digital Vestigial Sideband Broadcasting ("VSB"), called Enhanced
VSB ("E-VSB") and Advanced VSB ("A-VSB"). E-VSB was approved by the American Television
Standards Committee in July 2004, as an amendment to the standard that allows broadcasters to choose
between bit rates and added robustness without impeding HDTV.125 Possible uses of the technology
include applications such as robust data broadcasting to desktops, transmissions of file-based information
to handheld receivers, and "fallback" audio.126 However, E-VSB adoption has been slow due to a lack of
demand and a lack of E-VSB enabled receivers.127 A-VSB is another amendment being proposed to the
ATSC for mobile video applications.
124 2003 Navigation Devices Second Report and Order and FNPRM, 18 FCC Rcd at 20919 79.
125 Broadcast Engineering, Real-world Test Detail Reliable E-VSB Performance, May 1, 2006, at
http://broadcastengineering.com/news/evsb-performance-test-20060501/(visited Jan. 29, 2007). A higher bit rate
enables the broadcaster to transmit more data but limits the receivable range of the signal. Lowering the bit rate
reduces the amount of data that can be sent, but increases the distance at which the data can be received.
126 "Fallback audio" is a more robust audio stream used if the primary audio stream is unavailable due to signal
degradation or other circumstances. Advanced Television Systems Committee, ATSC Approves Enhancements to
DTV Standard (press release), July 20, 2004.
127 Claudia Kienzle, E-VSB in Search of a Market, TV TECHNOLOGY, April 24, 2006, at
http://www.tvtechnology.com/features/news/2006.04.24-n_E_VSB_in_search.shtml (visited Jan. 29, 2007).
Federal Communications Commission
FCC 07-207ATSC has accepted the proposal of A-VSB, but it has not yet reached the "candidate standard" stage,128
which involves more exacting technical review.129 We request information on these and other
technological advances in digital broadcasting.
89. Technical Standards: We seek information on the effect that technical rules and standards
have on the market for video programming services. Are there specific actions with respect to the
establishment of technical rules and standards that the Commission may take to foster greater competition
among video service providers? Do current technical rules and standards related to the provision of video
services, such as the "plug-and-play" standards, provide a level playing field among competitors in the
video delivery marketplace?130 We seek comment on this and other technical standards.
90. Home Networking and Content Mobility: Home networking allows consumers to connect
multiple devices in the home (e.g., set-top boxes, television sets, personal computers, video game
consoles) with each other and to the Internet. Companies such as Verizon131 and AT&T132 are looking to
technologies from standards groups such as the Multimedia over Coax Alliance (`MoCA"),133 Home
Phoneline Networking Alliance ("HomePNA"),134 and HomePlug135 to utilize existing wires in the home
to carry networking signals. Current wireless networks, using the 802.11b/g technical standard, typically
have lower throughput than wired networks and are subject to interference from other wireless devices.136
These networks can have difficulty carrying a single HD video stream. A new wireless standard under
development intended to address the throughput issue is IEEE 802.11n.137 The 802.11n standard has not
been finalized, but devices have been built based on draft versions of this standard and are currently
available at retail (e.g., the Linksys WRT300N Wireless-N Broadband Router). The standard is targeted
to have an estimated maximum throughput of 600 Mbps and should be capable of carrying multiple HD
video streams simultaneously, allowing a wireless network to be a practical solution for moving video
128 A Candidate Standard is a document that has received significant review within a specialist group. Advancement
of a document to Candidate Standard is an explicit call to those outside of the related specialist group for
implementation and technical feedback. See The Advanced Television Systems Committee, Candidate Standards,
http://www.atsc.org/standard/candidate_standards.html (visited Feb. 7, 2007).
129 Doug Lung, NAB RF Reflections: A-VSB and DTx, TV TECHNOLOGY, June 14, 2006 at
http://www.tvtechnology.com/features/On-Rf/2006.06.14-f_Doug_Lung.shtml (visited Jan. 29, 2007).
130 2003 Navigation Devices Second Report and Order and FNPRM, note 111 supra.
131 Craig Matsumoto, Entropic, Verizon Serve Up MOCA, LIGHT READING, Jan. 5, 2006, at
http://www.lightreading.com/document.asp?doc_id=86434 (visited Jan. 30, 2007).
132 AT&T Says 'Yes' to HomePNA, 'No' to MoCA, THE ONLINE REPORTER, Sept. 2, 2006, at
http://www.onlinereporter.com/article.php?article_id=7568 (visited Jan. 30, 2007).
133 Multimedia over Coax Alliance, at http://mocalliance.org (visited Jan. 30, 2007).
134 Home Phoneline Networking Alliance, at http://www.homepna.org (visited Jan. 30, 2007).
135 HomePlug Powerline Alliance, at http://www.homeplug.org (visited Jan. 30, 2007).
136 Throughput is defined as the data-carrying capacity of a network, a result of the number of data bits transferred at
one time and the rate at which they are transferred. The 802.11b/g standard estimates a maximum throughput of 54
million bits per second ("Mbps"), but real-world performance usually results in a maximum throughput of less than
24 Mbps shared among all devices on the network. An Ethernet home network usually has a reliable throughput of
100 Mbps for each device. A high definition video stream requires a constant 12-20 Mbps for reliable live playback.
137 IEEE, IEEE 802.11n Report, at http://grouper.ieee.org/groups/802/11/Reports/tgn_update.htm (visited Jan. 30,
Federal Communications Commission
FCC 07-207content around the home. We seek updated information on technical standards and other developments
regarding home networking.
Foreign Markets91. In previous reports, we have examined foreign markets because developments in other
countries can lend insight into the nature of competition in the United States and the relative efficiency of
market structures and regulations within our nation. We seek current information and case studies on
video delivery in foreign markets, including the offering of digital tiers and a la carte services.
Specifically, we seek data regarding the differences between the United States and other national markets
in the distribution of video programming, including developments in pricing and packaging of
programming, such as a la carte offerings; developments in VoIP; the digital television transition; and
broadcast, cable, and satellite competition. We seek information regarding adoption rates for these
different video distribution platforms, the technology platforms that are proving successful, and the
regulatory models associated with increased levels of competition. We seek input from video distributors
operating both in the United States and in foreign markets. How do different regulatory approaches affect
their business models? Commenters also should identify any country in particular that the Commission
PROCEDURAL MATTERS92. Authority. This Notice is issued pursuant to authority contained in Sections 4(i), 4(j), 403,
and 628(g) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 403, and
93. Ex Parte Rules. There are no ex parte or disclosure requirements applicable to this
proceeding pursuant to 47 C.F.R. 1.1204(b) (1).
94. Pursuant to Sections 1.415 and 1.419 of the Commission's rules, 47 C.F.R. 1.415, 1.419,
interested parties may file comments on the Notice of Inquiry, MB Docket No. 07-269, on or before the
dates indicated on the first page of this document. Comments may be filed using: (1) the Commission's
Electronic Comment Filing System ("ECFS"), (2) the Federal Government's eRulemaking Portal, or (3)
by filing paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121
Electronic Filers: Comments may be filed electronically using the Internet by accessing the
ECFS: http://www.Commission.gov/cgb/ecfs/ or the Federal eRulemaking Portal:
http://www.regulations.gov. Filers should follow the instructions provided on the website for
For ECFS filers, if multiple docket or rulemaking numbers appear in the caption of this
proceeding, filers must transmit one electronic copy of the comments for each docket or
rulemaking number referenced in the caption. In completing the transmittal screen, filers
should include their full name, U.S. Postal Service mailing address, and the applicable
docket or rulemaking number. Parties may also submit an electronic comment by
Internet e-mail. To get filing instructions, filers should send an e-mail to email@example.com,
and include the following words in the body of the message, "get form." A sample form
and directions will be sent in response.
Paper Filers: Parties who choose to file by paper must file an original and four copies of each
filing. If more than one docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or rulemaking number.
Federal Communications Commission
FCC 07-207Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail (although we continue to experience delays in
receiving U.S. Postal Service mail). All filings must be addressed to the Commission's Secretary,
Office of the Secretary, Federal Communications Commission.
The Commission's contractor will receive hand-delivered or messenger-delivered paper
filings for the Commission's Secretary at 236 Massachusetts Avenue, N.E., Suite 110,
Washington, DC 20002. The filing hours at this location are 8:00 a.m. to 7:00 p.m. All
hand deliveries must be held together with rubber bands or fasteners. Any envelopes
must be disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority
Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
U.S. Postal Service first-class, Express, and Priority mail should be addressed to 445 12th
Street, S.W., Washington, DC 20554.
In addition, parties must serve the following with either an electronic copy via e-mail or a paper
copy of each pleading: (1) the Commission's duplicating contractor, Best Copy and Printing,
Inc., Portals II, 445 12th Street, S.W., Room CY-B402, Washington, DC 20554, telephone 1-800-
378-3160, or via e-mail at www.bcpiweb.com; (2) Marcia Glauberman, Media Bureau, 445 12th
Street, S.W., Room 2-C264, Marcia.Glauberman@fcc.gov; and (3) Dana Scherer, Media Bureau,
445 12th Street, S.W., Room 2-C222, Dana.Scherer@fcc.gov.
95. People with Disabilities: Contact the Commission to request materials in accessible formats
(Braille, large print, electronic files, audio format, etc.) by e-mail at Commission504@Commission.gov
or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).
96. The Media Bureau contacts for this proceeding are Marcia Glauberman and Dana Scherer at
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Federal Communications Commission
COMMISSIONER DEBORAH TAYLOR TATE*
Annual Assessment of the Status of Competition in the Market for the Delivery of Video
Programming,MB Docket No. 07-269
Since arriving at the FCC, I have been pleased to support policies that have facilitated commercial
negotiations, provided incentives for investment, and encouraged competition; all of which hopefully
results in real world benefits for consumers, whether through quality, choice, or new advances in
The Annual Video Competition Report is one of the most important that this agency produces for
Congress. It is the goal of this Commission to encourage competition, especially in the video
marketplace. We have taken a number of steps to encourage new entrants, and consumers now have more
options for video than ever before.
Our deregulatory decisions in the U.S. communications industry have resulted in significant investment--
likely more than $70 billion by the telecommunications industry in 2007 alone. We have seen
unparalleled investment in new fiber deployment and new entrants offering video and broadband.
Consumers are reaping the benefits with triple and even quadruple plays.
Competition can benefit consumers in terms of lower prices, a broader panoply of products, improved
fidelity and quality, and even totally new tools to enhance the consumer experience. It also leads to
investment, which advances both technology and innovation. With this in mind, the findings of the
Annual Video Competition Report serve as a foundation for much of our policymaking. Therefore, the
accuracy and transparency of the information is of paramount import.
Reasonable minds may differ in drawing conclusions from data. However, that data must be available for
review and able to withstand scrutiny. Data should be complete and viable. That is why it is crucial that
we set in motion a process for future competition reports as soon as possible, and that we ensure
reliability and completeness prior to making an analysis of the underlying data, and then drawing a final
This year's Report focuses heavily on the findings of one source, rather than the numerous sources our
reports have included in the past. I believe we must consider a broader universe of information sources
when we are considering so broad a change in policy. One option would be to supplement our analysis by
requesting that Form 325 Survey information be provided by all cable operators. Just as our sister
agency, the Securities and Exchange Commission, relies upon information it receives from cable
companies, we should also be able to rely on the trustworthiness of the industry's own information.
Finally, there should be no reason that this Commission cannot aptly analyze all relevant data, from all
appropriate sources, as we do for other competition reports.
I am now able to approve this item concluding that the 70/70 test has not been met for the 2006 Report.
However, I do not agree that we should postpone its delivery to Congress or to the public. I believe the
information contained in the current draft supports the Report's conclusion that this data does not
demonstrate with certainty that the second prong of the 70/70 test has been met. Therefore, I would like
* This statement was prepared while Commission Tate was in office.
Federal Communications Commission
FCC 07-207to see us move expeditiously to send this already-delayed Report to Congress now.
I look forward to working with the Chairman and my colleagues to resolve the questions that have been
raised regarding the underlying data in this Report in order to provide our 2007 Report in a more timely,
thorough manner. We cannot debate philosophy and substance until we all have access to full and
complete information upon which to base our respective positions. And I hope that we can work together
to finalize our 2007 Report to Congress expeditiously.
Federal Communications Commission
COMMISSIONER ROBERT M. MCDOWELLRe:
Annual Assessment of the Status of Competition in the Market for the Delivery of Video
Programming,MB Docket No. 07-269
I support this Notice, which posits a comprehensive set of questions about the state of
competition in the market for the delivery of video programming. As our prior Video Competition
Reports have demonstrated, today's video marketplace is dynamic and more competitive than ever.
Virtually every American enjoys more options for the delivery of video programming and more choices
in programming content and services than ever before. The once dominant cable industry's share of
multichannel video customers has declined steadily over the past 15 years, while the two DBS companies
continue to grow and the incumbent telephone companies have begun to compete for video customers in
earnest. Moreover, the rapid decline in vertical integration of cable operators and program networks and
the increase in the number of channels available on MVPDs provide further evidence of robust
I look forward our study of the data, analyses and comments sought by the Notice to inform our
policy determinations in the media sector. The Commission should examine the results carefully and
with an objective view aimed toward developing the policies appropriate to the competitive market
environment. I hope that our experience with this year's 2006 Video Competition Report, with its radical
departure in methodology from previous reports, will be an anomaly in Commission history.
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