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Statistical Report on Average Rates for Basic Service, Cable Programming Service, and Equipment

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Released: December 31, 1969

Federal Communications Commission

DA 09-53

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Implementation of Section 3 of the Cable
)
Television Consumer Protection and Competition
)
MM Docket No. 92-266
Act of 1992
)
)

Statistical Report on Average Rates for Basic
)
Service, Cable Programming Service, and
)
Equipment
)

REPORT ON CABLE INDUSTRY PRICES

Adopted: January 15, 2009

Released: January 16, 2009

By the Chief, Media Bureau:

TABLE OF CONTENTS

Heading
Paragraph #
I.
INTRODUCTION AND EXECUTIVE SUMMARY ........................................................................... 1
II. OVERVIEW OF STUDY .................................................................................................................... 15
III. SURVEY RESULTS............................................................................................................................ 21
A. Basic, Expanded Basic and Digital Services................................................................................. 21
B. Weighted Average Cable Prices................................................................................................ 27
C. Price Per Viewing Hour.............................................................................................................. 31
D. Programming Expense for Expanded Basic................................................................................... 37
E. Family Tier..................................................................................................................................... 38
F. Programming Sold on an Individual Basis..................................................................................... 40
G. Distribution of Channels ................................................................................................................ 42
H. Subscriber Equipment .................................................................................................................... 45
I.
Service Installation Charges ......................................................................................................... 46
J. System Operating Capacity............................................................................................................ 47
K. Services Availability and Subscription .......................................................................................... 49
L. Receipts from Cable Services ........................................................................................................ 50
IV. ECONOMETRIC ANALYSIS............................................................................................................. 54
V. CONCLUSIONS...................................................................................................55
VI. ORDERING CLAUSE ......................................................................................................................... 56
APPENDIX A
APPENDIX B

Federal Communications Commission

DA 09-53

I.

INTRODUCTION AND EXECUTIVE SUMMARY

1.
Section 623(k) of the Communications Act, as amended by the Cable Television
Consumer Protection and Competition Act of 1992 ("Cable Act"),1 requires the Commission to publish a
statistical report on average rates charged for the basic cable service and cable programming service tiers,
and cable equipment.2 The Cable Act also requires the Commission to compare the average rates of cable
operators subject to "effective competition," as identified through specific adjudications, with those of
cable operators that have not been found subject to effective competition.3 The key findings are presented
below.
2.
Averages for all communities. The average monthly price of expanded basic service
(the combined price of basic cable service and cable programming service) increased by 3.9 percent over
the 12 months ending January 1, 2006; by 4.6 percent over the 12 months ending January 1, 2007; and by
5.0 percent over the 12 months ending January 1, 2008. Chart 1 below shows the trend in cable prices
from 1995 to 2008. Over this 13-year period, the price of expanded basic service has grown from $22.35
to $49.65, an increase of 122.1 percent, compared with an increase in the Consumer Price Index of 38.4
percent over the same period. 4


1 Section 623(k) was adopted as Section 3(k) of the 1992 Cable Act, Pub. L. No. 102-385, 106 Stat. 1460, codified
at 47 U.S.C. 543(k).
2 The term "service tier" refers to a category of cable service provided by a cable operator and for which a separate
rate is charged. See 47 U.S.C. 522(l7). Cable operators are required to offer an entry-level video-programming
service tier called "basic cable service." Basic cable service must include, at a minimum, the local broadcast
stations and any public, educational, and governmental access channels that may be required pursuant to an
agreement with a local government. See 47 U.S.C. 543(b)(7). "Cable programming service" includes channels
other than channels on the basic cable service tier or for which per-channel or per-program charges apply. See 47
U.S.C. 543(k)(1)(2). The term "cable equipment" refers to a cable converter box, remote control unit, and other
equipment used to access cable services. See 47 U.S.C. 543(b)(3).
3 47 U.S.C. 543(k)(1) (cross-referencing 47 U.S.C. 543(a)(2)).
4 We note that during the survey period most major publicly traded cable MSOs continued to report double-digit or
near double-digit revenue and operating cash flow or operating income growth rates on both a quarterly and an
annual basis. Comcast, for example, reported that its cable operations experienced 9.4 and 13.4 percent increases in
revenue and operating cash flow, respectively, for the fourth quarter of 2007 compared with the same quarter of
2006, and, for the full year 2007 over 2006, reported 11.1 and 13.5 percent increases, respectively. See Comcast
Corp., Comcast Reports 2007 Results and Provides Outlook for 2008 (press release), Feb. 14, 2008. Time Warner
reported that pro forma revenue and operating income for its cable operations grew by 6.5 and 17.1 percent,
respectively, for the fourth quarter of 2007 over the fourth quarter of 2006, and by 8.1 and 11.8 percent,
respectively, for the full year 2007 over 2006. See Time Warner Inc., Time Warner Cable Reports 2007Full-Year
and Fourth-Quarter Results
(press release), Feb. 6, 2008. For the fourth quarter of 2007, Cablevision reported
consolidated revenue and operating cash flow growth of 10.8 and 20.4 percent, respectively, and, for the full year
2007 over 2006, reported 11.3 and 16.8 percent growth, respectively. Cablevision also specifically emphasized that
it continued to experience high growth rates in its cable television services operations, where revenue and cash flow
grew by 8.6 and 13.3 percent, respectively, in the fourth quarter of 2007 compared to the fourth quarter of 2006, and
by 11.6 and 9.6 percent, respectively, for the full year 2007 over 2006. See Cablevision Systems Corp., Cablevision
Systems Corporation Reports Fourth Quarter and Full Year 2007 Results
(press release), Feb. 28, 2008. Mediacom
reported that its revenue and operating cash flow increased by 6.2 and 7.7 percent, respectively, in the fourth quarter
2007 compared to the fourth quarter of 2006, and by 6.9 and 4.2 percent, respectively, for the full year 2007 over
2006. See Mediacom Communications Corp., Mediacom Communication Reports Results for Fourth Quarter and
Full Year 2007
(press release), Feb. 26, 2008.
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Federal Communications Commission

DA 09-53

Chart 1

Cable Price and the CPI, 1995-2008

125%
Expanded Basic Price
CPI - All Items
2008
$49.65
100%
75%
50%

Percent Change

CPI - All Items
25%
1995
$22.35
0%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

3.
Cable prices decrease substantially when a second wireline cable operator enters the
market. It does not appear from these results that DBS effectively constrains cable prices. Thus, in the
large number of communities in which there has been a finding that the statutory test for effective
competition has been met due to the presence of DBS service, competition does not appear to be
restraining price as it does in the small number of communities with a second cable operator as reflected
in Chart 1-a below. Prices were 15.5 percent lower as of January 1, 2006; 10.3 percent lower as of
January 1, 2007; and 10.1 percent lower as of January 1, 2008 in communities served by a second cable
operator than they were in noncompetitive communities.

Chart 1-a

Average Price for Expanded Basic Cable Service

Comparison of Competition from DBS and from Second Cable Operator

$60.00
$47.49
$49.97
$48.87
$47.25
$45.48
$45.83
$44.92
$42.59
$38.45
$40.00
$20.00
$-
2006
2007
2008
3

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DA 09-53

2.2 percent lower as of January 1, 2008, in communities where competition from DBS was the basis for
relieving a cable operator from rate regulation than they were in noncompetitive communities.
5.
Recent experience in Hong Kong provides further evidence that wireline competition
constrains cable bills. Between 1995 and 2002, cable bills for subscribers of the leading cable service
provider, "i-Cable", grew at a rate 6.5 times faster than prices for other goods.5 Cable prices began
falling, however, when competitor "now TV" entered the market in 2003. Between 2004 and 2007, i-
Cable's average revenue per user declined 32.9 percent.6 Hong Kong's wireline competition has also
furthered a la carte offerings. When now TV entered the MVPD market in 2003, it offered a la carte
channels and currently offers 29 free channels and 17 a la carte channels. In response, in 2005, i-Cable
began offering theme packages.7 In Singapore, wireline competition had a similar effect on a la carte
offerings. In 2007, SingTel entered the MVPD market in competition with incumbent StarHub.
SingTel's entry into the market included a la carte pay TV options. In response, StarHub began offering
more varied bundled options including a Flexiwatch plan which allows customers that don't watch much
television to purchase individual channels for as little as three days a month.8
6.
Differences between noncompetitive communities and communities relieved from basic-
tier rate regulation. Over the year ending January 1, 2006, prices increased at the same rate 3.9 percent
for both groups of cable operators, those relieved from rate regulation of their basic tier (i.e., those
whom the Commission has found face "effective competition" in their service areas) and those serving
noncompetitive communities (i.e., those for whom no effective competition finding exists). For the years
ending January 1, 2007 and January 1, 2008, prices increased by 6.1 percent and 4.1 percent, respectively,
for the group relieved from rate regulation and by 4.3 percent and 5.2 percent for the noncompetitive
group.
7.
As of January 1, 2006; January 1, 2007; and January 1, 2008, cable operators on average
charged $45.26, $47.27, and $49.65, respectively, per month for expanded basic programming service.
As of the same three dates, cable operators granted relief from rate regulation charged an average of
$43.70, $46.28, and $48.19, respectively, per month for those services, and operators serving
noncompetitive communities charged on average $45.48, $47.49, and $49.97 per month. Thus, cable
operators granted relief from rate regulation continue to exhibit lower expanded basic prices on average,
3.9 percent lower as of January 1, 2006; 2.6 percent lower as of January 1, 2007; and 3.6 percent lower as
of January 1, 2008 than cable operators that serve noncompetitive communities.


5 See i-Cable Communications Ltd., at http://www.i-cablecomm.com/ir/reports/index.php. Between 1995 and 2002,
i-Cable Communications Ltd. Held an exclusive license to provide pay television service throughout Hong Kong via
its Cable TV Hong Kong subsidiary. In July 2002, the Hong Kong government opened the pay television market to
competition. Between 1995 and 2002, Cable TV Hong Kong's Average Revenue Per User (ARPU) increased 13
percent. For purposes of this analysis, we use ARPU as a proxy for the average bill paid by cable subscribers.
During this same period, Hong Kong's Composite CPI increased approximately 2 percent. See The Government of
the Hong Kong Special Administrative Region of the People's Republic of China, Census and Statistics Department
at http://www.censtatd.gov.hk.
6 SNL Kagan Media and Communication at
http://www.snl.com/InteractiveX/Operator.aspx?id=4209088&Printable=1ResetDefaults=1 (visited November 5,
2008).
7 See i-Cable Communications Ltd., 2005 Annual Report, at 11, available at http://www.i-
cablecomm.com/ir/reports/index/php.
8 Huang Xueling, "StarHub revamps packages: Cable subscribers get more choices with a new tier and extra
channels," THE STRAITS TIMES (Singapore), May 30, 2008.
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Federal Communications Commission

DA 09-53

8.
For all three years measured, the degree of difference between expanded basic prices
charged by cable operators that have been granted relief from rate regulation and those that serve
noncompetitive communities varied by subgroup, with the highest percentage differential in each of those
three years associated with the subgroup of cable operators for which relief from rate regulation was
based on competition from a second wireline cable operator.
9.
The charts below show the average prices for expanded basic service for noncompetitive
communities and the communities relieved from rate regulation.

Chart 2

Average Price for Expanded Basic Cable Service

by Basis for Finding of Effective Competition, January 1, 2006
$60.00
$45.48
$45.83
$45.20
$44.73
$38.45
$40.00
$20.00
$-

No Finding of

DBS

Wireless

Low Cable

Second

Competition

Competition

MVPD

Penetration

Cable Operator

Chart 2-a

Average Price for Expanded Basic Cable Service

by Basis for Finding of Effective Competition, January 1, 2007
$60.00
$47.49
$47.25
$47.17
$46.93
$42.59
$40.00
$20.00
$-

No Finding of

DBS

Wireless

Low Cable

Second

Competition

Competition

MVPD

Penetration

Cable Operator

5






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DA 09-53

Chart 2-b

Average Price for Expanded Basic Cable Service

by Basis for Finding of Effective Competition, January 1, 2008
$60.00
$49.97
$48.87
$49.65
$49.80
$44.92
$40.00
$20.00
$-

No Finding of

DBS

Wireless

Low Cable

Second

Competition

Competition

MVPD

Penetration

Cable Operator


10.
Weighted average cable prices. Reflecting the widespread popularity of digital tiers, for
the first time we report the "weighted average price of cable service," defined as the price of expanded
basic service plus the price (including equipment) of the most highly subscribed digital tier, with the
digital price weighted by the percentage of expanded basic cable subscribers that take the digital tier. The
weighted average price of cable service (expanded basic plus digital) has increased by 5.8 percent, 4.7
percent, and 7.4 percent, respectively, over the 12 months ending January 1, 2006; January 1, 2007; and
January 1, 2008, and has grown from $22.35 to $58.80 between 1995 and 2008, an increase of 163.1
percent.
11.
Programming Expenses. Operators in both groups surveyed incurred increases in
programming expenses that were equivalent to more than half of the overall increase in price for
expanded basic service for each year studied. Programming expenses increased on an average monthly
basis by an estimated 6.9 percent, 8.3 percent, and 9.5 percent, respectively, for each of the three years
between 2004 and 2007.
12.
Family Tier. A number of cable operators have begun offering a "family tier" as an
alternative to the cable programming service tier which is targeted toward subscribers who may object to
some of the programming on the latter tier. As of July 1, 2006, a family tier was available to 46 percent
of all subscribers nationwide at an average monthly price of $32.20, which includes the cost of basic
service and the equipment needed to receive the family tier. As of January 1, 2007 and January 1, 2008,
this tier was available to 45 percent and 48 percent of subscribers at an average monthly price of $31.15
and $31.92, respectively.
13.
Advanced Services. The survey results show that most cable operators now offer
advanced services to virtually all of their subscribers. As of January 1, 2006; January 1, 2007; and
January 1, 2008, cable operators offered digital video service to 98 percent of all subscribers for all three
years; Internet access was offered to between 96 and 97 percent of all subscribers for all three years; and
telephone service was offered to 61 percent, 76 percent, and 89 percent, respectively, of all subscribers.
14.
Econometric Analysis. The Report includes an econometric analysis of the data
collected. The results of this analysis show that cable prices tend to be higher in local MVPD markets
where cable operators have a larger share of the market. In markets with two competing cable operators,
the results show that the incumbent operator charges 14.1 percent less, on average, all other things held
constant, than operators charge in markets where a second cable operator is not present. The results also
show a tendency for the incumbent operator to undercut the overbuild rival's price rather than simply
matching that price.
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DA 09-53

II.

OVERVIEW OF STUDY

15.
The information and analysis provided in this Report are based on the Commission's
surveys of cable industry prices ("surveys") that collected data as of January 1, 2005; January 1, 2006;
January 1, 2007; and January 1, 2008, and also on a supplemental survey that collected data as of July 1,
2006.9 The surveys requested data from cable system operators serving random samples of two groups of
communities: (1) communities where operators have not been formally found to meet the statutory test
for effective competition ("noncompetitive communities"); and (2) communities where cable operators
have been found to meet the statutory test for effective competition and, as a result, have been granted
relief from rate regulation at the local level for their basic cable service tier ("communities relieved from
rate regulation").10
16.
In selecting cable operators in the communities relieved from rate regulation, we relied
on the Commission's formal findings of effective competition regarding competition between
multichannel video programming distributors ("MVPDs"),11 based on the statutory definition of effective
competition under the Cable Act.12 Our list of communities relieved from local rate regulation is limited
to adjudicated findings of effective competition. We are unable to take into account those areas of the
country where the conditions for a finding may be present (i.e., where market-based competition may be
present), but no finding has been requested or made.13


9 The Commission directed cable operators to respond to two separate survey questionnaires one requested data as
of January 1, 2006 and the other as of January 1, 2007 and January 1, 2008. In addition, the Commission directed
cable operators to respond to a supplemental survey questionnaire requesting additional data as of July 1, 2006. The
supplemental questionnaire asked for information on the availability and prices charged for services such as family
tiers, channels sold on an individual basis, and "double play" and "triple play" services. Those questions were then
incorporated into the questionnaire for January 1, 2007 and January 1, 2008. See Implementation of Section 3 of the
Cable Television Consumer Protection and Competition Act of 1992
, Statistical Report on Average Prices for Basic
Service, Cable Programming Services, and Equipment
, 21 FCC Rcd 1375 (2006); id.,21 FCC Rcd 9031 (2006)
("supplemental questionnaire"); id, 23 FCC Rcd 818 (2008).
10 In order to collect the data for the January 1, 2006 survey, we surveyed cable operators that served 458 out of the
31,743 noncompetitive communities and cable operators that served 334 out of the 2,055 communities that were
relieved from rate regulation pursuant to the statute. The same communities were surveyed for the supplemental
questionnaire (which collected data as of July 1, 2006). For the January 1, 2007 and January 1, 2008 data, we
selected a different random sample of communities, and surveyed 407 out of 30,352 noncompetitive communities
and 305 out of 3,205 communities relieved from rate regulation. See Attachments 1-a and 1-b for further details
about the surveyed cable operators.
11 The term "MVPD" refers to an entity such as, but not limited to, a cable operator that makes available for
purchase multiple channels of video programming. See 47 C.F.R. 76.905(d).
12 Under the Cable Act, a cable operator may obtain a finding of "effective competition" for a community that meets
one of four tests: (1) fewer than 30 percent of households subscribe to the cable operator's video programming
service ("LP" or "low penetration test"); (2) at least two MVPDs each offer a comparable service to at least 50
percent of households and at least 15 percent of all households subscribe to such service other than from the largest
MVPD ("50/15 test"); (3) a municipality is an MVPD to at least 50 percent of households ("municipal test"); or (4)
a local exchange carrier or its affiliate, or an MVPD using the facilities of such carrier or its affiliate, offers
multichannel video programming service by means other than direct broadcast satellite in an area that is also served
by an unaffiliated cable operator ("LEC test"). See 47 C.F.R. 76.905(b). If a community is deemed subject to
effective competition, the local franchising authority may no longer regulate rates for basic cable service, unless it
seeks and is granted recertification. See 47 U.S.C. 543(a)(2) & 47 U.S.C. 916(a).
13 For example, our sample for data as of January 1, 2006 for the group of communities relieved from local rate
regulation did not include areas where Verizon's FiOS TV has brought competition because that service was still in
(continued....)
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17.
Brief Overview of Survey Methodology. 14 The samples of cable operators relieved from
rate regulation were selected from each of four subgroups according to the primary basis for a finding that
the statutory test for effective competition had been met. The first subgroup comprises communities in
which a second cable operator's offerings provided the basis for the findings of effective competition
("second cable operator" subgroup). In this subgroup, we sampled both incumbent cable operators and
second cable operators, or "rival" operators.15 This subgroup includes communities meeting either: (a)
the 50/15 test based on the presence of at least two MVPDs; (b) the local exchange carrier ("LEC") test
based on the presence of at least two MVPDs, one of which is a LEC or an entity affiliated with or using
the facilities of a LEC; or (c) the municipal test based on the presence of at least two MVPDs, one of
which is operated by the municipality. The second subgroup comprises communities in which a
sufficient percentage of households subscribe to DBS service under the 50/15 test ("DBS" subgroup) to
substantiate a finding of effective competition.16 The third subgroup consists of communities for which
the effective competition findings were based on the offerings of a rival MVPD providing wireless
multichannel video programming service ("wireless MVPD" subgroup).17 The fourth subgroup consists
of cable operators that met the low penetration test at the time of the finding by serving fewer than 30
percent of households in their service area ("Low Penetration" subgroup).
18.
We asked cable operators to complete questionnaires for each community they serve
that was selected for these samples. As required by the statute, the surveys focused on expanded basic
service, consisting of basic cable service plus the most highly subscribed cable programming service tier
("CPST"), as well as the most highly subscribed digital tier.18 Basic cable service consists of the local
broadcast stations; public, educational, and governmental ("PEG") access channels; and typically a few
additional channels that may be of local, regional, national, or international origination. Subscribers must
purchase basic cable service to subscribe to a cable programming service, the latter consisting mostly of
national cable networks. As of January 1, 2006; January 1, 2007; and January 1, 2008, respectively, 88
percent, 88 percent, and 89 percent of subscribers took at least expanded basic service; and 12 percent, 12


(...continued from previous page)
its early stages at the time of that survey. For the January 1, 2007 and January 1, 2008 survey, a small number of
communities served by FiOS were included in our sample.
14 A complete description of our sampling methodology for both the January 1, 2006 and the January 1, 2007 and
January 1, 2008 surveys is provided in Appendix A. Attachments 1-a and 1-b provide an overview of the number of
observations selected for our samples, and the number of survey questionnaires completed by respondents, for each
group and subgroup for both surveys.
15 The term "incumbent" refers to a cable operator that provided service before a second cable operator (the "rival"
cable operator) entered the market.
16 We note that because DBS service is available nationwide, there likely are other areas of the country where DBS
penetration exceeds the 15 percent threshold set forth in the "50/15" test for effective competition, but the
incumbent cable operator has not requested a finding of effective competition.
17 All effective competition findings associated with wireless MVPD competition have been made under the LEC
test, although it would be possible for findings to occur under the 50/15 test or municipal test.
18 The term "cable programming service" as used herein generally refers to the tier with (a) the most channels and
(b) the most subscribers except for basic cable service. This cable programming service includes channels other than
those offered on the basic cable service tier, other cable programming tiers including mini tiers, or a per-channel or
per-program basis. In general, the most highly subscribed cable programming service is an analog tier, although the
percentage of subscribers that take a digital tier in addition has grown rapidly in recent years.
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percent, and 11 percent took basic cable service only.19 As of January 1, 2006; January 1, 2007; and
January 1, 2008, respectively, 42 percent, 46 percent, and 53 percent of subscribers took at least one
digital tier of service.20 Cable operators responding to the two surveys were asked to report prices of
basic cable service, cable programming service, and the most highly subscribed digital service as of four
dates: January 1, 2008; January 1, 2007; January 1, 2006; and January 1, 2005. This permitted us to
calculate the annual percentage changes for the years ending January 1, 2006; January 1, 2007; and
January 1, 2008.
19.
In addition to these monthly prices, the questionnaires asked for prices to lease cable
equipment and to install cable service. In addition, information was gathered on factors that affect prices,
including programming expenses, system operating capacity, and number of subscribers to various cable
services. The supplemental questionnaire (and the questionnaire for January 1, 2007 and January 1, 2008)
asked for information on the availability and prices charged for services such as family tiers, channels
sold on an individual basis ("a la carte"), and the so-called "double play" and "triple play" services.21
Averages for each of these elements were calculated by sample subgroup, by the larger sample groups
(operators serving noncompetitive communities and communities relieved from rate regulation), and
overall as a weighted average of the sample groups.22
20.
Accuracy and Reliability Review.23 Consistent with past practice, we have undertaken a
number of steps to improve the accuracy and reliability of the raw data upon which this report is based.
First, a responsible party within each cable operator's company was asked to certify the completeness and
accuracy of that company's response. Next, we systematically examined all responses to ensure that they
were complete, appeared to be reasonably accurate, and were reliable. The responses were audited using
statistical quality-control tests to identify observations with apparent inaccuracies. For example, when a
particular response was found to be outside of its expected reasonable range, internally inconsistent, or
missing, we examined all of the information on that questionnaire more closely. Finally, we examined
the data in the tables created for the report as a second layer of quality control to ensure the accuracy of
the underlying data. After our examination we contacted those cable operators that appeared to have


19 This includes the 4 percent of subscribers (as of January 1, 2006; as well as January 1, 2007 and January 1, 2008)
whose cable operators do not offer separate rates for the basic cable service programming tier, but which instead
offer a bundled basic tier that includes channels typically placed on expanded basic. For the purpose of calculating
cable prices, we include these bundled prices under basic cable service. If we were to remove these 4 percent of
subscribers whose cable operators do not offer separate rates, the average price for basic cable service would be
$13.99 rather than $14.59 as of January 1, 2006; $14.26 rather than $15.08 as of January 1, 2007; and $15.06 rather
than $15.93, as of January 1, 2008.
20 This 42 percent (as of January 1, 2006) is the percent of digital subscribers among all basic subscribers. The
percent of digital subscribers among all expanded basic subscribers was 48 percent as of January 1, 2006; 52 percent
as of January 1, 2007; and 61 percent as of January 1, 2008. See Attachments 3, 3-a, and 3-b. Subscription to
expanded basic service is typically a prerequisite to subscription to a digital tier.
21 "Double play" refers to the bundling of traditional cable video service together with Internet access service.
"Triple play" refers to the bundling of traditional video service, Internet access, and cable voice service (including
both traditional circuit-switched telephony and voice over Internet protocol, or "VOIP," telephony). Usually, these
bundles of services are sold with a discount from the price that would be charged if each service were purchased
separately. Our surveys did not attempt to measure these discounts.
22 The weights or importance given to each subgroup and group in calculating the overall average price are based
upon estimates of the share of cable subscribers in each subgroup and group. See Appendix A for additional
information.
23 For additional discussion of our data quality control procedures, see Appendix A.
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questionable data and asked them to correct all responses on any questionnaire that appeared
unreasonable or to provide information to complete missing responses.24

III.

SURVEY RESULTS

A.

Basic, Expanded Basic and Digital Services

21.
Tables 1, 1-a, and 1-b display the average increases in the prices for basic service,
expanded basic service (consisting of basic cable service and cable programming service), and the most
highly subscribed digital tier (with Table 1 showing data as of January 1, 2006 and percentage increases
from January 1, 2005; Table 1-a showing similar data as of January 1, 2007 with percentage increases
from January 1, 2006; and Table 1-b showing similar data as of January 1, 2008 with percent changes
from January 1, 2007).25 For the period between January 1, 2005 and January 1, 2006, the average price
for expanded basic service increased by 3.9 percent, from $43.56 to $45.26. Over the same period, the
price of basic cable service increased by 2.7 percent, from $14.20 to $14.59, and the price of cable
programming service increased by 4.5 percent, from $29.36 to $30.67. On average, the prices in
noncompetitive communities and communities relieved from rate regulation increased at the same rate
3.9 percent during that period, to $45.48 and $43.70, respectively. Overall, the price of expanded basic
service increased by 122.1 percent from 1995 to 2008, the 13 years since the period immediately prior to
Congress' enactment of the Telecommunications Act of 1996.
22.
The Bureau of Labor Statistics ("BLS") publishes a Consumer Price Index ("CPI") that
measures general price inflation through changes in the prices of goods and services.26 The BLS also
publishes a CPI index which excludes food and energy. This index is commonly used as a measure of
core inflation.27 These two series track each other very closely with the exception of 2006, 2007, and
2008. The CPI has increased by 38.4 percent and 32.3 percent, respectively, for all items and all items
less food and energy from 1995 to 2008. Comparing the increase in cable price during the year ending
January 1, 2006 to the increase in the CPI excluding food and energy over the same period, we find that
the cable price increase of 3.9 percent was substantially higher than the increase in the "core" inflation
rate, which was 2.2 percent. On the basis of the CPI for "all items," general inflation increased by 3.9
percent over the 12 months ending January 2006, the same percentage as cable prices rose during that
time period. Table 1 displays information on the additional price that consumers must pay above that
charged for expanded basic service to purchase the most highly subscribed digital tier, including
equipment, which consists of a digital set-top converter and remote control unit. Over the 12 months
ending January 1, 2006, the average price for the digital tier and equipment increased by 1.7 percent, from
$13.59 to $13.83.


24 The percentage of survey responses that require follow-up inquiries may vary over time based on such factors as
the familiarity of the respondents with the survey and the introduction of new questions to the survey instrument.
For the 2006 data reflected in this Report, we contacted approximately 45.7 percent of the respondents with requests
for clarification or correction; for the 2007/2008 data, we contacted approximately 60.0 percent of the respondents
with such requests.
25 Note that data for January 1, 2006 are similar but not exactly the same in Tables 1 and 1-a. This is because we
draw a different random sample of cable operators for these two surveys. For additional information on our
sampling methodology, see Appendix A and Attachments 1-a (2006) and 1-b (2007/2008).
26 See Attachment 4, which reports the CPI index for "all items" and "all items less food and energy."
27 See, e.g., M. F. Bryan, S. G. Cecchetti, and R. L. Wiggins, Efficient Inflation Estimators, National Bureau of
Economic Research, Working Paper 6183 (1997).
10

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Table 1

Monthly Prices 2006

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Programming Service

Relieved
Second

January 1, 2006

Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator

Basic cable service tier

$14.59
$14.52
$15.09
$13.07
$15.81
$15.96
$15.65
Prior year (1/1/05)
$14.20
$14.14
$14.59
$12.89
$15.19
$15.32
$15.20
Percent change
2.7%
2.6%
3.4%
1.4%
4.1%
4.1%
2.9%

Cable programming service tier

$30.67
$30.96
$28.62
$25.38
$30.01
$29.24
$29.07
Prior year (1/1/05)
$29.36
$29.63
$27.48
$23.99
$29.08
$27.86
$27.72
Percent change
4.5%
4.5%
4.1%
5.8%
3.2%
5.0%
4.9%

Expanded basic service

$45.26
$45.48
$43.70
$38.45
$45.83
$45.20
$44.73
Prior year (1/1/05)
$43.56
$43.77
$42.07
$36.89
$44.27
$43.18
$42.93
Percent change
3.9%
3.9%
3.9%
4.2%
3.5%
4.7%
4.2%
2006 price compared to Noncompetitive group
-3.9%
-15.5%
0.8%
-0.6%
-1.7%

Digital service tier

$13.83
$13.94
$13.05
$13.91
$13.26
$11.13
$11.07
Prior year (1/1/05)
$13.59
$13.70
$12.85
$13.52
$13.12
$11.05
$10.86
Percent change
1.7%
1.8%
1.5%
2.9%
1.1%
0.7%
2.0%
2006 price compared to Noncompetitive group
-6.4%
-0.2%
-4.9%
-20.2%
-20.6%
Sources: Attachments 2 and 3.
23.
As shown in Table 1-a, for the period between January 1, 2006 and January 1, 2007, the
average price for expanded basic service increased by 4.6 percent, from $45.18 to $47.27. Over that
period, the price of basic cable service increased by 4.2 percent, from $14.70 to $15.33, and the price of
cable programming service increased by 4.8 percent, from $30.48 to $31.94. On average, the prices of
expanded basic service in noncompetitive communities and communities relieved from rate regulation
increased by 4.3 percent and 6.1 percent, respectively, during that period, to $47.49 and $46.28.
11

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Table 1-a

Monthly Prices 2007

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Programming Service

Relieved
Second

January 1, 2007

Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator

Basic cable service tier

$15.33
$15.10
$16.37
$14.65
$16.76
$16.99
$17.08
Prior year (1/1/06)
$14.70
$14.57
$15.32
$13.71
$15.59
$16.08
$17.00
Percent change
4.2%
3.6%
6.9%
6.9%
7.6%
5.6%
0.4%

Cable programming service tier

$31.94
$32.39
$29.90
$27.94
$30.49
$30.18
$29.85
Prior year (1/1/06)
$30.48
$30.96
$28.28
$26.22
$28.89
$29.01
$27.76
Percent change
4.8%
4.6%
5.8%
6.5%
5.5%
4.0%
7.5%

Expanded basic service

$47.27
$47.49
$46.28
$42.59
$47.25
$47.17
$46.93
Prior year (1/1/06)
$45.18
$45.53
$43.60
$39.93
$44.48
$45.09
$44.77
Percent change
4.6%
4.3%
6.1%
6.7%
6.2%
4.6%
4.8%
2007 price compared to Noncompetitive group
-2.6%
-10.3%
-0.5%
-0.7%
-1.2%

Digital service tier

$13.00
$13.04
$12.82
$13.57
$12.84
$11.47
$12.58
Prior year (1/1/06)
$12.55
$12.50
$12.76
$13.28
$12.88
$11.29
$12.46
Percent change
3.6%
4.3%
0.5%
2.2%
-0.3%
1.6%
1.0%
2007 price compared to Noncompetitive group
-1.7%
4.0%
-1.6%
-12.0%
-3.6%
Sources: Attachments 2-a and 3-a.
24.
As shown in Table 1-b, for the period between January 1, 2007 and January 1, 2008, the
average price for expanded basic service increased by 5.0 percent, from $47.27 to $49.65. Over that
period, the price of basic cable service increased by 5.1 percent, from $15.33 to $16.11, and the price of
cable programming service increased by 5.0 percent, from $31.94 to $33.54. On average, the prices of
expanded basic service in noncompetitive communities and communities relieved from rate regulation
increased by 5.2 percent and 4.1 percent, respectively, during that period, to $49.97 and $48.19.
12

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Table 1-b

Monthly Prices 2008

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Programming Service

Relieved
Second

January 1, 2008

Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator

Basic cable service tier

$16.11
$15.83
$17.37
$16.06
$17.64
$17.81
$18.25
Prior year (1/1/07)
$15.33
$15.10
$16.37
$14.65
$16.76
$16.99
$17.08
Percent change
5.1%
4.8%
6.1%
9.6%
5.2%
4.8%
6.9%

Cable programming service tier

$33.54
$34.14
$30.82
$28.86
$31.23
$31.84
$31.55
Prior year (1/1/07)
$31.94
$32.39
$29.90
$27.94
$30.49
$30.18
$29.85
Percent change
5.0%
5.4%
3.1%
3.3%
2.4%
5.5%
5.7%

Expanded basic service

$49.65
$49.97
$48.19
$44.92
$48.87
$49.65
$49.80
Prior year (1/1/07)
$47.27
$47.49
$46.28
$42.59
$47.25
$47.17
$46.93
Percent change
5.0%
5.2%
4.1%
5.5%
3.4%
5.3%
6.1%
2008 price compared to Noncompetitive group
-3.6%
-10.1%
-2.2%
-0.6%
-0.3%

Digital service tier

$14.01
$14.16
$13.34
$14.27
$13.16
$12.59
$13.40
Prior year (1/1/07)
$13.00
$13.04
$12.82
$13.57
$12.84
$11.47
$12.58
Percent change
7.8%
8.6%
4.0%
5.2%
2.5%
9.7%
6.6%
2008 price compared to Noncompetitive group
-5.8%
0.8%
-7.1%
-11.1%
-5.4%
Sources: Attachments 2-b and 3-b.
25.
Tables 1, 1-a, and 1-b also show the percentage differences between prices charged for
expanded basic service by cable operators in communities relieved from rate regulation overall and in the
four subgroups of these operators, compared with prices charged by cable operators in noncompetitive
communities. As of January 1, 2006; January 1, 2007; and January 1, 2008, respectively, the prices
charged in communities relieved from rate regulation overall were 3.9 percent, 2.6 percent, and 3.6
percent lower than the prices charged in noncompetitive communities. The price difference varied by
subgroup, however. As of January 1, 2006; January 1, 2007; and January 1, 2008, respectively, prices
averaged 15.5 percent lower, 10.3 percent lower, and 10.1 percent lower for the subgroup with the
presence of a second cable operator compared to the prices that prevailed in noncompetitive communities
as of those dates. These percentage differentials were notably larger than the differentials present in the
three other competitive subgroups on those dates. For example, as of January 1, 2008, for the other three
competitive subgroups, prices were 2.2 percent lower, 0.6 percent lower, and 0.3 percent lower,
respectively, in communities deemed competitive by virtue of DBS penetration, the presence of a wireless
MVPD, and a cable operator having met the low penetration test. Small percentage differentials prevailed
for those three subgroups for January 1, 2006 and January 1, 2007.
26.
For all three years, cable prices decrease substantially when a second cable operator
enters the market. None of the other bases for findings of effective competition appears to be restraining
the level of prices to the same degree as competition from a second wire-based cable operator. Moreover,
it does not appear from these results that competition from DBS effectively constrains cable prices. In
fact, the prices charged for expanded basic service by the subgroup of communities relieved from rate
regulation on the basis of the presence of a DBS competitor were roughly similar (i.e., plus or minus less
13

Federal Communications Commission

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than one percentage point), on average, as of January 1, 2006 and January 1, 2007, than the prices
charged in noncompetitive communities. They were, however, between 2 percent and 3 percent lower as
of January 1, 2008.28

B.

Weighted Average Cable Prices

27.
Previous cable price reports have interpreted the price of expanded basic service as the
most relevant price of cable service. While we continue to report and analyze the price of expanded basic
service, for the first time we also report a new measure of cable prices: the "weighted average price of
cable television service." This price is given by the price of expanded basic service plus the price
(including equipment) of the most highly subscribed digital tier, with the digital price weighted by the
percentage of expanded basic cable subscribers that take the digital tier. The reason we do so is simple:
as of January 1, 2008, more than half of all cable subscribers purchased the most popular digital service
offered by cable systems. Digital service take rates increased from zero in 1995 to 61.0 percent of
expanded basic cable subscribers by January 2008. It therefore is important to both measure the price of
that service and analyze the impact of its purchase on the amount a household pays for cable service. The
weighted average price of cable service does just that.29
28.
The weighted average price of cable service has grown from $22.35 in 1995 to $52.26 in
2006, an increase of 133.8 percent; to $54.73 in 2007, an increase of 144.9 percent over the 1995 price;
and to $58.80 in 2008, an increase of 163.1 percent. This is more than four times faster than the increase
in prices for other goods and services as measured by the CPI. This is illustrated by Chart 3 below.


28 As shown in Tables 1, 1-a, and 1-b, average prices charged for expanded basic by operators in the DBS subgroup
were 0.8 percent higher, 0.5 percent lower, and 2.2 percent lower than the noncompetitive group, respectively, as of
January 1, 2006; January 1, 2007; and January 1, 2008.
29 In particular, it measures the average amount a household that subscribes to expanded basic service pays for
expanded basic plus digital cable services. For some households, this will be just the expanded basic price (as they
choose not to purchase a digital service). For others, it will be the expanded basic plus the digital price. The
average of these two types of households will therefore be the expanded basic price plus the digital price weighted
by the share of households that purchase digital service. This price could equally well be called the average
household expenditure on expanded basic plus digital cable services (among those households that take expanded
basic service).
14

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Chart 3

Weighted Average Cable Price and the CPI, 1995-2008

200%
Weighted Average Cable Price
2008
175%
CPI, All Items
$58.80
150%
125%
100%
75%

Percent Change

CPI (All Items)
50%
1995
25%
$22.35
0%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

Year

29.
Table 2 below gives details concerning the increase in the weighted average cable price
from 1995 to 2008. From 1995 to 2008, the price of expanded basic service increased from $22.35 to
$49.65. In 2008, the price for the basic digital tier including a converter and remote control was $14.01.30

Table 2

Weighted Average Cable Price, 1995-2008

Digital
Price Index, 1995 = 100
Expanded
Weighted
Date
Basic Price
Weighted
Price
Share
Cable Price
Expanded
Basic Price
Cable Price
Jul. 1995
$22.35
---
---
$22.35
100.0
100.0
Jul. 1996
$24.28
---
---
$24.28
108.6
108.6
Jul. 1997
$26.31
---
---
$26.31
117.7
117.7
Jul. 1998
$27.88
$10.70
1.2%
$28.01
124.7
125.3
Jul. 1999
$28.94
$9.49
5.4%
$29.45
129.5
131.8
Jul. 2000
$31.22
$8.42
8.4%
$31.93
139.7
142.9
Jul. 2001
$33.75
$11.58
17.6%
$35.79
151.0
160.1
Jul. 2002
$36.47
$10.12
27.1%
$39.21
163.2
175.4
Jan. 2003
$38.95
$10.08
33.4%
$42.32
174.3
189.4
Jan. 2004
$41.04
$10.72
39.6%
$45.29
183.6
202.6
Jan. 2005
$43.04
$12.99
41.6%
$48.44
192.6
216.7
Jan. 2006
$45.26
$13.83
47.7%
$52.26
202.5
233.8
Jan. 2007
$47.27
$13.00
52.3%
$54.73
211.5
244.9
Jan. 2008
$49.65
$14.01
61.0%
$58.80
222.1
263.1
Change, 1995-2008
122.1%
---
---
163.1%
122.1%
163.1%
Sources: Attachments 4 and 5.


30 Data for digital service were not collected prior to 1998 because that service was in a start-up phase prior to 1998.
15
















Federal Communications Commission

DA 09-53

30.
The comparison between sample groups is similar for the weighted average price of
cable service as for expanded basic. As of January 1, 2006; January 1, 2007; and January 1, 2008,
respectively, prices averaged 4.8 percent lower, 2.6 percent lower, and 4.1 percent lower in communities
relieved from rate regulation than in noncompetitive communities, and for the second cable operator
subgroup, were 14.7 percent, 9.8 percent, and 10.3 percent lower than they were in noncompetitive
communities.

Chart 4

Weighted Average Cable Price

by Basis for Finding of Effective Competition, January 1, 2006
$60.00
$52.58
$52.29
$50.75
$49.43
$44.86
$40.00
$20.00
$-

No Finding of

DBS

Wireless

Low Cable

Second

Competition

Competition

MVPD

Penetration

Cable Operator

Chart 4-a

Weighted Average Cable Price

by Basis for Finding of Effective Competition, January 1, 2007
$60.00
$55.00
$54.79
$53.90
$53.55
$49.58
$40.00
$20.00
$-

No Finding of

DBS

Wireless

Low Cable

Second

Competition

Competition

MVPD

Penetration

Cable Operator

Chart 4-b

Weighted Average Cable Price

by Basis for Finding of Effective Competition, January 1, 2008
$59.25
$57.57
$58.54
$57.94
$60.00
$53.12
$40.00
$20.00
$-

No Finding of

DBS

Wireless

Low Cable

Second

Competition

Competition

MVPD

Penetration

Cable Operator

16

Federal Communications Commission

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C.

Price Per Viewing Hour

31.
In 2005, the Commission determined that it should no longer include price per channel
data because it does not reflect actual prices offered to consumers. Cable operators do not permit
consumers to purchase channels that are included in expanded basic service on an individual basis, nor do
they provide refunds to consumers who opt to have certain channels blocked. (If cable operators did offer
consumers the option to purchase channels individually, it would be appropriate to consider the prices
charged to consumers for those channels.) Further, the use of the average rate per channel as a proxy for
quality of service measurements implies that consumers value recently added channels the same as
previously added channels. For example, the use of these data as a proxy for quality adjustments would
suggest that quality adjusted prices would be unchanged if there were a 10 percent increase in monthly
cable rates and a 10 percent increase in the number of channels; however, this does not take into account
how consumers might value the additional channels.
32.
In response to the release of the 2005 Report on Cable Industry Prices ("2005 Report"),
the National Cable & Telecommunications Association ("NCTA") sent a letter to the Chairman asking
him to disclose data showing the pricing of cable's multichannel video services on a per-channel basis.31
NCTA stated that is important to analyze prices not only on an inflation-adjusted basis but also on a
quality-adjusted basis. NCTA noted that one way to measure quality changes is to calculate price per
channel. NCTA concedes that "a per-channel analysis may be an imperfect mechanism" by which to
calculate quality-adjusted prices. NCTA recommended, rather, that changes in the quality or value of
cable services be measured based on changes in the amount of usage of the service by cable customers, or
Price Per Viewing Hour ("PPVH").32 NCTA stated that PPVH can be calculated by dividing the price of
the service by the amount of time that an average household spends watching the service. NCTA states
that, when measured in this quality-adjusted way, the real price of expanded basic cable service has
steadily declined in recent years from 28.4 cents per viewing hour in 2002 to 26.3 cents per viewing hour
in 2005.33
33.
NCTA's conclusion that prices have declined in real terms when measured using PPVH
is critically flawed. Even if PPVH were a better measure of quality-adjusted prices than price per
channel, NCTA did not calculate the PPVH correctly, erring twice in their calculations. First, NCTA
failed to include the (weighted) price of digital service in their numerator, yet digital channels are
included in Cable Viewing Hours in their denominator. Second, NCTA included the price of basic
service in the numerator, but excluded broadcast channels, which are carried on the basic service tier,
from the denominator. Correcting these errors yields the values reported here. In particular, one must
ensure that the price of the services in the numerator is matched to the viewing hours of those same
services in the denominator, and that both are measured for the same set of households. Viewing hours
reported by Nielsen Media Research are commonly split into broadcast viewing, ad-supported cable
viewing, and premium pay viewing and are reported for broadcast-only households, "Cable Plus"
households, Cable Plus with pay households (i.e., Cable Plus households that also subscribe to at least


31 NCTA letter ("Letter") of January 4, 2007 at 1 (MM Docket No. 06-266).
32 Letter at 2.
33 Letter at 3.
17

Federal Communications Commission

DA 09-53

one pay service), and all households.34 For the purposes of this report, we are most interested in ad-
supported cable viewing among cable-plus households.35
34.
The services offered by cable systems differ along similar lines. The primary networks
offered on Basic Service are broadcast networks, while the primary networks offered on cable
programming and digital service tiers are ad-supported cable networks.36 Chart 5 below decomposes the
weighted average cable price from Chart 3 into the average price of basic service and the weighted
average price of CPST plus digital service between 1997 and 2008.37 Much of the growth in the weighted
average price of cable service comes from growth in the price of CPST service coupled with growth in the
price and an increase in subscriber penetration of digital service.

Chart 5

Cable Prices, 1995 - 2008

$60
Weighted Average Cable Price
$58.80
Weighted Average CPST + Digital
$50
Basic Price
$40
$42.69
$30

Monthly Price

$20
$16.11
$10
$0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

Year

Note: In Chart 5, Weighted Average CPST + Digital and Basic Price are unavailable prior to 1997.
35.
The Price Per Viewing Hour Table below reports the values of the prices shown in Chart
5 as well as average viewing hours between 1997 and 2008 for ad-supported cable networks among Cable


34 The "Cable Plus" Nielsen universe is defined as "the households in the Total U.S. that can receive cable
programming via wired cable or other means" (Nielsen Media Research (2004), "National Television Activity
Report," Discussion Paper B).
35 Although the Cable Plus category includes satellite households, it will be a useful measure for our purposes as
long as average viewing hours are similar for satellite and cable households.
36 See, for example, Tables 5-7.
37 The weighted average price of CPST plus digital service is calculated analogously to the weighted average price
of cable service: it is the average price of CPST plus digital service with the price of digital service weighted by the
share of households that subscribe to digital service.
18

Federal Communications Commission

DA 09-53

Plus households.38 It also reports the PPVH of ad-supported cable networks, calculated as the weighted
average price (per month) of CPST plus digital services divided by the average viewing hours (per month)
of Cable Plus households.39 The table shows that while household viewing of ad-supported cable
networks has grown considerably, rising 59.4 percent between 1997 and 2008, prices for those networks
(weighted CPST + digital price tiers) have risen even faster, by 190.8 percent over the same period. As a
result, prices per viewing hour of cable networks have grown considerably, from 13.9 cents/hour in 1997
to 25.3 cents/hour in 2008, an increase of 82.4 percent.

Price Per Viewing Hour Table

1997-2008
Price Index,
Weighted
Cable
Cable
Price
Weighted
1997 = 100
Basic
CPST +
Television
Television
Per
Date
Cable
Price
Weighted
Digital
Viewing
Viewing
Viewing
Price
CPST +
Price
Hours/Week
Hours/Month
Hour
PPVH
Dig Price
Jul. 1997
$26.31
$11.63
$14.68
24.4
105.9
$0.139
100.0
100.0
Jul. 1998
$28.01
$12.06
$15.95
26.2
113.6
$0.140
108.6
101.2
Jul. 1999
$29.45
$12.58
$16.87
26.8
116.4
$0.145
114.9
104.6
Jul. 2000
$31.93
$12.84
$19.09
28.1
122.0
$0.157
130.0
112.9
Jul. 2001
$35.79
$12.84
$22.95
29.8
129.6
$0.177
156.3
127.7
Jul. 2002
$39.21
$13.11
$26.10
31.8
138.0
$0.189
177.8
136.5
Jan. 2003
$42.32
$13.45
$28.87
34.0
147.7
$0.195
196.6
141.0
Jan. 2004
$45.29
$13.80
$31.49
35.6
154.8
$0.203
214.5
146.7
Jan. 2005
$48.44
$14.30
$34.14
37.7
163.7
$0.209
232.6
150.4
Jan. 2006
$52.26
$14.59
$37.67
38.6
167.9
$0.224
256.6
161.8
Jan. 2007
$54.73
$15.33
$39.40
38.6
167.7
$0.235
268.4
169.5
Jan. 2008
$58.80
$16.11
$42.69
38.9
168.8
$0.253
290.8
182.4
Change,
1997-2008
123.5%
38.5%
190.8%
59.4%
59.4%
82.4%
190.8%
82.4%
Sources: Various price surveys; Nielsen
36.
Chart 6 summarizes trends in cable prices between 1997 and 2008 and compares them to
prices of other goods, as measured by the Consumer Price Index.40 It shows that, on an unadjusted basis,
consumers are paying 123.5 percent more for cable service in 2008 than they were paying in 1997 and
82.4 percent more on a per-viewing-hour basis. Both far exceed the 31.6 percent increase in the CPI over
the same period.


38 The viewing hours come from Nielsen by way of the Cablevision Advertising Bureau. Values from 1997 to 2001
are from Wildman, S. (2003) "Assessing Quality-Adjusted Changes in the Real Price of Basic Cable Service,"
Discussion paper, Michigan State University (citing CAB); values from 2002 to 2007 are from the CAB website at
http://www.onetvworld.org/main/cab/fasttrax/average-time-spent-with-c.shtml (accessed March 4, 2008). Values
for 2008 are, from Nielsen, the average ad-supported cable viewing among Cable Plus households for October 1,
2007 March 30, 2008.
39 Viewing hours per month were calculated as the average viewing hours per week divided by seven, times 365,
divided by 12 (i.e., converting viewing hours per week to viewing hours per month).
40 As mentioned above, data for digital service were not collected prior to 1998 because that service was in a start-up
phase prior to 1998. On that basis, we exclude 1995-1997 prices from this comparison.
19

Federal Communications Commission

DA 09-53

Chart 6

Trends in Cable Prices, 1997-2008

140%
Weighted Average Cable Price
123.5%
120%
Price Per Viewing Hour
CPI - All Items
100%
82.4%
80%
60%

Percent Increase

31.6%
40%
20%
0%
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

Year

D.

Programming Expense for Expanded Basic

37.
Tables 3, 3-a, and 3-b display information on programming expenses incurred by cable
operators related to the provision of expanded basic service, stated on an average monthly basis per
subscriber.41 These expenses include the increases in fees for existing programming as well as additional
fees for new programming added during the year. Programming expenses increased on an average
monthly basis by an estimated $0.88 per subscriber, or 6.9 percent, from 2004 to 2005; by an estimated
$1.13, or 8.3 percent, from 2005 to 2006; and by an estimated $1.40, or 9.5 percent, from 2006 to 2007.
Increases in programming expenses were equivalent to 52 percent of the overall increase in price for
expanded basic service during the year ending January 1, 2006; 54 percent during the year ending January
1, 2007; and 59 percent during the year ending January 1, 2008. These findings are illustrated in Charts 7
and 8 below.


41 Programming expense per subscriber, as reported herein, equals the difference in the monthly programming
expense per subscriber for expanded basic service, comparing year 2004 to year 2005 (shown in Table 3), year 2005
to year 2006 (shown in Table 3-a), and year 2006 to year 2007 (shown in Table 3-b). These measures are
approximations, calculated by dividing the programming cost in each year by the number of end-of-year basic cable
service subscribers, and dividing by 12 (months). The programming expense numbers are for the previous year
rather than the survey year because survey questionnaires are sent too early in the year for cable operators to be able
to provide programming expense information for the survey year.
20

Federal Communications Commission

DA 09-53

Table 3

Change in Monthly Programming Expense per Subscriber, 2004-2005

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Expanded Basic Service

Relieved
Second
2004-2005
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Programming expense, year 2005
$13.41
$13.32
$14.10
$14.83
$14.43
$11.50
$14.94
Programming expense, year 2004
$12.54
$12.46
$13.09
$13.76
$13.38
$10.75
$13.64
Change in programming expense
$0.88
$0.86
$1.02
$1.07
$1.05
$0.75
$1.30
Change in expanded basic price *
$1.70
$1.71
$1.64
$1.56
$1.56
$2.01
$1.80
Expense to price change **
52%
50%
62%
68%
67%
37%
72%
Sources: Attachment 7 and Table 1. * January 1, 2005 to January 1, 2006. ** Equals change in expense divided by change in
price. Change in expense may not equal the difference in years, due to rounding in source data.

Table 3-a

Change in Monthly Programming Expense per Subscriber, 2005-2006

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Expanded Basic Service

Relieved
Second
2005-2006
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Programming expense, year 2006
$14.74
$14.73
$14.77
$15.39
$14.91
$12.39
$15.51
Programming expense, year 2005
$13.61
$13.60
$13.64
$14.00
$13.79
$11.40
$15.41
Change in programming expense
$1.13
$1.13
$1.13
$1.39
$1.12
$0.99
$0.10
Change in expanded basic price *
$2.09
$1.96
$2.68
$2.66
$2.78
$2.08
$2.16
Expense to price change **
54%
58%
42%
52%
40%
48%
5%
Sources: Attachment 7-a and Table 1-a. * January 1, 2006 to January 1, 2007. ** Equals change in expense divided by change
in price. Change in expense may not equal the difference in years, due to rounding in source data.

Table 3-b

Change in Monthly Programming Expense per Subscriber, 2006-2007

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Expanded Basic Service

Relieved
Second
2006-2007
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Programming expense, year 2007
$16.14
$16.09
$16.34
$17.21
$16.40
$14.05
$16.77
Programming expense, year 2006
$14.74
$14.73
$14.77
$15.39
$14.91
$12.39
$15.51
Change in programming expense
$1.40
$1.36
$1.57
$1.82
$1.49
$1.66
$1.27
Change in expanded basic price *
$2.38
$2.48
$1.91
$2.33
$1.62
$2.48
$2.87
Expense to price change **
59%
55%
82%
78%
93%
67%
44%
Sources: Attachment 7-b and Table 1-b. * January 1, 2007 to January 1, 2008. ** Equals change in expense divided by change
in price. Change in expense may not equal the difference in years, due to rounding in source data.
21







Federal Communications Commission

DA 09-53

Chart 7

Percentage of Price Change Attributable to Increase in Programming Expense

Year 2005

Year 2006

Year 2007

52%
54%
59%




Source: Tables 3, 3-a, and 3-b.

Chart 8

Percentage Increase in Programming Expense

Expanded Basic Service

10.0%
9.5%
8.3%
8.0%
6.9%
6.0%
4.0%
2.0%
0.0%

Year 2005

Year 2006

Year 2007

E.

Family Tier

38.
The surveys sought data on programming offered in a so-called "family tier," which was
defined as a package of programming that is marketed by cable operators as a substitute for the larger,
most highly subscribed cable programming service tier. A number of cable operators have begun offering
such a tier as an alternative targeted toward subscribers who may object to some of the programming on
the most highly subscribed tier. Based on the survey responses, the typical family tier includes some, but
not all, of the channels carried on the most highly subscribed tier. Further, because the family tier is
almost always a digital tier, it typically includes some, but not all, of the channels carried on digital tiers.
The typical family tier requires use of a digital converter and remote control or other digital gateway.
Some cable operators bundle this digital equipment in a package with the family tier, while in other cases
equipment is leased separately. Thus, because the family tier and equipment prices cannot always be
shown as separate components, the family tier prices shown below include the price of associated
equipment.
22

Federal Communications Commission

DA 09-53

39.
As of July 1, 2006, 46 percent of all basic cable subscribers were offered a family tier of
programming. As of January 1, 2007 and January 1, 2008, 45 percent and 48 percent, respectively, of
subscribers were offered that tier. Of the 46 percent of subscribers who were offered a family tier on
January 1, 2006, less than one percent of those subscribers actually subscribed to a family tier.42 The
number of subscribers to the family tier was still less than one percent as of January 1, 2007 and January
1, 2008. Tables 4, 4-a, and 4-b display the average prices subscribers must pay to purchase a family tier
package, including the family programming tier, equipment, and basic cable service. As of July 1, 2006,
the average monthly price for this service package was $32.20; as of January 1, 2007, the average
monthly price was $31.15; and as of January 1, 2008 the average monthly price was $31.92. On average,
operators offered 39.3 channels, including the channels on the basic service tier, in this package as of July
1, 2006, and also 39.3 channels as of January 1, 2008. (The survey did not collect channel information
for family tiers for 2007.) By comparison, as of January 1, 2006, for example, the average price for
expanded basic service was $45.26 (Table 1), excluding equipment, and operators offered an average of
71.0 channels (Table 6) for that service. Thus, the price of the family tier (including basic cable service
and equipment) was only 28.8 percent less as of January 1, 2006 than the price of expanded basic service
on that date, but the number of channels offered was 44.6 percent less. On January 1, 2008 the price of
the family tier (including basic cable service and equipment) was 32.5 percent less than the price of
expanded basic service on that date, while the number of channels offered was 45.9 percent less. In
addition, family tiers generally exclude some of the most expensive programming, like ESPN, that is
included in the cable programming service tier.

Table 4

Family Tier of Programming

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2006

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Family tier & equipment price
$19.62
$19.65
$19.34
$19.96
$20.02
$17.93
$19.11
Basic cable service tier price
$12.58
$12.39
$14.25
$12.24
$13.79
$16.54
$14.45
Total price
$32.20
$32.04
$33.66
$32.21
$33.99
$34.47
$33.56
Family tier channels
14.4
14.4
15.0
14.8
15.4
14.7
15.4
Basic cable service channels
24.9
25.1
23.3
25.4
21.7
23.5
22.1
Total channels
39.3
39.4
38.3
40.2
37.1
38.2
37.5
Source: 2006 survey.


42 While this low percentage may in part reflect the newness of these offerings, an examination of the data indicate
that they generally lack sports programming like ESPN and thus, many families may not consider the family tier to
be a good alternative to the cable programming tier.
23

Federal Communications Commission

DA 09-53

Table 4-a

Family Tier of Programming

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2007

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Family tier & equipment price
$18.35
$18.42
$17.87
$18.48
$19.05
$15.05
$18.71
Basic cable service tier price
$12.80
$12.62
$13.97
$12.70
$13.13
$16.68
$13.75
Total price
$31.15
$31.04
$31.84
$31.18
$32.18
$31.73
$32.46
Source: 2007/2008 survey.

Table 4-b

Family Tier of Programming

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2008

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Family tier & equipment price
$18.33
$18.42
$17.73
$18.69
$18.82
$14.76
$16.09
Basic cable service tier price
$13.59
$13.36
$15.17
$14.02
$14.46
$17.67
$14.99
Total price
$31.92
$31.78
$32.90
$32.71
$33.27
$32.44
$31.08
Family tier channels
14.3
14.3
14.2
16.0
13.4
14.2
11.9
Basic cable service tier channels
25.0
24.8
26.8
24.5
30.8
21.1
28.9
Total channels
39.3
39.1
41.0
40.0
44.2
35.3
40.8
Source: 2007/2008 survey.

F.

Programming Sold on an Individual Basis

40.
The surveys asked whether cable operators sold programming networks on an individual
basis as of July 1, 2006; January 1, 2007; and January 1, 2008.43 Overall, 46 percent, 37 percent, and 39
percent of subscribers in our samples were offered one or more channels on an individual basis as of July
1, 2006; January 1, 2007; and January 1, 2008, respectively. The vast majority of these individual
channel offerings are international networks produced outside the United States that would otherwise
likely be found on a themed mini tier, such as a Spanish language tier. In addition, cable operators
generally charged a price for these channels that is consistent with prices charged for premium channels.
The survey found that, as of July 1, 2006, cable operators offered an average of 6.3 such channels,
calculated over all operators offering channels on an individual basis, at an average monthly price of


43 The questionnaire asked operators "As of 1/01/07 and 1/01/08, did you offer any networks on an individual
basis?" The accompanying instructions stated: "If yes, complete Columns G through K in the Channel Lineup
Section of this questionnaire. Do not report cable network `multiplexes' (for example, HBO multiplex) but do
report HBO, for example, if sold as a stand-alone channel." Some operators reported multiplexed networks, as well
as seasonal or part-time networks. The information about these multiplexes of networks was not included in our
presentation of results.
24

Federal Communications Commission

DA 09-53

$13.29 per channel.44 As of January 1, 2007, 6.1 channels were offered individually at an average
monthly price of $13.14 for each channel; as of January 1, 2008, operators offered 6.0 channels
individually at an average monthly price of $13.16 for each channel.
41.
As of July 1, 2006, cable operators in seven communities in the survey (less than one
percent of the sample) offered on an individual basis networks that are generally included in the standard
expanded basic service programming tier, or on a digital tier. These networks were offered for less than
$5.00 each. In January 2007, cable operators in 23 communities offered such networks individually; in
January 2008, cable operators in 22 communities offered such networks individually. No operator offered
more than two such networks. The specific networks identified by these cable operators as being offered
on an individual basis were the Golf Channel, Superstation WGN, Turner Classic Movies ("TCM"), and
TBS in 2006, and, in addition, FSN South, Court TV, MoviePlex, Independent Film Channel, and AMC,
as of January 1, 2007 and January 1, 2008.45 Prices ranged from $1.00 to $4.95 per channel in all years.
On average, cable operators offered these channels at a price of $2.12, $3.48, and $3.59, respectively, in
2006, 2007, and 2008. The 2006 survey questionnaire did not ask what cable services a subscriber must
have purchased in order to be able to buy these individual networks. Follow-up information from the
specific respondents, however, indicated that subscribers must purchase basic service before they may
add individual channels, and for channels offered as a digital signal, subscribers must also obtain a digital
box. This is generally true as of January 1, 2007 and January 1, 2008, but in some instances subscribers
also were required to purchase expanded basic service in order to purchase networks individually.

G.

Distribution of Channels

42.
Tables 5 and 5-b show the average number of channels offered on the basic cable
service tier as of January 1, 2006 and January 1, 2008. (There is no Table 5-a because the survey did not
collect channel information for 2007.) Basic cable service averaged 24.8 channels as of January 1, 2006
and 26.7 channels as of January 1, 2008. The number of channels offered varied only slightly among the
sample groups. The tables divide these channels into four categories: (1) local broadcast stations; (2)
public, educational, and governmental access ("PEG") channels; (3) commercial leased access channels;
and (4) all other channels.

Table 5

Distribution of Channels on the Basic Cable Service Tier

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Category

January 1, 2006

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Local broadcast stations
12.2
12.4
10.8
11.1
10.6
10.4
12.8
PEG channels
3.3
3.3
2.7
2.5
2.9
2.5
2.4
Commercial leased access
0.7
0.7
0.8
0.7
0.9
0.7
0.3
Other channels
8.6
8.5
9.8
9.1
10.3
10.0
5.7
Total
24.8
24.9
24.0
23.4
24.7
23.5
21.2
Source: Attachment 8.


44 This average was calculated over all operators offering channels on an individual basis, on a per operator basis.
45 Cable operators not included in our survey may offer other networks on an individual basis.
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Federal Communications Commission

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Table 5-b

Distribution of Channels on the Basic Cable Service Tier

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Category

January 1, 2008

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Local broadcast stations
12.7
12.7
12.9
11.4
13.4
13.7
11.6
PEG channels
2.8
2.8
2.8
2.8
3.0
2.2
1.7
Commercial leased access
0.7
0.6
0.9
0.6
1.1
1.0
0.9
Other channels
10.0
9.8
10.9
9.9
12.3
5.9
6.9
Total
26.7
26.8
25.9
25.3
26.8
22.7
23.3
Source: Attachment 8-b.
43.
Tables 6, 6-a, and 6-b display the average number of expanded basic channels offered to
subscribers as of January 1, 2006; January 1, 2007; and January 1, 2008 by the programming service tier:
(1) basic cable service and (2) cable programming service. As of January 1, 2006, cable operators offered
an average of 24.8 basic cable service channels and 46.2 cable programming service channels, for an
average total of 71.0 expanded basic channels. These 71.0 channels represent an increase of less than one
percent (0.7 percent) compared with the number of expanded basic channels offered a year earlier. As of
January 1, 2007 and January 1, 2008, respectively, the number of expanded basic channels had increased
to 72.6 and 72.8 channels. As of January 1, 2006, January 1, 2007, and January 1, 2008, respectively,
expanded basic service averaged 70.6 channels, 72.5 channels, and 72.8 channels in noncompetitive
communities, and 74.0, 73.0, and 73.0 channels in communities relieved from rate regulation.

Table 6

Expanded Basic Service Channels

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2006

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Basic cable service tier
24.8
24.9
24.0
23.4
24.7
23.5
21.2
Cable programming service tier
46.2
45.7
50.0
51.5
49.2
50.2
49.6
Expanded basic service
71.0
70.6
74.0
74.9
73.9
73.7
70.8
Prior year (1/1/05)
70.5
70.0
73.9
74.1
74.1
73.7
70.5
Percent Change
0.7%
0.8%
0.2%
1.0%
-0.3%
0.1%
0.4%
Source: Attachment 9.
26

Federal Communications Commission

DA 09-53

Table 6-a

Expanded Basic Service Channels

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2007

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Basic cable service tier
26.3
26.3
25.9
24.6
26.9
23.7
23.1
Cable programming service tier
46.3
46.1
47.2
50.9
45.4
50.2
47.8
Expanded basic service
72.6
72.5
73.0
75.5
72.3
73.9
70.8
Prior year (1/1/05)
71.5
71.1
73.4
74.5
73.3
73.6
70.8
Percent Change
1.5%
2.0%
-0.5%
1.4%
-1.4%
0.5%
0.0%
Source: Attachment 9-a.

Table 6-b

Expanded Basic Service Channels

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2008

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Basic cable service tier
26.7
26.8
25.9
25.3
26.8
22.7
23.3
Cable programming service tier
46.2
46.0
47.1
50.8
45.6
49.1
46.9
Expanded basic service
72.8
72.8
73.0
76.1
72.4
71.8
70.1
Prior year (1/1/05)
72.6
72.5
73.0
75.5
72.3
73.9
70.8
Percent Change
0.4%
0.5%
-0.1%
0.7%
0.2%
-2.9%
-1.0%
Source: Attachment 9-b.
44.
Tables 7, 7-a, and 7-b show the number of channels offered to subscribers as of January
1, 2006; January 1, 2007; and January 1, 2008 on the most-highly subscribed digital tier. The tables
divide digital channels into two categories: (1) high definition ("HD") broadcast simulcasts, and (2)
channels on the most highly subscribed digital tier. As of January 1, 2006; January 1, 2007; and January
1, 2008, service on the most-highly subscribed digital tier averaged 40.6, 37.5, and 40.4 channels,
respectively, and varied only slightly between the two sample groups.
27

Federal Communications Commission

DA 09-53

Table 7

Digital Channels

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2006

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
HD local broadcast stations
4.3
4.3
4.1
4.6
3.5
5.2
2.5
Digital Tier
40.6
41.0
37.7
38.4
39.7
29.6
35.4
Source: Attachment 10. Note: HD local broadcast refer to stations that can be viewed in both standard and HD format. Digital
tier refers to the most popular (highly subscribed) digital service tier.

Table 7-a

Digital Channels

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2007

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
HD local broadcast stations
5.0
4.9
5.4
5.6
5.2
6.5
3.6
Digital Tier
37.5
37.1
39.3
40.5
39.7
35.7
38.5
Source: Attachment 10-a. Note: HD local broadcast refer to stations that can be viewed in both standard and HD format.
Digital tier refers to the most popular (highly subscribed) digital service tier.

Table 7-b

Digital Channels

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2008

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
HD local broadcast stations
5.6
5.5
6.1
6.2
6.0
7.3
3.9
Digital Tier
40.4
40.1
41.4
42.0
42.1
37.8
37.7
Source: Attachment 10-b. Note: HD local broadcast refer to stations that can be viewed in both standard and HD format.
Digital tier refers to the most popular (highly subscribed) digital service tier.

H.

Subscriber Equipment

45.
Tables 8, 8-a, and 8-b show that over the 12 months ending January 1, 2006; January 1,
2007; and January 1, 2008, the average monthly price charged for leased analog equipment to receive
programming services (consisting of an addressable set-top converter and remote control unit) increased
by 5.4 percent, declined by 2.5 percent, and declined by 9.9 percent, respectively, to $4.86, $4.28, and
$3.86. For digital equipment, prices increased by 2.7 percent, declined by 0.6 percent, and declined by
4.1 percent, to $5.19, $5.38, and $5.16, respectively, as of the same three dates. For HD equipment,
prices rose by 2.0 percent, by 3.2 percent, and 4.5 percent, to $7.11, $7.86, and $8.22. The monthly price
to lease a CableCARD increased by an average of 3.0 percent to $1.19 in the year ending January 1, 2006;
28

Federal Communications Commission

DA 09-53

by 13.3 percent to $1.25 in the year ending January 1, 2007; and by 15.3 percent to $1.44 in the year
ending January 1, 2008.

Table 8

Monthly Equipment Prices

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2006

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Analog equipment
$4.86
$4.81
$5.22
$4.46
$5.54
$5.29
$5.20
Change from prior year
5.4%
5.4%
5.7%
3.8%
7.5%
-1.6%
19.7%
Digital equipment
$5.19
$5.14
$5.55
$5.85
$5.48
$5.40
$4.96
Change from prior year
2.7%
2.3%
5.5%
13.1%
3.7%
0.1%
1.8%
HD equipment
$7.11
$7.08
$7.31
$7.75
$7.45
$6.09
$7.71
Change from prior year
2.0%
2.1%
0.9%
0.1%
1.4%
0.3%
-2.4%
CableCARD
$1.19
$1.14
$1.56
$1.76
$1.64
$0.94
$1.76
Change from prior year
3.0%
3.7%
-1.4%
-6.8%
0.0%
3.0%
0.3%
Sources: Attachment 11.

Table 8-a

Monthly Equipment Prices

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2007

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Analog equipment
$4.28
$4.17
$4.81
$4.60
$4.86
$5.01
$3.81
Change from prior year
-2.5%
-1.7%
-6.7%
-0.7%
-9.0%
-6.1%
-2.1%
Digital equipment
$5.38
$5.34
$5.58
$5.84
$5.45
$6.47
$5.20
Change from prior year
-0.6%
-0.3%
-2.1%
-3.0%
-1.7%
0.0%
-3.9%
HD equipment
$7.86
$7.85
$7.93
$7.98
$8.21
$6.20
$7.99
Change from prior year
3.2%
3.2%
3.0%
0.3%
4.1%
0.0%
0.3%
CableCARD
$1.25
$1.16
$1.65
$1.84
$1.71
$1.09
$1.26
Change from prior year
13.3%
13.9%
9.4%
9.5%
9.4%
7.3%
0.9%
Sources: Attachment 11-a.
29

Federal Communications Commission

DA 09-53

Table 8-b

Monthly Equipment Prices

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2008

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Analog equipment
$3.86
$3.75
$4.36
$4.48
$4.49
$3.63
$3.33
Change from prior year
-9.9%
-9.9%
-9.4%
-2.6%
-7.7%
-27.5%
-12.7%
Digital equipment
$5.16
$5.10
$5.43
$5.97
$5.19
$6.48
$5.19
Change from prior year
-4.1%
-4.5%
-2.7%
2.2%
-4.8%
0.1%
-0.2%
HD equipment
$8.22
$8.26
$8.06
$8.03
$8.27
$6.95
$8.04
Change from prior year
4.5%
5.2%
1.7%
0.7%
0.7%
12.2%
0.6%
CableCARD
$1.44
$1.33
$1.90
$2.08
$1.95
$1.42
$1.47
Change from prior year
15.3%
15.4%
15.4%
13.3%
14.3%
30.6%
17.2%
Sources: Attachment 11-b.

I.

Service Installation Charges

46.
Tables 9, 9-a, and 9-b display the nonrecurring charges that cable television subscribers
may incur for service installation. As of January 1, 2006; January 1, 2007; and January 1, 2008, the
average charge to install cable service was $45.96, $45.97, and $45.11, respectively, in a residence not
previously wired for cable, and $32.47, $32.89, and $32.68 in a pre-wired residence (excluding any
promotional discounts). Subscribers were charged $28.67, $28.89, and $28.91, respectively, on average,
for service reconnection. The average charge to install a CableCARD was $20.47, $22.56, and $23.04,
respectively, for an existing customer and $22.24, $26.51, and $27.07 for a new customer as of the same
three dates.

Table 9

Service Installation Charges

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2006

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Unwired residence
$45.96
$45.99
$45.75
$42.50
$46.01
$49.72
$50.18
Change from prior year
-0.3%
-0.5%
1.1%
-1.3%
1.8%
2.5%
1.8%
Pre-wired residence
$32.47
$32.47
$32.49
$31.60
$33.12
$31.29
$35.54
Change from prior year
-0.3%
-0.4%
0.1%
-0.3%
1.0%
-2.5%
1.4%
Service reconnection
$28.67
$28.60
$29.12
$26.52
$30.30
$29.45
$28.79
Change from prior year
-0.1%
-0.1%
-0.2%
-1.5%
0.3%
-0.1%
-0.3%
CableCARD, existing subscriber
$20.47
$20.77
$18.30
$16.58
$19.72
$16.57
$16.34
Change from prior year
4.3%
4.3%
4.2%
10.6%
1.3%
3.9%
18.7%
CableCARD, new subscriber
$22.24
$22.59
$19.72
$15.87
$22.59
$16.57
$17.41
Change from prior year
4.9%
5.1%
3.4%
16.1%
-0.7%
3.9%
13.1%
Sources: Attachment 12.
30

Federal Communications Commission

DA 09-53

Table 9-a

Service Installation Charges

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2007

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Unwired residence
$45.97
$45.84
$46.56
$44.09
$46.68
$50.82
$46.23
Change from prior year
1.2%
0.8%
3.0%
2.5%
3.8%
1.6%
-0.3%
Pre-wired residence
$32.89
$32.80
$33.33
$31.80
$34.27
$30.66
$33.03
Change from prior year
1.8%
1.9%
1.3%
2.5%
1.3%
-2.5%
0.8%
Service reconnection
$28.89
$29.01
$28.38
$27.20
$29.18
$25.66
$28.56
Change from prior year
2.6%
2.4%
4.1%
6.4%
5.6%
-6.8%
-1.9%
CableCARD, existing subscriber
$22.56
$22.15
$24.37
$19.81
$25.91
$27.48
$15.65
Change from prior year
3.8%
2.3%
10.1%
8.4%
10.3%
10.0%
4.3%
CableCARD, new subscriber
$26.51
$25.76
$29.86
$21.94
$33.00
$31.63
$16.30
Change from prior year
1.6%
-0.6%
10.5%
7.7%
12.5%
1.3%
-0.1%
Sources: Attachment 12-a.

Table 9-b

Service Installation Charges

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2008

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator
Unwired residence
$45.11
$44.86
$46.27
$43.99
$45.80
$53.13
$47.10
Change from prior year
-1.9%
-2.2%
-0.6%
-0.2%
-1.9%
4.5%
1.9%
Pre-wired residence
$32.68
$32.36
$34.11
$31.68
$34.89
$34.27
$33.83
Change from prior year
-0.7%
-1.3%
2.4%
-0.4%
1.8%
11.8%
2.4%
Service reconnection
$28.91
$28.84
$29.20
$27.45
$29.66
$29.03
$30.82
Change from prior year
0.0%
-0.6%
2.9%
0.9%
1.6%
13.1%
7.9%
CableCARD, existing subscriber
$23.04
$22.63
$24.86
$21.26
$25.63
$31.27
$15.40
Change from prior year
2.1%
2.1%
2.0%
7.3%
-1.1%
13.8%
-1.6%
CableCARD, new subscriber
$27.07
$26.29
$30.53
$23.68
$32.79
$35.97
$16.82
Change from prior year
2.1%
2.1%
2.3%
7.9%
-0.6%
13.7%
3.2%
Sources: Attachment 12-b.

J.

System Operating Capacity

47.
Tables 10, 10-a, and 10-b show that capacity averaged 749 MHz, 748 MHz, and 759
MHz, as of January 1, 2006; January 1, 2007; and January 1, 2008. This, in turn, represented 1.8 percent,
-0.1 percent, and 1.5 percent increases over the previous year, respectively. By sample group, operators
in noncompetitive communities had average capacity of 747 MHz, 744 MHz, and 757 MHz (changes of
1.8 percent, -0.4 percent, and 1.6 percent), and operators in communities relieved from rate regulation had
average capacity of 765 MHz, 766 MHz, and 772 MHz (increases of 1.4 percent, 0.1 percent, and 0.9
percent) as of the same three dates, respectively.
31

Federal Communications Commission

DA 09-53

Table 10

System Operating Capacity (MHz)

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Date

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
January 1, 2006
749
747
765
759
770
761
735
January 1, 2005
736
734
754
756
751
758
729
Percent change
1.8%
1.8%
1.4%
0.4%
2.5%
0.3%
0.9%
Source: Attachment 13.

Table 10-a

System Operating Capacity (MHz)

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Date

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
January 1, 2007
748
744
766
766
768
764
740
January 1, 2006
749
747
765
759
770
761
735
Percent change
-0.1%
-0.4%
0.1%
0.9%
-0.3%
0.4%
0.6%
Source: Attachment 13-a.

Table 10-b

System Operating Capacity (MHz)

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

Date

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
January 1, 2008
759
757
772
774
776
764
740
January 1, 2007
748
744
766
766
768
764
740
Percent change
1.5%
1.6%
0.9%
1.0%
1.0%
0.0%
0.0%
Source: Attachment 13-b.
48.
Tables 11, 11-a, and 11-b show that as of January 1, 2006; January 1, 2007; and January
1, 2008, respectively, 25.4 percent, 25.0 percent, and 30.5 percent of subscribers were served by a system
with capacity greater than 750 MHz. About 60 percent of all subscribers (63.9 percent as of January 1,
2006; 63.6 percent as of January 1, 2007; and 59.1 percent as of January 1, 2008) were served by systems
that operated at 750 MHz. Only 10.8 percent, 11.4 percent, and 10.4 percent of subscribers were served
by systems with operating capacity below 750 MHz on January 1, 2006; January 1, 2007; and January 1,
2008, respectively.
32

Federal Communications Commission

DA 09-53

Table 11

Percentage of Subscribers by Capacity of Cable System

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2006

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Above 750 MHz
25.4%
25.5%
24.9%
13.7%
34.4%
9.7%
28.6%
750 MHz
63.9%
63.3%
68.0%
82.1%
56.0%
90.3%
46.4%
331 - 749 MHz
8.7%
8.9%
6.7%
4.2%
8.8%
0.0%
25.0%
220 - 330 MHz
2.1%
2.3%
0.4%
0.0%
0.8%
0.0%
0.0%
Source: Attachment 13.

Table 11-a

Percentage of Subscribers by Capacity of Cable System

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2007

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Above 750 MHz
25.0%
25.0%
25.5%
24.2%
28.2%
12.1%
23.5%
750 MHz
63.6%
62.4%
69.0%
69.1%
66.7%
87.9%
58.8%
331 - 749 MHz
10.3%
11.4%
5.4%
6.6%
5.1%
0.0%
16.2%
220 - 330 MHz
1.1%
1.3%
0.1%
0.0%
0.0%
0.0%
1.5%
Source: Attachment 13-a.

Table 11-b

Percentage of Subscribers by Capacity of Cable System

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2008

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Above 750 MHz
30.5%
29.4%
35.8%
32.9%
41.0%
15.2%
23.5%
750 MHz
59.1%
59.1%
59.0%
61.9%
53.8%
84.8%
58.8%
331 - 749 MHz
9.7%
10.6%
5.2%
5.2%
5.1%
0.0%
16.2%
220 - 330 MHz
0.7%
0.9%
0.1%
0.0%
0.0%
0.0%
1.5%
Source: Attachment 13-b.

K.

Service Availability and Subscription

49.
Tables 12, 12-a, and 12-b display the percentages of cable subscribers that were offered
advanced services as of January 1, 2006; January 1, 2007; and January 1, 2008, and the percentages that
subscribed to those services at each of those dates. Table 12 shows, for example, that as of January 1,
2006, 98.3 percent of subscribers to basic cable service could purchase digital video programming and
41.8 percent subscribed to that service. For HD video programming, 91.9 percent of subscribers were
33

Federal Communications Commission

DA 09-53

offered that service and 6.7 percent subscribed. Further, 85.5 percent of subscribers were offered one or
more HD simulcasts of local broadcast stations;46 96.9 percent of subscribers were offered Internet access,
and 34.8 percent subscribed; and 61.4 percent were offered cable telephony, with 3.3 percent of
subscribers taking circuit-switched telephony and another 3.4 percent taking voice over Internet protocol
("VOIP") telephony. As shown in Table 12, subscribers in communities relieved from rate regulation
were generally offered these additional services at slightly higher rates than subscribers in noncompetitive
communities. Similar percentages prevailed as of January 1, 2007 and January 1, 2008, as shown in
Tables 12-a and 12-b, although the percentage of subscribers offered telephony service increased
significantly over that period, rising from 61.4 percent as of January 1, 2006 to 88.8 percent as of January
1, 2008. The percentage subscribing to telephony service also increased significantly over that period,
particularly for VOIP service, which rose from 3.4 percent as of January 1, 2006 to 14.4 percent as of
January 1, 2008.

Table 12

Availability of and Subscribers to Various Cable Services

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2006

Relieved
Second
Non-
Wireless
LP
Overall
from Rate
Cable
DBS
Competitive
MVPD
Test
Regulation
Operator

Percent of Subscribers to Basic Cable Service Who Have Access to Additional Services

Digital video programming
98.3%
98.1%
99.7%
99.1%
100.0%
100.0%
98.2%
HD video programming
91.9%
91.7%
93.4%
96.3%
91.2%
100.0%
73.2%
HD local broadcast simulcast
85.5%
85.3%
87.3%
92.6%
82.4%
100.0%
62.5%
Internet access
96.9%
96.6%
99.1%
98.1%
100.0%
100.0%
85.7%
Telephony
61.4%
61.8%
58.8%
70.4%
47.2%
83.9%
39.3%

Percent of Subscribers to Basic Cable Service Who Subscribe to Additional Services

Digital video programming
41.8%
41.6%
43.5%
43.3%
42.6%
46.3%
46.0%
HD video programming
6.7%
6.8%
6.3%
6.3%
5.8%
8.7%
4.8%
Internet access
34.8%
34.6%
36.5%
41.7%
33.5%
39.9%
27.4%
Circuit switched telephony
3.3%
3.3%
3.5%
7.9%
1.1%
3.8%
5.4%
VOIP telephony
3.4%
3.4%
3.1%
4.0%
2.8%
3.0%
0.4%
Source: Attachments 14 and 15.


46 Subscriber information for this service is not available.
34

Federal Communications Commission

DA 09-53

Table 12-a

Availability of and Subscribers to Various Cable Services

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2007

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator

Percent of Subscribers to Basic Cable Service Who Have Access to Additional Services

Digital video programming
97.9%
97.9%
98.1%
98.8%
97.4%
100.0%
100.0%
HD video programming
91.2%
90.7%
93.7%
94.2%
93.6%
97.0%
86.8%
HD local broadcast simulcast
88.1%
88.1%
88.1%
93.8%
85.9%
97.0%
75.0%
Internet access
96.8%
96.6%
97.9%
99.2%
97.4%
100.0%
94.1%
Telephony
75.9%
75.4%
78.3%
88.9%
72.7%
97.0%
66.2%

Percent of Subscribers to Basic Cable Service Who Subscribe to Additional Services

Digital video programming
46.2%
45.6%
48.8%
49.9%
47.6%
54.3%
48.7%
HD video programming
10.9%
10.7%
11.9%
11.3%
11.8%
15.8%
6.2%
Internet access
39.6%
39.3%
40.5%
46.3%
38.6%
42.6%
36.8%
Circuit switched telephony
3.5%
3.3%
4.3%
9.2%
2.7%
4.3%
3.3%
VOIP telephony
7.5%
7.8%
6.5%
10.4%
5.1%
8.2%
5.3%
Source: Attachments 14-a and 15-a.

Table 12-b

Availability of and Subscribers to Various Cable Services

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2008

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator

Availability of Service as a Percent of Cable TV Subscribers

Digital video programming
98.1%
98.1%
98.3%
99.6%
97.4%
100.0%
100.0%
HD video programming
92.5%
91.7%
96.0%
95.5%
96.2%
100.0%
88.2%
HD local broadcast simulcast
91.3%
90.7%
94.1%
96.1%
93.6%
100.0%
79.4%
Internet access
97.2%
97.0%
97.9%
99.2%
97.4%
100.0%
94.1%
Telephony
88.8%
88.3%
91.1%
94.0%
89.7%
100.0%
77.9%

Subscribers as a Percent of Cable TV Subscribers to Whom the Particular Service is Available

Digital video programming
54.4%
54.0%
56.3%
56.7%
54.8%
65.3%
55.1%
HD video programming
17.3%
17.2%
17.8%
18.2%
17.5%
23.1%
9.4%
Internet access
44.6%
44.4%
45.9%
51.5%
43.9%
49.0%
41.6%
Circuit switched telephony
3.0%
2.8%
3.7%
9.3%
2.0%
4.3%
3.2%
VOIP telephony
14.4%
14.8%
12.5%
17.1%
11.0%
13.7%
11.0%
Source: Attachments 14-b and 15-b.

L.

Receipts from Cable Services

50.
With the growth of bundled service packages, for the first time, the questionnaires asked
cable operators to report for each system the average bill paid by residential customers for the specified
services, including taxes and fees. The surveys asked cable operators to provide figures on gross receipts
35

Federal Communications Commission

DA 09-53

for the months of January 2006, January 2007, and January 2008, in addition to the list prices for each
package. The questionnaires focused on three groups of residential basic cable service subscribers: (1)
those that take only one service video programming ("video only"); (2) those that take two services
video and Internet access ("double play"); and (3) those that take all three services video, Internet
access, and telephony ("triple play"). We intend to collect information on video only, double play, and
triple play each year on a going-forward basis.47 The information is presented below, in Tables 13, 13a,
and 13b.
51.
Looking first at the average customer across all subgroups, Table 13, for example,
shows that for the month of January 2006, the average monthly bill was $69.63 per customer for all
services purchased, a figure $24.37 higher than the average price of $45.26 for expanded basic cable
service shown in Table 1. In January 2007, the average monthly bill was $76.85 per customer for all
services purchased, and in January 2008, the average monthly bill was $84.59. This was $29.58 higher
than the average price of $47.27 for expanded basic cable service in 2007 and $34.94 higher than
expanded basic cable service in 2008. The difference is due to customer revenues from other
programming services such as digital tiers, premium and pay per view programming, Internet access,
telephony services, and taxes and fees. Many cable operators have begun offering double-play and triple-
play services. While the majority of cable customers subscribed only to video programming service on
January 1, 2006 (60.6 percent) and on January 1, 2007 (53.8 percent), only 47.2 percent of cable
subscribers continued to do so as of January 1, 2008. These video-only customers paid an average
monthly bill of $52.25 in January 2006, $54.50 in January 2007, and $57.99 in January 2008. Double-
play customers who subscribed to both video programming and Internet access services, but not
telephony, in January 2006 accounted for 32.6 percent of all customers and paid a monthly average bill of
$92.38; in January 2007, such subscribers accounted for 31.0 percent of all customers and paid a monthly
average bill of $95.93; and in January 2008, such subscribers accounted for 30.0 percent of all customers
and paid a monthly average bill of $98.85. Although relatively few customers subscribed to a triple-play
package video programming, Internet access, and telephony as of January 1, 2006, this service grew
rapidly between 2006 and 2008. Triple-play subscribers accounted for only 6.8 percent of all customers
as of January 2006 and paid an average bill of $128.43 per month for those services. In January 2007,
such subscribers accounted for 10.1 percent of all customers and paid an average bill of $138.52 per
month; by January 2008, such subscribers accounted for 17.5 percent of all customers and paid an average
bill of $135.41 per month.
52.
As shown in these tables, overall the average bill tends to be higher than the package
price, but not consistently across all packages and sample groups. The fact that an average bill may be
either higher or lower than the price for a particular service reflects factors that are not discernable from
our survey data. Receipts could be higher than the package price due to taxes, franchise fees, customers
ordering features not included in the package such as HD service, and additional receipts from premium
and pay-per-view programming. Offsetting these factors would be short-term promotional discounts to
induce customers to migrate to a package service, and also the extent to which equipment, features, and
premium programming are bundled with the package.


47
These surveys did not collect separate information on double-play subscribers who take video and telephony
only. However, these customers and revenues are reflected in the average receipts of all subscribers shown in the
tables.
36

Federal Communications Commission

DA 09-53

Table 13

Average Monthly Receipts Per Subscribers

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2006

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Average receipts, all subscribers
$69.63
$69.90
$67.57
$70.34
$66.73
$66.81
$60.69
Receipts, video only service
$52.25
$52.35
$51.48
$49.69
$50.59
$56.54
$50.14
Percent of subscribers
60.6%
60.7%
59.4%
53.3%
63.5%
54.7%
66.5%
Expanded basic price
$45.26
$45.48
$43.70
$38.45
$45.83
$45.20
$44.73
Receipts, double play package
$92.38
$93.02
$87.27
$85.22
$86.69
$91.97
$80.60
Percent of subscribers
32.6%
32.6%
33.0%
34.2%
31.6%
37.1%
26.6%
Double play price
$91.47
$91.30
$92.51
$81.62
$98.59
$90.00
$93.67
Receipts, triple play package
$128.43
$129.76
$117.41
$122.39
$107.52
$133.45
$93.53
Percent of subscribers
6.8%
6.7%
7.5%
12.5%
4.9%
8.2%
6.9%
Triple play price
$113.85
$113.67
$115.20
$112.42
$121.00
$107.56
$118.40
Source: 2006 survey. Note: Double play and triple play prices are as of July 2006.

Table 13-a

Average Monthly Receipts Per Subscribers

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2007

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Average receipts, all subscribers
$76.85
$77.07
$75.81
$82.25
$72.40
$85.22
$70.52
Receipts, video only service
$54.50
$54.76
$53.32
$51.97
$53.17
$58.90
$47.88
Percent of subscribers
53.8%
54.3%
51.5%
47.2%
52.6%
51.8%
54.1%
Expanded basic price
$47.27
$47.49
$46.28
$42.59
$47.25
$47.17
$46.93
Receipts, double play package
$95.93
$96.29
$94.30
$99.00
$90.50
$107.35
$91.70
Percent of subscribers
31.0%
30.6%
32.6%
32.2%
32.4%
33.7%
35.6%
Double play price
$87.47
$87.14
$88.80
$83.46
$90.03
$89.71
$94.42
Receipts, triple play package
$138.52
$140.32
$130.65
$126.39
$131.03
$138.78
$120.18
Percent of subscribers
10.1%
10.2%
9.7%
17.3%
7.0%
12.2%
6.4%
Triple play price
$117.68
$117.95
$116.52
$111.09
$119.82
$111.14
$119.69
Source: 2007/2008 survey.
37

Federal Communications Commission

DA 09-53

Table 13-b

Average Monthly Receipts Per Subscribers

Subgroups of Communities

Sample Group

Relieved from Rate Regulation

January 1, 2008

Relieved
Second
Non-
Wireless
Overall
from Rate
Cable
DBS
LP Test
Competitive
MVPD
Regulation
Operator
Average receipts, all subscribers
$84.59
$84.72
$84.01
$90.78
$80.83
$92.61
$79.16
Receipts, video only service
$57.99
$57.95
$58.16
$56.88
$58.40
$61.44
$52.85
Percent of subscribers
47.2%
47.6%
45.4%
40.6%
46.7%
44.6%
50.2%
Expanded basic price
$49.65
$49.97
$48.19
$44.92
$48.87
$49.65
$49.80
Receipts, double play package
$98.85
$98.79
$99.11
$103.22
$96.23
$108.73
$98.63
Percent of subscribers
30.0%
29.5%
32.3%
32.3%
32.0%
32.9%
35.9%
Double play price
$88.63
$88.71
$88.30
$86.54
$90.17
$78.56
$93.87
Receipts, triple play package
$135.41
$137.75
$125.42
$126.95
$123.44
$137.43
$114.93
Percent of subscribers
17.5%
17.9%
15.9%
23.7%
13.3%
19.8%
10.1%
Triple play price
$118.00
$118.31
$116.70
$112.77
$118.58
$112.18
$120.62
Source: 2007/2008 survey.
53.
The data reflect some variations in customer payments between the competitive and
noncompetitive groups, as well as variations within the competitive group according to the basis for the
finding of effective competition. In particular, for January 2006, for example, the average gross receipts
derived from triple-play customers was $117.41 for the group relieved from rate regulation and $129.76
approximately 10.5 percent higher for the noncompetitive group. Among the subgroups of operators
relieved from rate regulation, gross receipts from the triple play were higher in communities where the
effective competition finding was based on wireless MVPD ($133.45) or the presence of a second cable
operator ($122.39) compared to $107.52 for the DBS subgroup, but subscriber uptake of the triple play
was also higher for these subgroups (8.2 percent and 12.5 percent, respectively) compared to 4.9 percent
for the DBS subgroup. The data for 2007 and 2008 reflect similar variations in customer payments
between the competitive and noncompetitive groups, as well as variations within the competitive group
according to the basis for the finding of effective competition.

IV.

ECONOMETRIC ANALYSIS

54.
In Appendix B of this report, we use econometric analysis to examine the data collected.
As in the 2005 Report's findings, we estimate the effect of market structure on cable prices and use a
"structure-conduct-performance" paradigm as the basis for analysis. Consistent with prior findings, the
results show that cable prices tend to be higher in local markets where cable operators have a larger share
of the MVPD market than in areas where cable operators have a smaller share of the market. The
relationship may indicate the use of market power by dominant firms to raise prices or may reflect higher
costs to serve those markets. In markets with two competing cable operators, results show a tendency for
the incumbent operator to undercut the overbuild rival's price. The presence of a rival cable operator
tends to reduce the incumbent's price by 14.1 percent compared to markets without a second cable
operator, all other things being held constant. Complete results of this analysis are described in Appendix
B.
38

Federal Communications Commission

DA 09-53

V.

CONCLUSIONS

55.
Cable systems found to face effective competition continue to exhibit lower prices than
cable systems that serve communities in which no such finding has been made. As in previous years, the
competitive differential varied, with the largest differential occurring in communities with a second cable
operator. The average monthly price of expanded basic service increased by 3.9 percent over the 12
months ending January 1, 2006; by 4.6 percent over the 12 months ending January 1, 2007; and by 5.0
percent over the 12 months ending January 1, 2008. Overall, from 1995 to 2008, the price of expanded
basic service has grown from $22.35 to $49.65, an increase of 122.1 percent, compared with an increase
in general inflation of 38.4 percent.

VI.

ORDERING CLAUSE

56.
IT IS ORDERED that this Report be issued pursuant to authority contained in Section
623(k) of the Communications Act of 1934, as amended, 47 U.S.C. 543(k).
FEDERAL COMMUNICATIONS COMMISSION
Monica Shah Desai
Chief, Media Bureau
39

Federal Communications Commission

DA 09-53

Attachment 1-a

2006 Survey Overview

Number of

Percent of

Survey

Number of

Observations

Sample Groups and Subgroups

Cable

Questionnaires

Observations

Selected for

Subscribers

Completed

Sampling

Sample Groups Overall

Noncompetitive communities
31,743
87.70%
458
434
Communities relieved from rate regulation
2,055
12.30%
334
320
Total
33,798
100.00%
792
754

Noncompetitive Communities

(1)

Grouped by Size of Cable System Serving Community

50,001 or more subscribers (very large)
8,861
61.30%
265
261
25,001 - 50,000 subscribers (large)
3,748
14.30%
60
58
10,001 - 25,000 subscribers (medium)
4,411
10.80%
49
48
1,001 - 10,000 subscribers (small)
8,130
10.50%
49
44
1,000 or fewer subscribers (very small)
6593
3.10%
35
23
Total
31743
100.00%
458
434

Communities Relieved from Rate Regulation

(2)

Grouped by Basis For Finding of Effective Competition

Sufficient level of DBS subscribers
1,443
55.10%
127
125
Presence of second cable operator (incumbents)
165
20.20%
58
54
Presence of second cable operator (rivals)
156
6.90%
58
54
In signal range of a wireless MVPD
137
15.20%
31
31
Cable operator met low penetration test
154
2.60%
60
56
Total
2,055
100.00%
334
320
Sources: 2006 survey; FCC Form 322, Cable Community Registration, filings pursuant to 47 C.F.R 76.1801;
FCC Form-325, Annual Cable Operator Report, filings pursuant to 47 C.F.R 76.403; and FCC "Effective
Competition" orders pursuant to 47 U.S.C. 543(a)(2) and 47 C.F.R. 76.916(a).
(1) Communities without a finding of effective competition.
(2) Communities where the FCC has made a finding of effective competition.
40

Federal Communications Commission

DA 09-53

Attachment 1-b

2007/2008 Survey Overview

Number of

Percent of

Survey

Number of

Observations

Sample Groups and Subgroups

Cable

Questionnaires

Observations

Selected for

Subscribers

Completed

Sampling

Sample Groups Overall

Noncompetitive communities
30,352
81.90%
412
388
Communities relieved from rate regulation
3,205
18.10%
300
286
Total
33,557
100.00%
712
674

Noncompetitive Communities

(1)

Grouped by Size of Cable System Serving Community

75,001 or more subscribers (very large)
7,907
51.28%
167
166
25,001 - 75,000 subscribers (large)
5,634
24.79%
82
82
10,001 - 25,000 subscribers (medium)
4,294
10.99%
45
44
1,001 - 10,000 subscribers (small)
7,492
10.38%
62
55
1,000 or fewer subscribers (very small)
5,025
2.56%
56
41
Total
30,352
100.00%
412
388

Communities Relieved from Rate Regulation

(2)

Grouped by Basis For Finding of Effective Competition

Sufficient level of DBS subscribers
2,343
64.09%
80
78
Presence of second cable operator (incumbents)
165
16.02%
55
55
Presence of second cable operator (rivals)
158
4.42%
55
52
In signal range of a wireless MVPD
154
10.50%
33
33
Cable operator met low penetration test
385
4.97%
77
68
Total
3,205
100.00%
300
286
Sources: 2007/2008 survey; FCC Form 322, Cable Community Registration, filings pursuant to 47 C.F.R
76.1801; FCC Form-325, Annual Cable Operator Report, filings pursuant to 47 C.F.R 76.403; and FCC
"Effective Competition" orders pursuant to 47 U.S.C. 543(a)(2) and 47 C.F.R. 76.916(a).
(1) Communities without a finding of effective competition.
(2) Communities where the FCC has made a finding of effective competition.
41

Federal Communications Commission

DA 09-53

Attachment 2

Average Monthly Price

January 1, 2006

January 1, 2005

Sample Group

Programming Service Tier

Std.

Std.

N

Mean

N

Mean

Error

Error

Basic cable service
754
$14.59
0.219
754
$14.20
0.215
Sample groups
Cable programming service
754
$30.67
0.276
754
$29.36
0.277
overall
Expanded basic service
754
$45.26
0.162
754
$43.56
0.162
Expanded basic subscribers (%)
754
87.8%
0.324
752
88.0%
0.325
Basic cable service
434
$14.52
0.247
434
$14.14
0.242
Noncompetitive
Cable programming service
434
$30.96
0.311
434
$29.63
0.312
Communities
Expanded basic service
434
$45.48
0.182
434
$43.77
0.183
Expanded basic subscribers (%)
434
87.8%
0.362
432
87.9%
0.363
Basic cable service
320
$15.09
0.260
320
$14.59
0.290
Communities
Cable programming service
320
$28.62
0.328
320
$27.48
0.346
relieved from rate
Expanded basic service
320
$43.70
0.222
320
$42.07
0.212
regulation
Expanded basic subscribers (%)
320
88.4%
0.536
320
88.4%
0.521
Basic cable service
108
$13.07
0.401
108
$12.89
0.382
Second cable
Cable programming service
108
$25.38
0.642
108
$23.99
0.635
operator subgroup
Expanded basic service
108
$38.45
0.547
108
$36.89
0.510
(overall)
Expanded basic subscribers (%)
108
91.7%
0.582
108
91.2%
0.591
Basic cable service
54
$12.77
0.463
54
$12.42
0.424
Second cable
Cable programming service
54
$25.39
0.805
54
$24.37
0.772
operator subgroup
Expanded basic service
54
$38.17
0.706
54
$36.79
0.656
(incumbents)
Expanded basic subscribers (%)
54
91.1%
0.672
54
90.9%
0.701
Basic cable service
54
$13.94
0.799
54
$14.28
0.842
Second cable
Cable programming service
54
$25.34
0.898
54
$22.88
1.049
operator subgroup
Expanded basic service
54
$39.28
0.588
54
$37.16
0.573
(rivals)
Expanded basic subscribers (%)
54
93.3%
1.160
54
92.2%
1.084
Basic cable service
125
$15.81
0.419
125
$15.19
0.484
Cable programming service
125
$30.01
0.492
125
$29.08
0.538
DBS subgroup
Expanded basic service
125
$45.83
0.288
125
$44.27
0.284
Expanded basic subscribers (%)
125
86.5%
0.897
125
86.4%
0.874
Basic cable service
31
$15.96
0.296
31
$15.32
0.309
Wireless MVPD
Cable programming service
31
$29.24
0.382
31
$27.86
0.263
subgroup
Expanded basic service
31
$45.20
0.287
31
$43.18
0.233
Expanded basic subscribers (%)
31
89.4%
0.867
31
90.1%
0.752
Basic cable service
56
$15.65
0.703
56
$15.20
0.763
Low penetration
Cable programming service
56
$29.07
0.780
56
$27.72
0.915
test subgroup
Expanded basic service
56
$44.73
0.504
56
$42.93
0.503
Expanded basic subscribers (%)
56
89.2%
1.130
56
88.9%
1.141
Source: 2006 survey.
42

Federal Communications Commission

DA 09-53

Attachment 2-a

Average Monthly Price

January 1, 2007

January 1, 2006

Sample Group

Programming Service Tier

Std.

Std.

N

Mean

N

Mean

Error

Error

Basic cable service
670
$15.33
0.257
626
$14.70
0.266
Sample groups
Cable programming service
670
$31.94
0.337
626
$30.48
0.341
overall
Expanded basic service
670
$47.27
0.188
626
$45.18
0.186
Expanded basic subscribers (%)
661
88.7%
0.288
590
88.0%
0.318
Basic cable service
384
$15.10
0.299
357
$14.57
0.308
Noncompetitive
Cable programming service
384
$32.39
0.390
357
$30.96
0.392
Communities
Expanded basic service
384
$47.49
0.216
357
$45.53
0.214
Expanded basic subscribers (%)
378
88.6%
0.323
337
88.1%
0.328
Basic cable service
286
$16.37
0.437
269
$15.32
0.458
Communities
Cable programming service
286
$29.90
0.595
269
$28.28
0.620
relieved from rate
Expanded basic service
286
$46.28
0.356
269
$43.60
0.343
regulation
Expanded basic subscribers (%)
283
88.8%
0.631
253
87.7%
0.956
Basic cable service
107
$14.65
0.505
99
$13.71
0.532
Second cable
Cable programming service
107
$27.94
0.756
99
$26.22
0.845
operator subgroup
Expanded basic service
107
$42.59
0.678
99
$39.93
0.686
(overall)
Expanded basic subscribers (%)
105
92.0%
0.508
98
91.3%
0.535
Basic cable service
55
$13.71
0.454
54
$13.26
0.592
Second cable
Cable programming service
55
$29.05
0.847
54
$26.98
0.984
operator subgroup
Expanded basic service
55
$42.77
0.831
54
$40.24
0.830
(incumbents)
Expanded basic subscribers (%)
55
91.0%
0.598
53
90.4%
0.619
Basic cable service
52
$18.07
1.661
45
$15.56
1.216
Second cable
Cable programming service
52
$23.88
1.673
45
$23.09
1.507
operator subgroup
Expanded basic service
52
$41.95
0.859
45
$38.65
0.795
(rivals)
Expanded basic subscribers (%)
50
95.8%
0.885
45
95.2%
1.005
Basic cable service
78
$16.76
0.654
70
$15.59
0.700
Cable programming service
78
$30.49
0.888
70
$28.89
0.941
DBS subgroup
Expanded basic service
78
$47.25
0.503
70
$44.48
0.488
Expanded basic subscribers (%)
78
87.4%
0.963
62
85.6%
1.574
Basic cable service
33
$16.99
0.498
32
$16.08
0.522
Wireless MVPD
Cable programming service
33
$30.18
0.622
32
$29.01
0.613
subgroup
Expanded basic service
33
$47.17
0.531
32
$45.09
0.496
Expanded basic subscribers (%)
33
90.7%
0.590
32
90.6%
0.529
Basic cable service
68
$17.08
0.917
68
$17.00
1.008
Low penetration
Cable programming service
68
$29.85
1.005
68
$27.76
1.017
test subgroup
Expanded basic service
68
$46.93
0.490
68
$44.77
0.491
Expanded basic subscribers (%)
67
90.6%
0.784
61
88.9%
1.009
Source: 2007/2008 survey.
43

Federal Communications Commission

DA 09-53

Attachment 2-b

Average Monthly Price

January 1, 2008

January 1, 2007

Sample Group

Programming Service Tier

Std.

Std.

N

Mean

N

Mean

Error

Error

Basic cable service
674
$16.11
0.266
670
$15.33
0.257
Sample groups
Cable programming service
674
$33.54
0.355
670
$31.94
0.337
overall
Expanded basic service
674
$49.65
0.211
670
$47.27
0.188
Expanded basic subscribers (%)
671
89.5%
0.279
661
88.7%
0.288
Basic cable service
388
$15.83
0.309
384
$15.10
0.299
Noncompetitive
Cable programming service
388
$34.14
0.412
384
$32.39
0.390
Communities
Expanded basic service
388
$49.97
0.243
384
$47.49
0.216
Expanded basic subscribers (%)
386
89.4%
0.311
378
88.6%
0.323
Basic cable service
286
$17.37
0.449
286
$16.37
0.437
Communities
Cable programming service
286
$30.82
0.602
286
$29.90
0.595
relieved from
Expanded basic service
286
$48.19
0.383
286
$46.28
0.356
rate regulation
Expanded basic subscribers (%)
285
89.7%
0.625
283
88.8%
0.631
Basic cable service
107
$16.06
0.560
107
$14.65
0.505
Second cable
operator
Cable programming service
107
$28.86
0.749
107
$27.94
0.756
subgroup
Expanded basic service
107
$44.92
0.713
107
$42.59
0.678
(overall)
Expanded basic subscribers (%)
107
92.5%
0.485
105
92.0%
0.508
Basic cable service
55
$15.23
0.518
55
$13.71
0.454
Second cable
operator
Cable programming service
55
$29.81
0.824
55
$29.05
0.847
subgroup
Expanded basic service
55
$45.04
0.880
55
$42.77
0.831
(incumbents)
Expanded basic subscribers (%)
55
91.6%
0.574
55
91.0%
0.598
Basic cable service
52
$19.06
1.782
52
$18.07
1.661
Second cable
Cable programming service
52
$25.44
1.752
52
$23.88
1.673
operator
Expanded basic service
52
$44.49
0.833
52
$41.95
0.859
subgroup (rivals)
Expanded basic subscribers (%)
52
95.5%
0.838
50
95.8%
0.885
Basic cable service
78
$17.64
0.670
78
$16.76
0.654
Cable programming service
78
$31.23
0.901
78
$30.49
0.888
DBS subgroup
Expanded basic service
78
$48.87
0.545
78
$47.25
0.503
Expanded basic subscribers (%)
78
88.4%
0.956
78
87.4%
0.963
Basic cable service
33
$17.81
0.485
33
$16.99
0.498
Wireless MVPD
Cable programming service
33
$31.84
0.538
33
$30.18
0.622
subgroup
Expanded basic service
33
$49.65
0.502
33
$47.17
0.531
Expanded basic subscribers (%)
33
91.4%
0.556
33
90.7%
0.590
Basic cable service
68
$18.25
0.836
68
$17.08
0.917
Low penetration
Cable programming service
68
$31.55
0.951
68
$29.85
1.005
test subgroup
Expanded basic service
68
$49.80
0.564
68
$46.93
0.490
Expanded basic subscribers (%)
67
91.1%
0.734
67
90.6%
0.784
Source: 2007/2008 survey.
44

Federal Communications Commission

DA 09-53

Attachment 3

Digital Price and Weighted Average Cable Price

Weighted Average

Digital Subscriber Shares

(1)

Digital Price

(2)

Cable Price

(3)

Sample Group

Date

Digital to

Digital

Std.

Std.

N

Expanded

N

Mean

N

Mean

to Basic

Error

Error

Basic

1/1/06
747
41.8%
47.7%
727
$13.83
0.187
720
$52.26
0.223
Sample groups overall
1/1/05
764
37.3%
42.9%
724
$13.59
0.176
$48.44
Noncompetitive
1/1/06
429
41.6%
47.5%
416
$13.94
0.211
411
$52.58
0.251
communities
1/1/05
484
37.1%
42.6%
413
$13.70
0.199
Communities relieved
1/1/06
318
43.5%
49.3%
311
$13.05
0.232
309
$50.03
0.312
from rate regulation
1/1/05
280
39.9%
45.3%
311
$12.85
0.234
Second cable operator
1/1/06
106
43.3%
47.5%
103
$13.91
0.354
101
$44.86
0.643
subgroup (overall)
1/1/05
111
39.8%
44.3%
103
$13.52
0.374
Second cable operator
1/1/06
54
46.8%
51.6%
53
$13.18
0.414
53
$44.84
0.819
(incumbents)
1/1/05
56
40.8%
45.7%
53
$12.69
0.445
Second cable operator 1/1/06
52
32.8%
35.2%
50
$16.18
0.676
48
$44.91
0.633
(rivals) (4)
1/1/05
55
37.0%
40.2%
50
$16.12
0.671
1/1/06
125
42.6%
49.6%
125
$13.26
0.367
125
$52.29
0.455
DBS subgroup
1/1/05
124
39.6%
46.9%
125
$13.12
0.366
Wireless MVPD
1/1/06
31
46.3%
51.4%
31
$11.13
0.347
31
$50.75
0.426
subgroup
1/1/05
27
38.6%
52.5%
31
$11.05
0.364
Low penetration test
1/1/06
56
46.0%
51.1%
52
$11.07
0.639
52
$49.43
0.605
subgroup
1/1/05
18
54.0%
61.4%
52
$10.86
0.603
(1) Sources: 2006 survey and 2005 survey. These shares are the number of digital subscribers as a percentage of,
respectively, all cable TV subscribers (basic subscribers) and Cable TV subscribers that take expanded basic service.
In calculating the averages, if a community was not offered digital service, the digital share equaled 0.
(2) Source: 2006 survey. This is the average price charged by operators who offer a digital tier. The price is for
the most-highly subscribed digital tier and the first digital converter and remote control.
(3) Source: See Attachment 5, which also describes the calculation. As explained in Attachment 5, only the overall
average and not the subgroup averages were calculated for year 2005.
(4) This subgroup is comprised of relatively few communities whose composition changes from year to year. The
decline in digital shares, 2005 to 2006, primarily represents a difference in the composition of communities
randomly selected in 2005 survey and 2006 survey, and not discontinuance of digital service by subscribers.
45

Federal Communications Commission

DA 09-53

Attachment 3-a

Digital Price and Weighted Average Cable Price

Weighted Average

Digital Subscribers

(1)

Digital Price

(2)

Cable Price

(3)

Sample Group

Date

Digital

Digital to

Std.

Std.

N

to

Expanded

N

Mean

N

Mean

Error

Error

Basic

Basic

1/1/07
660
46.2%
52.3%
622
$13.00
0.139
610
$54.73
0.216
Sample groups overall
1/1/06
747
41.8%
47.7%
576
$12.55
0.154
720
$52.26
0.223
Noncompetitive
1/1/07
379
45.6%
51.6%
347
$13.04
0.163
341
$55.00
0.252
communities
1/1/06
429
41.6%
47.5%
322
$12.50
0.178
411
$52.58
0.251
Communities relieved
1/1/07
281
48.8%
55.4%
275
$12.82
0.225
269
$53.58
0.356
from rate regulation
1/1/06
318
43.5%
49.3%
254
$12.76
0.261
309
$50.03
0.312
Second cable operator
1/1/07
102
49.9%
54.6%
99
$13.57
0.318
94
$49.58
0.759
subgroup (overall)
1/1/06
106
43.3%
47.5%
89
$13.28
0.301
101
$44.86
0.643
Second cable operator
1/1/07
55
50.5%
55.9%
55
$12.76
0.357
55
$49.81
0.894
subgroup (incumbents)
1/1/06
54
46.8%
51.6%
54
$12.84
0.338
53
$44.84
0.819
Second cable operator
1/1/07
47
47.3%
49.4%
44
$17.03
0.697
39
$48.49
0.960
subgroup (rivals)
1/1/06
52
32.8%
35.2%
35
$15.63
0.613
48
$44.91
0.633
1/1/07
78
47.6%
55.1%
75
$12.84
0.328
75
$54.79
0.493
DBS subgroup
1/1/06
125
42.6%
49.6%
66
$12.88
0.400
125
$52.29
0.455
Wireless MVPD
1/1/07
33
54.3%
59.9%
33
$11.47
0.431
33
$53.90
0.537
subgroup
1/1/06
31
46.3%
51.4%
32
$11.29
0.439
31
$50.75
0.426
Low penetration test
1/1/07
68
48.7%
53.8%
68
$12.58
0.471
67
$53.55
0.518
subgroup
1/1/06
56
46.0%
51.1%
67
$12.46
0.469
52
$49.43
0.605
(1) Sources: 2007/2008 survey and 2006 survey. These shares are the number of digital subscribers as a percentage
of, respectively, cable TV subscribers (basic subscribers) and those basic subscribers that also take expanded basic
service. In calculating these averages, if a community was not offered digital service, the digital share equaled 0.
(2) Source: 2007/2008 survey. This is the average price charged by operators who offer a digital tier. The price is
for the most-highly subscribed digital tier and the first digital converter and remote control.
(3) Source: See Attachment 5, which also describes the calculation.
46

Federal Communications Commission

DA 09-53

Attachment 3-b

Digital Price and Weighted Average Cable Price

Weighted Average

Digital Subscribers

(1)

Digital Price

(2)

Cable Price

(3)

Sample Group

Date

Digital Digital to

Std.

Std.

N

to

Expanded

N

Mean

N

Mean

Error

Error

Basic

Basic

1/1/08
671
54.4%
61.0%
634
$14.01
0.139
629
$58.80
0.279
Sample groups overall
1/1/07
660
46.2%
52.3%
622
$13.00
0.139
610
$54.73
0.216
Noncompetitive
1/1/08
388
54.0%
60.6%
356
$14.16
0.161
355
$59.25
0.327
communities
1/1/07
379
45.6%
51.6%
347
$13.04
0.163
341
$55.00
0.252
Communities relieved
1/1/08
283
56.3%
63.2%
278
$13.34
0.242
274
$56.80
0.440
from rate regulation
1/1/07
281
48.8%
55.4%
275
$12.82
0.225
269
$53.58
0.356
Second cable operator
1/1/08
104
56.7%
61.6%
101
$14.27
0.359
98
$53.12
0.859
subgroup (overall)
1/1/07
102
49.9%
54.6%
99
$13.57
0.318
94
$49.58
0.759
Second cable operator
1/1/08
55
57.4%
62.9%
55
$13.33
0.395
55
$53.39
1.023
subgroup (incumbents)
1/1/07
55
50.5%
55.9%
55
$12.76
0.357
55
$49.81
0.894
Second cable operator
1/1/08
49
54.0%
56.4%
46
$18.12
0.858
43
$51.93
1.140
subgroup (rivals)
1/1/07
47
47.3%
49.4%
44
$17.03
0.697
39
$48.49
0.960
1/1/08
78
54.8%
62.5%
76
$13.16
0.351
76
$57.57
0.623
DBS subgroup
1/1/07
78
47.6%
55.1%
75
$12.84
0.328
75
$54.79
0.493
Wireless MVPD
1/1/08
33
65.3%
71.8%
33
$12.59
0.462
33
$58.54
0.557
subgroup
1/1/07
33
54.3%
59.9%
33
$11.47
0.431
33
$53.90
0.537
Low penetration test
1/1/08
68
55.1%
60.7%
68
$13.40
0.437
67
$57.94
0.668
subgroup
1/1/07
68
48.7%
53.8%
68
$12.58
0.471
67
$53.55
0.518
(1) Source: 2007/2008 survey. These shares are the number of digital subscribers as a percentage of, respectively,
cable TV subscribers (basic subscribers) and basic subscribers that also take expanded basic service. In calculating
these averages, if a community was not offered digital service, the digital share equaled 0.
(2) Source: 2007/2008 survey. This is the average price charged by operators who offer a digital tier. The price is
for the most-highly subscribed digital tier and the first digital converter and remote control.
(3) Source: See Attachment 5, which also describes the calculation.
47

Federal Communications Commission

DA 09-53

Attachment 4

Averages for 1995-2008

(1)

Inflation

Expanded Basic

Consumer Price

Basic

Adjusted Cable

Service

Index

(3)

Cable

CPST

Capacity

Price

(4)

Date

Service

(2)
in MHz

Less

Less

Tier

All

All

Price

Channels

Food &

Food &

Items

Items

Energy

Energy

Jul. 1995
---
---
$22.35
44.0
---
100.0
100.0
$22.35
$22.35
Jul. 1996
---
---
$24.28
47.0
---
103.0
102.7
$23.58
$23.63
Jul. 1997
---
---
$26.31
49.4
---
105.2
105.2
$25.00
$25.01
Jul. 1998
$12.06
$15.82
$27.88
50.1
---
107.0
107.6
$26.05
$25.92
Jul. 1999
$12.58
$16.36
$28.94
51.1
534
109.3
109.8
$26.47
$26.36
Jul. 2000
$12.84
$18.38
$31.22
54.8
623
113.3
112.5
$27.55
$27.74
Jul. 2001
$12.84
$20.91
$33.75
59.4
652
116.4
115.6
$29.00
$29.20
Jul. 2002 (5)
$14.45
$22.02
$36.47
62.7
694
118.1
118.1
$30.88
$30.87
Jan. 2003
$13.45
$25.50
$38.95
67.5
---
119.1
119.1
$32.69
$32.72
Jan. 2004
$13.80
$27.24
$41.04
70.3
734
121.4
120.4
$33.79
$34.08
Jan. 2005
$14.30
$28.74
$43.04
70.5
736
125.0
123.2
$34.42
$34.95
Jan. 2006 (6)
$14.59
$30.67
$45.26
71.0
749
130.0
125.8
$34.81
$35.99
Jan. 2007
$15.33
$31.94
$47.27
72.6
748
132.7
129.1
$35.61
$36.61
Jan. 2008
$16.11
$33.54
$49.65
72.8
759
138.4
132.3
$35.87
$37.53
Change from 1995-2008
122.1%
65.6%
---
38.4%
32.3%
60.5%
67.9%
Sources: Statistical Report on Average Rates for Basic Service, Cable Programming Service, and Equipment, 12
FCC Rcd 3239 (1997) ("1997 survey"); 14 FCC Rcd 8331 (1999) ("1998 survey"); 15 FCC Rcd 10927 (2000)
("1999 survey"); 16 FCC Rcd 4346 (2001) ("2000 survey"); 17 FCC Rcd 6301 (2002) ("2001 survey"); 18 FCC
Rcd 13284 (2003) ("2002 survey"); 20 FCC Rcd 2718 (2005) ("2004 survey"); 21 FCC Rcd 15087 (2006) ("2005
survey"); 2006 survey; and 2007/2008 survey. Sources by year: 1995-1997 (1997 survey); 1998 (1998 survey);
1999 (1999 survey) except capacity (2004 survey data); 2000 (2000 survey); 2001 (2001 survey); July 2002 (2002
survey); 2003-2004 (2004 survey); 2005 (2005 survey); 2006 (2006 survey); and 2007-2008 (2007/2008 survey).
(1) Averages in this attachment are composite subscriber-weighted averages of noncompetitive communities and
communities relieved from rate regulation, except prices and channels, 1995-2000, and capacity, 2000-2001, which
are noncompetitive averages as the composite averages were not included in the survey reports. Missing data
indicate we did not survey the metric that year. For 1995, only a combined programming and equipment price was
reported and, thus, the 1995 expanded basic price was calculated by subtracting an estimate of equipment price.
(2) The price of the most highly subscribed cable programming service tier ("CPST").
(3) Sources: Bureau of Labor Statistics , Consumer Price Index, All Urban Consumers, U.S. City Average, Not
Seasonally Adjusted, base 1982-84=100, Series CUUR0000SA0 (All Items) and CUUR0000SA0L1E (All Items
Less Food and Energy), extracted from www.bls.gov (June 5, 2008), rebased to July 1995 = 100.
(4) These prices are in 1995 dollars, calculated by dividing expanded basic price by CPI multiplied by 100.
(5) January 2002 prices were also sampled, and these sample prices averaged $13.06 for the basic cable service tier,
$23.01 for the CPST, and $36.12 for expanded basic service. In January 2002, the CPI (July 1995=100) was 116.1
(All Items) and 116.8 (All Items Less Food and Energy).
(6) Because each survey randomly samples a different group of communities, 2006 averages calculated from the
2006 survey will not necessarily match 2006 averages calculated from 2006/2007 survey. For example, the
expanded basic price based on the 2006 survey equals $45.26 (shown in this attachment and Attachment 2) and
equals $45.18 on the basis of the 2007/2008 sample (shown in Attachment 2-a).
48

Federal Communications Commission

DA 09-53

Attachment 5

Weighted Average Cable Price, 1995-2008

Price Index (1995=100)

Weighted

Expanded

Digital

Digital

Average

Weighted

Date

Expanded

Basic Price

Price

(1)

Share

(2)

Cable Price

Average

Basic

(3)

Cable

Price

Price

Jul. 1995
$22.35
---
---
$22.35
100.0
100.0
Jul. 1996
$24.28
---
---
$24.28
108.6
108.6
Jul. 1997
$26.31
---
---
$26.31
117.7
117.7
Jul. 1998
$27.88
$10.70
1.2%
$28.01
124.7
125.3
Jul. 1999
$28.94
$9.49
5.4%
$29.45
129.5
131.8
Jul. 2000
$31.22
$8.42
8.4%
$31.93
139.7
142.9
Jul. 2001
$33.75
$11.58
17.6%
$35.79
151.0
160.1
Jul. 2002
$36.47
$10.12
27.1%
$39.21
163.2
175.4
Jan. 2003
$38.95
$10.08
33.4%
$42.32
174.3
189.4
Jan. 2004
$41.04
$10.72
39.6%
$45.29
183.6
202.6
Jan. 2005 (4)
$43.04
$12.99
41.6%
$48.44
192.6
216.7
Jan. 2006
$45.26
$13.83
47.7%
$52.26
202.5
233.8
Jan. 2007
$47.27
$13.00
52.3%
$54.73
211.5
244.9
Jan. 2008
$49.65
$14.01
61.0%
$58.80
222.1
263.1
Change, 1995-2008
122.1%
---
---
163.1%
122.1%
163.1%
Sources: See Attachment 4.
(1) Digital price consists of the price to receive the most-highly subscribed digital tier and the first set of digital
equipment (a digital converter and remote control). In some survey reports, the reported price is described as digital
programming, which is presumed to include a converter and remote control as well as programming. Prior to 1998,
digital service was in the start-up phase, and thus survey data were not collected.
(2) Digital share (Sdig/eb) equals the ratio of digital to expanded basic subscribers, equal to Sdig/b divided by Seb/b
(not shown in this table) which, respectively, equal the ratio of digital to basic subscribers and expanded basic to
basic subscribers. The average digital share is this attachment includes cable operators who offer and do not offer
digital service, and in the latter case the digital share equals 0.
(3) This column equals Peb + (Pdig x Sdig/eb), where Peb equals expanded basic price, Pdig equals digital price,
and Sdig/eb equals digital share. Expanded basic service is typically a prerequisite to ordering a digital tier, and
weighting digital price reflects that not all expanded basic subscribers order a digital tier. Consistent with previous
survey reports, the expanded basic price is not weighted by the percent of expanded basic to basic subscribers. The
averages are based on communities where a digital tier is offered.
(4) For 2005 and prior years, the weighted average cable price is based on national averages of components of the
formula shown in the note above. Sdig/b was not collected for survey years 1998-2000 and 2004. For 1998, it was
calculated by dividing 160,000 digital subscribers by 14.1 million basic subscribers represented in the sample. For
1999, it was calculated by dividing digital 634,102 subscribers by 13.1 million basic subscribers represented. The
2000 value is from 2001 survey and the 2004 value is the mid-point between 2002 and 2004 values. For 1998-2005,
Sdig/b equals 1.1% (1998), 4.8% (1999), 7.5% (2000), 15.7% (2001), 24.1% (2002), 29.7% (2003), 35.2% (2004),
and 37.0% (2005). Seb/b is not available in all reports, but has varied between 88% and 90% in years reported, and
was set constant at 89% across years 1998-2005. After 2005, the weighted average cable prices were constructed
for each survey respondent prior to calculating the national average. The two methods typically produce slightly
different results.
49

Federal Communications Commission

DA 09-53

Attachment 6

Averages for 1995-2008

by Sample Group

Cable

System

Basic Cable

Expanded Basic Service

Date

Programming

Capacity

Service Tier

Service Tier

Price
Channels
(MHz)

Noncompetitive Communities

July 1995
---
---
$22.35
44.0
---
July 1996
---
---
$24.28
47.0
---
July 1997
---
---
$26.31
49.4
---
July 1998
$12.06
$15.82
$27.88
50.1
---
July 1999
$12.58
$16.36
$28.94
51.1
532
July 2000
$12.84
$18.38
$31.22
54.8
623
July 2001
$12.87
$21.02
$33.89
59.3
652
July 2002 (1)
$14.47
$22.14
$36.61
62.7
696
January 2003
$13.38
$25.73
$39.11
67.3
---
January 2004
$13.73
$27.56
$41.29
70.1
734
January 2005
$14.25
$29.08
$43.33
70.3
734
January 2006
$14.52
$30.96
$45.48
70.6
747
January 2007
$15.10
$32.39
$47.49
72.5
744
January 2008
$15.83
$34.14
$49.97
72.8
757
Percent Change 1995-2008
123.6%
65.5%
---

Communities Relieved from Rate Regulation

July 1995
---
---
$21.64
38.0
---
July 1996
---
---
$23.32
39.6
---
July 1997
---
---
$25.29
46.5
---
July 1998
$11.12
$15.00
$26.12
54.0
---
July 1999
$12.03
$15.27
$27.30
52.3
619
July 2000
$12.03
$17.41
$29.44
59.9
630
July 2001
$12.43
$19.23
$31.66
60.9
666
July 2002 (2)
$14.09
$20.25
$34.34
62.9
677
January 2003
$14.25
$22.61
$36.86
69.7
---
January 2004
$14.58
$23.59
$38.17
72.5
734
January 2005
$14.80
$25.35
$40.15
72.0
754
January 2006
$15.09
$28.62
$43.70
74.0
765
January 2007
$16.37
$29.90
$46.28
73.0
766
January 2008
$17.37
$30.82
$48.19
73.0
772
Percent Change 1995-2008
122.7%
92.0%
---
Sources: See Attachment 4.
(1) January 2002 prices were also sampled. In January 2002, prices averaged $13.06 for the basic cable service tier,
$23.15 for the cable programming service tier, and $36.21 for expanded basic service.
(2) In January 2002, prices averaged $13.70 for the basic cable service tier, $21.36 for the cable programming
service tier, and $35.06 for expanded basic service.
50

Federal Communications Commission

DA 09-53

Attachment 7

Monthly Programming Expense per Subscriber

Sample Group

Year

N

Mean

(1)

Std. Error

2005
751
$13.41
0.185
Sample groups overall
2004
746
$12.54
0.165
2005
433
$13.32
0.208
Noncompetitive Communities
2004
428
$12.46
0.185
2005
318
$14.10
0.248
Communities relieved from rate regulation
2004
318
$13.09
0.229
2005
107
$14.83
0.244
Second cable operator subgroup (overall)
2004
107
$13.76
0.236
2005
54
$13.80
0.289
Second cable operator subgroup (incumbents)
2004
54
$12.82
0.254
2005
53
$17.90
0.447
Second cable operator subgroup (rivals)
2004
53
$16.56
0.556
2005
124
$14.43
0.429
DBS subgroup
2004
124
$13.38
0.394
2005
31
$11.50
0.204
Wireless MVPD subgroup
2004
31
$10.75
0.230
2005
56
$14.94
0.610
Low penetration test subgroup
2004
56
$13.64
0.574
Source: 2006 survey.
(1) Monthly programming expense per subscriber is approximated by dividing yearly programming cost by end of
year basic cable service subscribers, dividing by 12 months.
51

Federal Communications Commission

DA 09-53

Attachment 7-a

Monthly Programming Expense per Subscriber

Sample Group

Year

N

Mean

(1)

Std. Error

2006
611
$14.74
0.163
Sample groups overall
2005
567
$13.61
0.135
2006
336
$14.73
0.195
Noncompetitive Communities
2005
310
$13.60
0.157
2006
275
$14.77
0.230
Communities relieved from rate regulation
2005
257
$13.64
0.232
2006
99
$15.39
0.305
Second cable operator subgroup (overall)
2005
96
$14.00
0.294
2006
51
$14.48
0.362
Second cable operator subgroup (incumbents)
2005
50
$13.14
0.351
2006
48
$18.73
0.525
Second cable operator subgroup (rivals)
2005
46
$17.21
0.474
2006
76
$14.91
0.338
DBS subgroup
2005
63
$13.79
0.350
2006
32
$12.39
0.306
Wireless MVPD subgroup
2005
32
$11.40
0.209
2006
68
$15.51
0.354
Low penetration test subgroup
2005
66
$15.41
1.073
Source: 2007/2008 survey.
(1) Monthly programming expense per subscriber is approximated by dividing yearly programming cost by end of
year basic cable service subscribers, dividing by 12 months.
52

Federal Communications Commission

DA 09-53

Attachment 7-b

Monthly Programming Expense per Subscriber

Sample Group

Year

N

Mean

(1)

Std. Error

2007
662
$16.14
0.186
Sample groups overall
2006
611
$14.74
0.163
2007
377
$16.09
0.219
Noncompetitive Communities
2006
336
$14.73
0.195
2007
285
$16.34
0.270
Communities relieved from rate regulation
2006
275
$14.77
0.230
2007
107
$17.21
0.368
Second cable operator subgroup (overall)
2006
99
$15.39
0.305
2007
55
$16.41
0.445
Second cable operator subgroup (incumbents)
2006
51
$14.48
0.362
2007
52
$20.11
0.537
Second cable operator subgroup (rivals)
2006
48
$18.73
0.525
2007
77
$16.40
0.396
DBS subgroup
2006
76
$14.91
0.338
2007
33
$14.05
0.515
Wireless MVPD subgroup
2006
32
$12.39
0.306
2007
68
$16.77
0.344
Low penetration test subgroup
2006
68
$15.51
0.354
Source: 2007/2008 survey.
(1) Monthly programming expense per subscriber is approximated by dividing yearly programming cost by end of
year basic cable service subscribers, dividing by 12 months.
53

Federal Communications Commission

DA 09-53

Attachment 8

Basic Cable Service Channels, by Category

January 1, 2006

By Category of Channel

Number of

Channels on

Public,
the Basic
Local
Educational,
Commercial
Other

Sample Group

N

Cable

Broadcast
&
Leased
Channels

Service Tier

Stations
Governmental
Access
Access (PEG)

Mean

S.E.

Mean

S.E.

Mean

S.E.

Mean

S.E.

Mean

S.E.

Sample groups overall
754
24.8
0.416
12.2
0.185
3.3
0.107
0.7
0.042
8.6
0.471
Noncompetitive
434
24.9
0.470
12.4
0.209
3.3
0.121
0.7
0.047
8.5
0.532
Communities
Communities relieved
320
24.0
0.449
10.8
0.204
2.7
0.106
0.8
0.062
9.8
0.51
from rate regulation
2nd cable operator
108
24.8
0.416
11.1
0.381
2.5
0.181
0.7
0.089
9.1
1.024
subgroup (overall)
2nd cable operator
subgroup
54
24.9
0.470
10.4
0.483
2.2
0.209
0.8
0.116
10.4
1.228
(incumbents)
2nd cable operator
54
24.0
0.449
13.3
0.498
3.3
0.359
0.3
0.087
5.3
1.806
subgroup (rivals)
DBS subgroup
125
24.7
0.661
10.6
0.280
2.9
0.141
0.9
0.097
10.3
0.706
Wireless MVPD
31
23.5
0.825
10.4
0.540
2.5
0.347
0.7
0.131
10.0
1.158
subgroup
Low penetration test
56
21.2
0.916
12.8
0.556
2.4
0.329
0.3
0.089
5.7
1.049
subgroup
Source: 2006 survey.
54

Federal Communications Commission

DA 09-53

Attachment 8-b

Basic Cable Service Channels, by Category

January 1, 2008

By Category of Channel

Number of

Channels on

Public,
the Basic
Local
Educational,
Commercial
Other

Sample Group

N

Cable

Broadcast
&
Leased
Channels

Service Tier

Stations
Governmental
Access
Access (PEG)

Mean

S.E.

Mean

S.E.

Mean

S.E.

Mean

S.E.

Mean

S.E.

Sample groups overall
674
26.7
0.482
12.7
0.232
2.8
0.099
0.7
0.039
10.0
0.446
Noncompetitive
388
26.8
0.566
12.7
0.263
2.8
0.115
0.6
0.045
9.8
0.460
Communities
Communities relieved
286
25.9
0.740
12.9
0.471
2.8
0.169
0.9
0.073
10.9
1.320
from rate regulation
2nd cable operator
107
25.3
0.990
11.4
0.498
2.8
0.300
0.6
0.096
9.9
0.905
subgroup (overall)
2nd cable operator
subgroup
55
23.7
1.017
11.1
0.603
2.7
0.376
0.8
0.122
8.5
0.936
(incumbents)
2nd cable operator
52
31.2
2.716
12.3
0.733
3.1
0.257
0.2
0.051
15.1
2.450
subgroup (rivals)
DBS subgroup
78
26.8
1.098
13.4
0.711
3.0
0.244
1.1
0.106
12.3
2.035
Wireless MVPD
33
22.7
0.856
13.7
0.523
2.2
0.171
1.0
0.141
5.9
0.669
subgroup
Low penetration test
68
23.3
1.135
11.6
0.486
1.7
0.206
0.9
0.120
6.9
0.932
subgroup
Source: 2007/2008 survey. Note: Channels by category were not collected for year 2007.
55

Federal Communications Commission

DA 09-53

Attachment 9

Average Number of Channels

January 1, 2006

January 1, 2005

Sample Group

Programming Service Tier

Std.

Std.

N

Mean

N

Mean

Error

Error

Basic cable service
754
24.8
0.416
754
24.5
0.410
Sample groups overall
Cable programming service
754
46.2
0.429
754
46.0
0.435
Expanded basic service
754
71.0
0.276
754
70.5
0.285
Basic cable service
434
24.9
0.470
434
24.6
0.462
Noncompetitive
Cable programming service
434
45.7
0.484
434
45.5
0.491
Communities
Expanded basic service
434
70.6
0.311
434
70.0
0.321
Basic cable service
320
24.0
0.449
320
24.2
0.498
Communities relieved
Cable programming service
320
50.0
0.463
320
49.7
0.516
from rate regulation
Expanded basic service
320
74.0
0.361
320
73.9
0.360
Basic cable service
108
23.4
0.850
108
23.4
0.869
Second cable operator
Cable programming service
108
51.5
0.870
108
50.7
0.926
subgroup (overall)
Expanded basic service
108
74.9
0.472
108
74.1
0.490
Basic cable service
54
23.7
0.988
54
23.0
0.919
Second cable operator
Cable programming service
54
50.9
0.987
54
50.5
0.945
subgroup (incumbents)
Expanded basic service
54
74.6
0.553
54
73.5
0.569
Basic cable service
54
22.3
1.664
54
24.5
2.101
Second cable operator
Cable programming service
54
53.4
1.823
54
51.2
2.362
subgroup (rivals)
Expanded basic service
54
75.7
0.905
54
75.8
0.960
Basic cable service
125
24.7
0.661
125
24.9
0.762
DBS subgroup
Cable programming service
125
49.2
0.659
125
49.2
0.764
Expanded basic service
125
73.9
0.579
125
74.1
0.576
Basic cable service
31
23.5
0.825
31
23.5
0.814
Wireless MVPD subgroup
Cable programming service
31
50.2
1.041
31
50.2
1.022
Expanded basic service
31
73.7
0.703
31
73.7
0.669
Basic cable service
56
21.2
0.916
56
21.8
0.941
Low penetration test
Cable programming service
56
49.6
1.513
56
48.8
1.702
subgroup
Expanded basic service
56
70.8
1.233
56
70.5
1.272
Source: 2006 survey.
56

Federal Communications Commission

DA 09-53

Attachment 9-a

Average Number of Channels

January 1, 2007

January 1, 2006

Sample Group

Programming Service Tier

Std.

Std.

N

Mean

N

Mean

Error

Error

Basic cable service
669
26.3
0.470
618
25.6
0.479
Sample groups overall
Cable programming service
669
46.3
0.553
618
45.9
0.523
Expanded basic service
669
72.6
0.517
618
71.5
0.335
Basic cable service
383
26.3
0.551
355
25.7
0.562
Noncompetitive
Cable programming service
383
46.1
0.648
355
45.4
0.607
Communities
Expanded basic service
383
72.5
0.614
355
71.1
0.371
Basic cable service
286
25.9
0.722
263
24.9
0.691
Communities relieved
Cable programming service
286
47.2
0.883
263
48.6
0.853
from rate regulation
Expanded basic service
286
73.0
0.674
263
73.4
0.783
Basic cable service
107
24.6
0.954
98
23.6
0.911
Second cable operator
Cable programming service
107
50.9
1.236
98
50.8
1.157
subgroup (overall)
Expanded basic service
107
75.5
0.884
98
74.5
0.721
Basic cable service
55
22.8
0.962
54
22.9
0.962
Second cable operator
Cable programming service
55
50.8
1.173
54
51.1
1.202
subgroup (incumbents)
Expanded basic service
55
73.6
0.809
54
74.1
0.786
Basic cable service
52
31.2
2.706
44
26.6
2.475
Second cable operator
Cable programming service
52
51.1
3.821
44
49.5
3.273
subgroup (rivals)
Expanded basic service
52
82.3
2.851
44
76.2
1.770
Basic cable service
78
26.9
1.069
67
25.8
1.062
DBS subgroup
Cable programming service
78
45.4
1.308
67
47.5
1.310
Expanded basic service
78
72.3
1.002
67
73.3
1.240
Basic cable service
33
23.7
0.947
32
23.3
0.788
Wireless MVPD
Cable programming service
33
50.2
0.975
32
50.3
0.969
subgroup
Expanded basic service
33
73.9
0.787
32
73.6
0.620
Basic cable service
68
23.1
1.104
66
23.0
1.120
Low penetration test
Cable programming service
68
47.8
1.186
66
47.8
1.229
subgroup
Expanded basic service
68
70.8
0.919
66
70.8
0.910
Source: 2007/2008 cable price survey.
57

Federal Communications Commission

DA 09-53

Attachment 9-b

Average Number of Channels

January 1, 2008

January 1, 2007

Sample Group

Programming Service Tier

Std.

Std.

N

Mean

N

Mean

Error

Error

Basic cable service
674
26.7
0.482
669
26.3
0.470
Sample groups overall
Cable programming service
674
46.2
0.576
669
46.3
0.553
Expanded basic service
674
72.8
0.543
669
72.6
0.517
Basic cable service
388
26.8
0.566
383
26.3
0.551
Noncompetitive
Cable programming service
388
46.0
0.676
383
46.1
0.648
Communities
Expanded basic service
388
72.8
0.647
383
72.5
0.614
Basic cable service
286
25.9
0.740
286
25.9
0.722
Communities relieved
Cable programming service
286
47.1
0.878
286
47.2
0.883
from rate regulation
Expanded basic service
286
73.0
0.671
286
73.0
0.674
Basic cable service
107
25.3
0.990
107
24.6
0.954
Second cable operator
Cable programming service
107
50.8
1.283
107
50.9
1.236
subgroup (overall)
Expanded basic service
107
76.1
0.925
107
75.5
0.884
Basic cable service
55
23.7
1.017
55
22.8
0.962
Second cable operator
Cable programming service
55
50.3
1.221
55
50.8
1.173
subgroup (incumbents)
Expanded basic service
55
74.0
0.826
55
73.6
0.809
Basic cable service
52
31.2
2.716
52
31.2
2.706
Second cable operator
Cable programming service
52
52.4
3.955
52
51.1
3.821
subgroup (rivals)
Expanded basic service
52
83.6
3.054
52
82.3
2.851
Basic cable service
78
26.8
1.098
78
26.9
1.069
DBS subgroup
Cable programming service
78
45.6
1.292
78
45.4
1.308
Expanded basic service
78
72.4
0.992
78
72.3
1.002
Basic cable service
33
22.7
0.856
33
23.7
0.947
Wireless MVPD subgroup
Cable programming service
33
49.1
1.099
33
50.2
0.975
Expanded basic service
33
71.8
0.867
33
73.9
0.787
Basic cable service
68
23.3
1.135
68
23.1
1.104
Low penetration test
Cable programming service
68
46.9
1.161
68
47.8
1.186
subgroup
Expanded basic service
68
70.1
0.892
68
70.8
0.919
Source: 2007/2008 cable price survey.
58

Federal Communications Commission

DA 09-53

Attachment 10

Other Programming Channels

January 1, 2006

Local Broadcast Stations

Most Highly Subscribed

Sample Group

in HD Format (1)

Digital Tier

(2)

N

Mean

S.E.

N

Mean

S.E.

Sample groups overall
754
4.3
0.08
725
40.6
0.81
Noncompetitive Communities
434
4.3
0.08
416
41.0
0.91
Communities relieved from rate regulation
320
4.1
0.13
309
37.7
0.91
Second cable operator subgroup (overall)
108
4.6
0.22
103
38.4
1.15
Second cable operator subgroup (incumbents)
54
4.6
0.27
53
37.0
1.44
Second cable operator subgroup (rivals)
54
4.6
0.30
50
42.6
1.55
DBS subgroup
125
3.5
0.19
123
39.7
1.45
Wireless MVPD subgroup
31
5.2
0.28
31
29.6
1.99
Low penetration test subgroup
56
2.5
0.30
52
35.4
1.90
Source: 2006 survey.
(1) Video channels showing re-transmissions in digital high definition of local broadcast stations, requiring lease of
a high definition set-top converter.
(2) The digital cable programming service tier with the highest number of subscribers, generally requiring lease of a
digital set-top converter.
59

Federal Communications Commission

DA 09-53

Attachment 10-a

Other Programming Channels

January 1, 2007

Local Broadcast Stations

Most Highly Subscribed

Sample Group

in HD Format (1)

Digital Tier

(2)

N

Mean

S.E.

Mean

Mean

S.E.

Sample groups overall
672
5.0
0.09
620
37.5
0.64
Noncompetitive Communities
387
4.9
0.10
348
37.1
0.71
Communities relieved from rate regulation
285
5.4
0.25
272
39.3
1.46
Second cable operator subgroup (overall)
107
5.6
0.34
96
40.5
1.39
Second cable operator subgroup (incumbents)
55
5.9
0.42
55
39.4
1.65
Second cable operator subgroup (rivals)
52
4.5
0.36
41
45.4
1.77
DBS subgroup
78
5.2
0.37
76
39.7
2.21
Wireless MVPD subgroup
33
6.5
0.39
33
35.7
1.81
Low penetration test subgroup
67
3.6
0.31
67
38.5
1.58
Source: 2007/2008 survey.
(1) Video channels showing re-transmissions in digital high definition of local broadcast stations, requiring lease of
a high definition set-top converter.
(2) The digital cable programming service tier with the highest number of subscribers, generally requiring lease of a
digital set-top converter.
60

Federal Communications Commission

DA 09-53

Attachment 10-b

Other Programming Channels

January 1, 2008

Local Broadcast Stations

Most Highly Subscribed

Sample Group

in HD Format (1)

Digital Tier

(2)

N

Mean

S.E.

N

Mean

S.E.

Sample groups overall
673
5.6
0.10
635
40.4
0.66
Noncompetitive Communities
388
5.5
0.11
357
40.1
0.72
Communities relieved from rate regulation
285
6.1
0.25
278
41.4
1.61
Second cable operator subgroup (overall)
107
6.2
0.37
101
42.0
1.37
Second cable operator subgroup (incumbents)
55
6.5
0.46
55
40.9
1.65
Second cable operator subgroup (rivals)
52
5.3
0.36
46
46.2
1.81
DBS subgroup
78
6.0
0.37
76
42.1
2.46
Wireless MVPD subgroup
33
7.3
0.36
33
37.8
1.97
Low penetration test subgroup
67
3.9
0.32
68
37.7
1.32
Source: 2007/2008 survey.
(1) Video channels showing re-transmissions in digital high definition of local broadcast stations, requiring lease of
a high definition set-top converter.
(2) The digital cable programming service tier with the highest number of subscribers, generally requiring lease of a
digital set-top converter.
61

Federal Communications Commission

DA 09-53

Attachment 11

Prices for Subscriber Equipment

(1)

Analog

Digital

High Definition

CableCARD

Jan.

Sample Group

1

N

Mean

S.E.

N

Mean

S.E.

N

Mean

S.E.

N

Mean

S.E.

2006
495
$4.86 0.089
729
$5.19 0.081
649
$7.11 0.100
671
$1.19 0.048
Sample groups
overall
2005
549
$4.61 0.091
727
$5.05 0.084
622
$6.98 0.102
636
$1.16 0.049
2006
304
$4.81 0.098
419
$5.14 0.092
376
$7.08 0.113
393
$1.14 0.054
Noncompetitive
Communities
2005
328
$4.56 0.102
417
$5.02 0.095
362
$6.94 0.115
379
$1.10 0.055
Communities
2006
191
$5.22 0.135
310
$5.55 0.105
273
$7.31 0.125
278
$1.56 0.048
relieved from
rate regulation
2005
221
$4.93 0.136
310
$5.26 0.124
260
$7.24 0.133
257
$1.58 0.051
2nd cable
2006
67
$4.46 0.226
99
$5.85 0.221
94
$7.75 0.228
90
$1.76 0.109
operator
subgroup
(overall)
2005
82
$4.30 0.247
99
$5.18 0.295
92
$7.74 0.253
80
$1.88 0.120
2nd cable
2006
29
$4.92 0.313
54
$5.56 0.280
52
$7.66 0.276
52
$1.32 0.116
operator
subgroup
(incumbents)
2005
43
$4.58 0.317
54
$4.72 0.374
50
$7.63 0.312
45
$1.35 0.127
2nd cable
2006
38
$3.43 0.214
45
$6.88 0.170
42
$8.06 0.329
38
$3.50 0.284
operator
subgroup
(rivals)
2005
39
$3.39 0.208
45
$6.77 0.194
42
$8.11 0.330
35
$3.91 0.317
2006
76
$5.54 0.218
125
$5.48 0.141
109
$7.45 0.190
113
$1.64 0.045
DBS subgroup
2005
82
$5.16 0.215
125
$5.28 0.161
103
$7.35 0.201
110
$1.64 0.046
Wireless
2006
27
$5.29 0.199
31
$5.40 0.235
31
$6.09 0.219
31
$0.94 0.181
MVPD
subgroup
2005
28
$5.37 0.212
31
$5.40 0.234
31
$6.07 0.214
30
$0.91 0.185
Low
2006
21
$5.20 0.326
55
$4.96 0.343
39
$7.71 0.206
44
$1.76 0.062
penetration test
subgroup
2005
29
$4.34 0.396
55
$4.87 0.344
34
$7.90 0.280
37
$1.75 0.072
Source: 2006 survey.
(1) Except for the CableCARD, monthly price is for lease of an addressable converter box and remote control.
62

Federal Communications Commission

DA 09-53

Attachment 11-a

Prices for Subscriber Equipment

(1)

Analog

Digital

High Definition

CableCARD

Jan.

Sample Group

1

N

Mean

S.E.

N

Mean

S.E.

N

Mean

S.E.

N

Mean

S.E.

2007
353
$4.28 0.127
556
$5.38 0.082
566
$7.86 0.125
589
$1.25 0.059
Sample groups
overall
2006
335
$4.39 0.127
525
$5.42 0.081
528
$7.62 0.128
535
$1.10 0.054
2007
205
$4.17 0.148
315
$5.34
0.096
308
$7.85 0.146
328
$1.16 0.070
Noncompetitive
Communities
2006
196
$4.24 0.145
298
$5.35 0.094
292
$7.60 0.148
302
$1.02 0.063
Communities
2007
148
$4.81 0.208
241
$5.58 0.127
258
$7.93 0.216
261
$1.65 0.088
relieved from
rate regulation
2006
139
$5.15 0.244
227
$5.70 0.136
236
$7.70 0.218
233
$1.51 0.088
2nd cable
2007
51
$4.60 0.322
86
$5.84 0.209
97
$7.98 0.243
91
$1.84 0.112
operator
subgroup
(overall)
2006
52
$4.64 0.314
80
$6.02 0.217
91
$7.96 0.239
80
$1.68 0.104
2nd cable
2007
31
$4.79 0.381
54
$5.78 0.237
54
$7.57 0.279
55
$1.71 0.126
operator
subgroup
(incumbents)
2006
32
$4.83 0.369
53
$5.91 0.244
54
$7.64 0.267
54
$1.56 0.114
2nd cable
2007
20
$3.59 0.215
32
$6.21 0.368
43
$9.75 0.480
36
$2.52
0.231
operator
subgroup
(rivals)
2006
20
$3.59 0.215
27
$6.75 0.354
37
$9.56 0.521
26
$2.51 0.224
2007
46
$4.86 0.304
72
$5.45 0.173
72
$8.21 0.326
76
$1.71 0.127
DBS subgroup
2006
38
$5.35 0.389
65
$5.54 0.189
60
$7.89 0.348
62
$1.56 0.133
Wireless
2007
28
$5.01 0.283
17
$6.47 0.392
32
$6.20 0.224
33
$1.09 0.182
MVPD
subgroup
2006
28
$5.33 0.253
17
$6.47 0.392
32
$6.20 0.224
31
$1.02 0.183
Low
2007
23
$3.81 0.455
66
$5.20 0.186
57
$7.99 0.271
61
$1.26 0.118
penetration test
subgroup
2006
21
$3.89
0.494
65
$5.41 0.195
53
$7.96 0.276
60
$1.24 0.120
Source: 2007/2008 survey.
(1) Except for the CableCARD column, monthly price is to lease an addressable converter box and remote control.
63

Federal Communications Commission

DA 09-53

Attachment 11-b

Prices for Subscriber Equipment

(1)

Analog

Digital

High Definition

CableCARD

Jan.

Sample Group

1

N

Mean

S.E.

N

Mean

S.E.

N

Mean

S.E.

N

Mean

S.E.

2008
338
$3.86 0.122
555
$5.16 0.090
579
$8.22 0.116
602
$1.44 0.067
Sample groups
overall
2007
353
$4.28 0.127
556
$5.38 0.082
566
$7.86 0.125
589
$1.25 0.059
2008
201
$3.75 0.141
320
$5.10 0.105
317
$8.26 0.134
335
$1.33 0.079
Noncompetitive
Communities
2007
205
$4.17 0.148
315
$5.34 0.096
308
$7.85 0.146
328
$1.16 0.070
Communities
2008
137
$4.36 0.220
235
$5.43 0.150
262
$8.06 0.207
267
$1.90 0.105
relieved from
rate regulation
2007
148
$4.81 0.208
241
$5.58 0.127
258
$7.93 0.216
261
$1.65 0.088
2nd cable
2008
48
$4.48 0.365
85
$5.97 0.212
98
$8.03 0.243
96
$2.08 0.133
operator
subgroup
(overall)
2007
51
$4.60 0.322
86
$5.84 0.209
97
$7.98 0.243
91
$1.84 0.112
2nd cable
2008
30
$4.61 0.427
54
$5.90 0.241
55
$7.59 0.275
55
$1.94 0.154
operator
subgroup
(incumbents)
2007
31
$4.79 0.381
54
$5.78 0.237
54
$7.57 0.279
55
$1.71 0.126
2nd cable
2008
18
$3.77 0.258
31
$6.42 0.353
43
$9.98 0.506
41
$2.71 0.219
operator
subgroup
(rivals)
2007
20
$3.59 0.215
32
$6.21 0.368
43
$9.75 0.480
36
$2.52 0.231
2008
46
$4.49 0.308
72
$5.19 0.204
74
$8.27 0.312
76
$1.95 0.152
DBS subgroup
2007
46
$4.86 0.304
72
$5.45 0.173
72
$8.21 0.326
76
$1.71 0.127
Wireless
2008
20
$3.63 0.271
17
$6.48 0.547
33
$6.95 0.195
33
$1.42 0.242
MVPD
subgroup
2007
28
$5.01 0.283
17
$6.47 0.392
32
$6.20 0.224
33
$1.09 0.182
Low
2008
23
$3.33 0.361
61
$5.19 0.228
57
$8.04 0.328
62
$1.47 0.160
penetration test
subgroup
2007
23
$3.81 0.455
66
$5.20 0.186
57
$7.99 0.271
61
$1.26 0.118
Source: 2007/2008 survey.
(1) Except for the CableCARD, monthly price is to lease an addressable converter box and remote control.
64

Federal Communications Commission

DA 09-53

Attachment 12

Cable Service Installation Charges

January 1, 2006

January 1, 2005

Sample Group

Type of Installation

N
Mean
S.E
N
Mean
S.E
Unwired residence
747
$45.96
0.357
749
$46.11
0.381
Pre-wired residence
754
$32.47
0.392
754
$32.58
0.398
Sample groups overall
Service reconnection
752
$28.67
0.338
752
$28.70
0.328
CableCARD, existing customer
753
$20.47
0.696
752
$19.63
0.699
CableCARD, new customer
753
$22.24
0.787
752
$21.20
0.783
Unwired residence
432
$45.99
0.400
434
$46.24
0.428
Pre-wired residence
434
$32.47
0.440
434
$32.60
0.446
Noncompetitive
Service reconnection
433
$28.60
0.378
433
$28.63
0.367
Communities
CableCARD, existing customer
433
$20.77
0.784
432
$19.92
0.787
CableCARD, new customer
433
$22.59
0.885
432
$21.51
0.880
Unwired residence
315
$45.75
0.537
315
$45.24
0.526
Pre-wired residence
320
$32.49
0.594
320
$32.45
0.581
Communities relieved
Service reconnection
319
$29.12
0.535
319
$29.18
0.512
from rate regulation
CableCARD, existing customer
320
$18.30
0.907
320
$17.57
0.926
CableCARD, new customer
320
$19.72
1.079
320
$19.07
1.090
Unwired residence
103
$42.50
0.893
103
$43.04
0.919
Pre-wired residence
108
$31.60
1.022
108
$31.68
1.014
2nd cable operator
Service reconnection
107
$26.52
0.872
107
$26.92
0.856
subgroup (overall)
CableCARD, existing customer
108
$16.58
1.242
108
$14.99
1.392
CableCARD, new customer
108
$15.87
1.513
108
$13.67
1.619
Unwired residence
54
$43.13
0.671
54
$43.86
0.724
Pre-wired residence
54
$30.08
0.893
54
$30.24
0.881
2nd cable operator
Service reconnection
53
$26.45
1.092
53
$27.01
1.070
subgroup (incumbents)
CableCARD, existing customer
54
$20.25
1.547
54
$17.92
1.741
CableCARD, new customer
54
$19.20
1.920
54
$16.25
2.069
Unwired residence
49
$40.46
3.090
49
$40.40
3.106
Pre-wired residence
54
$36.06
3.043
54
$35.91
3.038
2nd cable operator
Service reconnection
54
$26.70
1.256
54
$26.66
1.246
subgroup (rivals)
CableCARD, existing customer
54
$5.83
1.815
54
$6.39
1.974
CableCARD, new customer
54
$6.11
1.927
54
$6.11
1.927
Unwired residence
125
$46.01
0.810
125
$45.20
0.752
Pre-wired residence
125
$33.12
0.857
125
$32.79
0.821
DBS subgroup
Service reconnection
125
$30.30
0.727
125
$30.21
0.675
CableCARD, existing customer
125
$19.72
1.155
125
$19.47
1.157
CableCARD, new customer
125
$22.59
1.507
125
$22.76
1.502
Unwired residence
31
$49.72
1.077
31
$48.52
1.315
Pre-wired residence
31
$31.29
1.481
31
$32.09
1.552
Wireless MVPD subgroup
Service reconnection
31
$29.45
1.726
31
$29.49
1.725
CableCARD, existing customer
31
$16.57
3.612
31
$15.94
3.647
CableCARD, new customer
31
$16.57
3.612
31
$15.94
3.647
Unwired residence
56
$50.18
1.863
56
$49.29
1.864
Pre-wired residence
56
$35.54
1.709
56
$35.05
1.660
Low penetration test
Service reconnection
56
$28.79
0.965
56
$28.89
0.954
subgroup
CableCARD, existing customer
56
$16.34
2.172
56
$13.77
1.612
CableCARD, new customer
56
$17.41
2.770
56
$15.39
2.286
Source: 2006 survey.
65

Federal Communications Commission

DA 09-53

Attachment 12-a

Cable Service Installation Charges

January 1, 2007

January 1, 2006

Sample Group

Type of Installation

N
Mean
S.E
N
Mean
S.E
Unwired residence
670
$45.97
0.483
637
$45.44
0.498
Pre-wired residence
670
$32.89
0.473
636
$32.31
0.442
Sample groups
Service reconnection
670
$28.89
0.459
635
$28.15
0.452
overall
CableCARD, existing customer
642
$22.56
0.603
600
$21.74
0.616
CableCARD, new customer
641
$26.51
0.729
599
$26.10
0.731
Unwired residence
384
$45.84
0.573
364
$45.50
0.587
Pre-wired residence
384
$32.80
0.551
364
$32.19
0.511
Noncompetitive
Service reconnection
384
$29.01
0.541
363
$28.34
0.531
Communities
CableCARD, existing customer
366
$22.15
0.690
345
$21.66
0.706
CableCARD, new customer
366
$25.76
0.845
345
$25.90
0.850
Unwired residence
286
$46.56
0.656
273
$45.20
0.687
Communities
Pre-wired residence
286
$33.33
0.788
272
$32.91
0.769
relieved from
Service reconnection
286
$28.38
0.666
272
$27.26
0.645
rate regulation
CableCARD, existing customer
276
$24.37
1.173
255
$22.13
1.153
CableCARD, new customer
275
$29.86
1.289
254
$27.02
1.201
Unwired residence
107
$44.09
1.263
102
$43.00
1.027
Second cable
Pre-wired residence
107
$31.80
1.035
102
$31.01
0.973
operator
Service reconnection
107
$27.20
1.248
102
$25.57
1.174
subgroup
CableCARD, existing customer
102
$19.81
1.537
92
$18.27
1.696
(overall)
CableCARD, new customer
102
$21.94
1.818
92
$20.38
1.902
Unwired residence
55
$44.52
1.010
54
$44.89
1.064
Second cable
Pre-wired residence
55
$31.70
1.131
54
$31.03
1.026
operator
Service reconnection
55
$25.98
1.524
54
$24.34
1.413
subgroup
CableCARD, existing customer
55
$22.63
1.829
54
$20.54
1.961
(incumbents)
CableCARD, new customer
55
$25.74
2.203
54
$24.13
2.272
Unwired residence
52
$42.52
4.555
48
$35.75
2.833
Second cable
Pre-wired residence
52
$32.14
2.474
48
$30.96
2.584
operator
Service reconnection
52
$31.63
1.672
48
$30.29
1.676
subgroup (rivals)
CableCARD, existing customer
47
$8.50
2.335
38
$7.24
2.814
CableCARD, new customer
47
$6.71
2.209
38
$2.10
1.515
Unwired residence
78
$46.68
0.901
70
$44.97
1.024
Pre-wired residence
78
$34.27
1.150
70
$33.83
1.158
DBS subgroup
Service reconnection
78
$29.18
0.946
70
$27.63
0.937
CableCARD, existing customer
78
$25.91
1.678
69
$23.48
1.679
CableCARD, new customer
78
$33.00
1.858
69
$29.33
1.753
Unwired residence
33
$50.82
1.552
33
$50.02
1.185
Pre-wired residence
33
$30.66
1.572
32
$31.46
1.482
Wireless MVPD
Service reconnection
33
$25.66
0.798
32
$27.52
0.876
subgroup
CableCARD, existing customer
33
$27.48
2.990
32
$24.98
2.603
CableCARD, new customer
33
$31.63
2.629
32
$31.23
2.252
Unwired residence
68
$46.23
1.289
68
$46.39
1.023
Pre-wired residence
68
$33.03
1.427
68
$32.76
0.940
Low penetration
Service reconnection
68
$28.56
1.247
68
$29.13
1.207
test subgroup
CableCARD, existing customer
63
$15.65
1.644
62
$15.00
1.555
CableCARD, new customer
62
$16.30
1.776
61
$16.32
1.717
Source: 2007/2008 survey.
66

Federal Communications Commission

DA 09-53

Attachment 12-b

Cable Service Installation Charges

January 1, 2008

January 1, 2007

Sample Group

Type of Installation

N
Mean
S.E
N
Mean
S.E
Unwired residence
673
$45.11
0.575
670
$45.97
0.483
Pre-wired residence
673
$32.68
0.534
670
$32.89
0.473
Sample groups
Service reconnection
673
$28.91
0.489
670
$28.89
0.459
overall
CableCARD, existing customer
650
$23.04
0.630
642
$22.56
0.603
CableCARD, new customer
650
$27.07
0.729
641
$26.51
0.729
Unwired residence
387
$44.86
0.675
384
$45.84
0.573
Pre-wired residence
387
$32.36
0.623
384
$32.80
0.551
Noncompetitive
Service reconnection
387
$28.84
0.576
384
$29.01
0.541
Communities
CableCARD, existing customer
371
$22.63
0.724
366
$22.15
0.690
CableCARD, new customer
371
$26.29
0.840
366
$25.76
0.845
Unwired residence
286
$46.27
0.882
286
$46.56
0.656
Communities
Pre-wired residence
286
$34.11
0.879
286
$33.33
0.788
relieved from rate
Service reconnection
286
$29.20
0.699
286
$28.38
0.666
regulation
CableCARD, existing customer
279
$24.86
1.191
276
$24.37
1.173
CableCARD, new customer
279
$30.53
1.342
275
$29.86
1.289
Unwired residence
107
$43.99
1.515
107
$44.09
1.263
Second cable
Pre-wired residence
107
$31.68
1.126
107
$31.80
1.035
operator subgroup Service reconnection
107
$27.45
1.305
107
$27.20
1.248
(overall)
CableCARD, existing customer
105
$21.26
1.728
102
$19.81
1.537
CableCARD, new customer
105
$23.68
1.967
102
$21.94
1.818
Unwired residence
55
$44.13
1.465
55
$44.52
1.010
Second cable
Pre-wired residence
55
$32.50
1.239
55
$31.70
1.131
operator subgroup Service reconnection
55
$27.25
1.583
55
$25.98
1.524
(incumbents)
CableCARD, existing customer
55
$23.59
2.021
55
$22.63
1.829
CableCARD, new customer
55
$27.04
2.344
55
$25.74
2.203
Unwired residence
52
$43.49
4.569
52
$42.52
4.555
Second cable
Pre-wired residence
52
$28.68
2.633
52
$32.14
2.474
operator subgroup Service reconnection
52
$28.16
1.880
52
$31.63
1.672
(rivals)
CableCARD, existing customer
50
$12.49
3.147
47
$8.50
2.335
CableCARD, new customer
50
$11.01
3.142
47
$6.71
2.209
Unwired residence
78
$45.80
1.254
78
$46.68
0.901
Pre-wired residence
78
$34.89
1.295
78
$34.27
1.150
DBS subgroup
Service reconnection
78
$29.66
0.995
78
$29.18
0.946
CableCARD, existing customer
78
$25.63
1.698
78
$25.91
1.678
CableCARD, new customer
78
$32.79
1.945
78
$33.00
1.858
Unwired residence
33
$53.13
1.735
33
$50.82
1.552
Pre-wired residence
33
$34.27
1.551
33
$30.66
1.572
Wireless MVPD
Service reconnection
33
$29.03
0.811
33
$25.66
0.798
subgroup
CableCARD, existing customer
33
$31.27
2.877
33
$27.48
2.990
CableCARD, new customer
33
$35.97
2.395
33
$31.63
2.629
Unwired residence
68
$47.10
1.248
68
$46.23
1.289
Pre-wired residence
68
$33.83
1.440
68
$33.03
1.427
Low penetration
Service reconnection
68
$30.82
1.113
68
$28.56
1.247
test subgroup
CableCARD, existing customer
63
$15.40
1.644
63
$15.65
1.644
CableCARD, new customer
63
$16.82
1.893
62
$16.30
1.776
Source: 2007/2008 survey.
67

Federal Communications Commission

DA 09-53

Attachment 13

Average Operating Capacity

Capacity of Cable System

Percentage of Subscribers by Capacity of Cable System

(in MHz)

Serving Their Community, January 1, 2006

Sample Group

More than
331 - 749
330 or Less
2005
January 1, 2006
750 MHz
750 MHz
MHz
MHz

Mean

N

Mean

S.E.

Mean

S.E.

Mean

S.E.

Mean

S.E.

Mean

S.E.

Sample groups
736
751
749
3.7
25.4%
1.9
63.9%
2.0
8.7%
1.1
2.1%
0.5
overall
Noncompetitive
734
433
747
4.2
25.5%
2.1
63.3%
2.2
8.9%
1.2
2.3%
0.6
Communities
Communities
relieved from rate
754
318
765
4.9
24.9%
2.7
68.0%
2.8
6.7%
1.6
0.4%
0.4
regulation
2nd cable operator
756
106
759
5.6
13.7%
3.6
82.1%
4.1
4.2%
2.4
0.0%
0.0
subgroup (overall)
2nd cable operator
subgroup
757
53
753
6.9
11.3%
4.4
83.0%
5.2
5.7%
3.2
0.0%
0.0
(incumbents)
2nd cable operator
756
53
777
8.2
20.8%
5.6
79.2%
5.6
0.0%
0.0
0.0%
0.0
subgroup (rivals)
DBS subgroup
751
125
770
8.3
34.4%
4.3
56.0%
4.5
8.8%
2.5
0.8%
0.8
Wireless MVPD
758
31
761
5.9
9.7%
5.4
90.3%
5.4
0.0%
0.0
0.0%
0.0
subgroup
Low penetration test
729
56
735
16.0
28.6%
6.1
46.4%
6.7
25.0%
5.8
0.0%
0.0
subgroup
Sources: 2005 survey and 2006 survey.
68

Federal Communications Commission

DA 09-53

Attachment 13-a

Average Operating Capacity

Capacity of Cable System

Percentage of Subscribers by Capacity of Cable System

(in MHz)

Serving Their Community, January 1, 2007

Sample Group

More than
331 - 749
330 or Less
2006
January 1, 2007
750 MHz
750 MHz
MHz
MHz

Mean

N

Mean

S.E.

Mean

S.E.

Mean

S.E.

Mean

S.E.

Mean

S.E.

Sample groups
749
663
748
3.8
25.0%
2.0
63.6%
2.1
10.3%
1.2
1.1%
0.3
overall
Noncompetitive
747
381
744
4.4
25.0%
2.3
62.4%
2.5
11.4%
1.4
1.3%
0.4
Communities
Communities
relieved from rate
765
282
766
6.4
25.5%
3.5
69.0%
3.7
5.4%
1.7
0.1%
0.1
regulation
2nd cable operator
759
103
766
7.9
24.2%
4.4
69.1%
5.0
6.6%
2.9
0.0%
0.0
subgroup (overall)
2nd cable operator
subgroup
753
55
755
9.3
18.2%
5.2
74.5%
5.9
7.3%
3.5
0.0%
0.0
(incumbents)
2nd cable operator
777
48
811
13.0
47.9%
7.3
47.9%
7.3
4.2%
2.9
0.0%
0.0
subgroup (rivals)
DBS subgroup
770
78
768
9.5
28.2%
5.1
66.7%
5.4
5.1%
2.5
0.0%
0.0
Wireless MVPD
761
33
764
6.5
12.1%
5.8
87.9%
5.8
0.0%
0.0
0.0%
0.0
subgroup
Low penetration test
735
68
740
14.6
23.5%
5.2
58.8%
6.0
16.2%
4.5
1.5%
1.5
subgroup
Sources: 2006 survey and 2007/2008 survey.
69

Federal Communications Commission

DA 09-53

Attachment 13-b

Average Operating Capacity

Percentage of Subscribers by Capacity of Cable System

Capacity in MHz

Serving Their Community, January 1, 2008

Sample Group

More than
331 - 749
330 or Less
2007
January 1, 2008
750 MHz
750 MHz
MHz
MHz

Mean

N

Mean

S.E.

Mean

S.E.

Mean

S.E.

Mean

S.E.

Mean

S.E.

Sample groups
748
667
759
3.8
30.5%
2.1
59.1%
2.2
9.7%
1.1
0.7%
0.2
overall
Noncompetitive
744
385
757
4.4
29.4%
2.4
59.1%
2.5
10.6%
1.3
0.9%
0.3
Communities
Communities
relieved from rate
766
282
772
6.5
35.8%
3.8
59.0%
3.9
5.2%
1.7
0.1%
0.1
regulation
2nd cable operator
766
103
774
6.6
32.9%
5.1
61.9%
5.4
5.2%
2.5
0.0%
0.0
subgroup (overall)
2nd cable operator
subgroup
755
55
765
7.6
29.1%
6.2
65.5%
6.5
5.5%
3.1
0.0%
0.0
(incumbents)
2nd cable operator
811
48
811
13.0
47.9%
7.3
47.9%
7.3
4.2%
2.9
0.0%
0.0
subgroup (rivals)
DBS subgroup
768
78
776
9.8
41.0%
5.6
53.8%
5.7
5.1%
2.5
0.0%
0.0
Wireless MVPD
764
33
764
6.5
15.2%
6.3
84.8%
6.3
0.0%
0.0
0.0%
0.0
subgroup
Low penetration test
740
68
740
14.6
23.5%
5.2
58.8%
6.0
16.2%
4.5
1.5%
1.5
subgroup
Source: 2007/2008 survey.
70

Federal Communications Commission

DA 09-53

Attachment 14

Availability of Various Cable Services

January 1, 2006

Availability of Service as a Percent of All Basic Cable TV Subscribers

Sample Group

Cable Service

N

Mean

S.E

Digital programming
754
98.3%
0.5
HD programming
754
91.9%
0.9
Sample groups overall
HD simulcast of a broadcast station
754
85.5%
1.1
Internet access
754
96.9%
0.6
Telephony
754
61.4%
1.8
Digital programming
434
98.1%
0.5
HD programming
434
91.7%
0.9
Noncompetitive Communities
HD simulcast of a broadcast station
434
85.3%
1.2
Internet access
434
96.6%
0.7
Telephony
434
61.8%
2.0
Digital programming
320
99.7%
0.2
HD programming
320
93.4%
1.5
Communities relieved from rate HD simulcast of a broadcast station
320
87.3%
2.0
regulation
Internet access
320
99.1%
0.4
Telephony
320
58.8%
3.0
Digital programming
108
99.1%
0.7
HD programming
108
96.3%
1.7
2nd cable operator subgroup
HD simulcast of a broadcast station
108
92.6%
2.6
(overall)
Internet access
108
98.1%
1.5
Telephony
108
70.4%
4.9
Digital programming
54
100.0%
0.0
HD programming
54
98.1%
1.9
2nd cable operator subgroup
HD simulcast of a broadcast station
54
94.4%
3.1
(incumbents)
Internet access
54
98.1%
1.9
Telephony
54
70.4%
6.3
Digital programming
54
96.3%
2.6
HD programming
54
90.7%
4.0
2nd cable operator subgroup
HD simulcast of a broadcast station
54
87.0%
4.6
(rivals)
Internet access
54
98.1%
1.9
Telephony
54
70.4%
6.3
Digital programming
125
100.0%
0.0
HD programming
125
91.2%
2.5
DBS subgroup
HD simulcast of a broadcast station
125
82.4%
3.4
Internet access
125
100.0%
0.0
Telephony
125
47.2%
4.5
Digital programming
31
100.0%
0.0
HD programming
31
100.0%
0.0
Wireless MVPD subgroup
HD simulcast of a broadcast station
31
100.0%
0.0
Internet access
31
100.0%
0.0
Telephony
31
83.9%
6.7
Digital programming
56
98.2%
1.8
High definition programming
56
73.2%
6.0
Low penetration test subgroup
HD simulcast of a broadcast station
56
62.5%
6.5
Internet access
56
85.7%
4.7
Telephony
56
39.3%
6.6
Source: 2006 survey.
71

Federal Communications Commission

DA 09-53

Attachment 14-a

Availability of Various Cable Services

January 1, 2007

Availability of Service as a Percent of all Basic Cable TV Subscribers

Sample Group

Cable Service

N

Mean

S.E

Digital programming
671
97.9%
0.4
HD programming
670
91.2%
0.7
Sample groups overall
HD simulcast of a broadcast station
672
88.1%
0.9
Internet access
657
96.8%
0.6
Telephony
668
75.9%
1.7
Digital programming
385
97.9%
0.5
HD programming
384
90.7%
0.8
Noncompetitive Communities
HD simulcast of a broadcast station
386
88.1%
0.9
Internet access
375
96.6%
0.6
Telephony
383
75.4%
1.9
Digital programming
286
98.1%
1.2
HD programming
286
93.7%
1.9
Communities relieved from rate HD simulcast of a broadcast station
286
88.1%
2.6
regulation
Internet access
282
97.9%
1.2
Telephony
285
78.3%
3.3
Digital programming
107
98.8%
0.7
HD programming
107
94.2%
2.2
Second cable operator subgroup HD simulcast of a broadcast station
107
93.8%
2.3
(overall)
Internet access
103
99.2%
0.6
Telephony
107
88.9%
3.1
Digital programming
55
100.0%
0.0
HD programming
55
96.4%
2.5
Second cable operator subgroup HD simulcast of a broadcast station
55
96.4%
2.5
(incumbents)
Internet access
55
100.0%
0.0
Telephony
55
92.7%
3.5
Digital programming
52
94.2%
3.3
HD programming
52
86.5%
4.8
Second cable operator subgroup HD simulcast of a broadcast station
52
84.6%
5.1
(rivals)
Internet access
48
95.8%
2.9
Telephony
52
75.0%
6.1
Digital programming
78
97.4%
1.8
HD programming
78
93.6%
2.8
DBS subgroup
HD simulcast of a broadcast station
78
85.9%
4.0
Internet access
78
97.4%
1.8
Telephony
77
72.7%
5.1
Digital programming
33
100.0%
0.0
HD programming
33
97.0%
3.0
Wireless MVPD subgroup
HD simulcast of a broadcast station
33
97.0%
3.0
Internet access
33
100.0%
0.0
Telephony
33
97.0%
3.0
Digital programming
68
100.0%
0.0
High definition programming
68
86.8%
4.1
Low penetration test subgroup
HD simulcast of a broadcast station
68
75.0%
5.3
Internet access
68
94.1%
2.9
Telephony
68
66.2%
5.8
Source: 2007/2008 survey.
72

Federal Communications Commission

DA 09-53

Attachment 14-b

Availability of Various Cable Services

January 1, 2008

Availability of Service as a Percent of all Basic Cable TV Subscribers

Sample Group

Cable Service

N

Mean

S.E

Digital programming
674
98.1%
0.4
HD programming
674
92.5%
0.7
Sample groups overall
HD simulcast of a broadcast station
674
91.3%
0.8
Internet access
662
97.2%
0.5
Telephony
674
88.8%
1.1
Digital programming
388
98.1%
0.4
HD programming
388
91.7%
0.8
Noncompetitive Communities
HD simulcast of a broadcast station
388
90.7%
0.9
Internet access
380
97.0%
0.6
Telephony
388
88.3%
1.2
Digital programming
286
98.3%
1.2
HD programming
286
96.0%
1.5
Communities relieved from rate HD simulcast of a broadcast station
286
94.1%
1.8
regulation
Internet access
282
97.9%
1.2
Telephony
286
91.1%
2.3
Digital programming
107
99.6%
0.4
HD programming
107
95.5%
2.2
Second cable operator subgroup HD simulcast of a broadcast station
107
96.1%
1.7
(overall)
Internet access
103
99.2%
0.6
Telephony
107
94.0%
1.9
Digital programming
55
100.0%
0.0
HD programming
55
96.4%
2.5
Second cable operator subgroup HD simulcast of a broadcast station
55
98.2%
1.8
(incumbents)
Internet access
55
100.0%
0.0
Telephony
55
98.2%
1.8
Digital programming
52
98.1%
1.9
HD programming
52
92.3%
3.7
Second cable operator subgroup HD simulcast of a broadcast station
52
88.5%
4.5
(rivals)
Internet access
48
95.8%
2.9
Telephony
52
78.8%
5.7
Digital programming
78
97.4%
1.8
HD programming
78
96.2%
2.2
DBS subgroup
HD simulcast of a broadcast station
78
93.6%
2.8
Internet access
78
97.4%
1.8
Telephony
78
89.7%
3.5
Digital programming
33
100.0%
0.0
HD programming
33
100.0%
0.0
Wireless MVPD subgroup
HD simulcast of a broadcast station
33
100.0%
0.0
Internet access
33
100.0%
0.0
Telephony
33
100.0%
0.0
Digital programming
68
100.0%
0.0
High definition programming
68
88.2%
3.9
Low penetration test subgroup
HD simulcast of a broadcast station
68
79.4%
4.9
Internet access
68
94.1%
2.9
Telephony
68
77.9%
5.1
Source: 2007/2008 survey.
73

Federal Communications Commission

DA 09-53

Attachment 15

Subscribers to Various Cable Services

January 1, 2006

Percent of Basic Cable TV Subscribers Who Subscribe to the Service

Sample Group

Cable Service

N

Mean

S.E

Digital video programming
747
41.8%
0.6
HD video programming
745
6.7%
0.2
Sample groups overall
Cable Internet Access
745
34.8%
0.5
Circuit switched telephony
752
3.3%
0.4
VOIP telephony
746
3.4%
0.3
Digital video programming
429
41.6%
0.7
HD video programming
428
6.8%
0.2
Noncompetitive
Cable Internet Access
428
34.6%
0.6
Communities
Circuit switched telephony
434
3.3%
0.4
VOIP telephony
428
3.4%
0.4
Digital video programming
318
43.5%
0.9
HD video programming
317
6.3%
0.3
Communities relieved from
Cable Internet Access
317
36.5%
0.9
rate regulation
Circuit switched telephony
318
3.5%
0.6
VOIP telephony
318
3.1%
0.3
Digital video programming
106
43.3%
1.2
HD video programming
106
6.3%
0.4
2nd cable operator subgroup Cable Internet Access
106
41.7%
1.5
(overall)
Circuit switched telephony
106
7.9%
1.6
VOIP telephony
106
4.0%
0.5
Digital video programming
54
46.8%
1.3
HD video programming
54
7.1%
0.5
2nd cable operator subgroup Cable Internet Access
54
38.4%
1.8
(incumbents)
Circuit switched telephony
54
5.2%
1.7
VOIP telephony
54
3.2%
0.6
Digital video programming
52
32.8%
2.9
HD video programming
52
3.9%
0.4
2nd cable operator subgroup Cable Internet Access
52
51.7%
2.9
(rivals)
Circuit switched telephony
52
15.9%
4.3
VOIP telephony
52
6.5%
1.1
Digital video programming
125
42.6%
1.3
HD video programming
124
5.8%
0.4
DBS subgroup
Cable Internet Access
125
33.5%
1.3
Circuit switched telephony
125
1.1%
0.5
VOIP telephony
125
2.8%
0.5
Digital video programming
31
46.3%
2.2
HD video programming
31
8.7%
0.8
Wireless MVPD subgroup
Cable Internet Access
31
39.9%
1.9
Circuit switched telephony
31
3.8%
1.3
VOIP telephony
31
3.0%
0.6
Digital video programming
56
46.0%
3.6
HD video programming
56
4.8%
0.7
Low penetration test
Cable Internet Access
55
27.4%
2.7
subgroup
Circuit switched telephony
56
5.4%
3.0
VOIP telephony
56
0.4%
0.1
Source: 2006 survey.
74

Federal Communications Commission

DA 09-53

Attachment 15-a

Subscribers to Various Cable Services

January 1, 2007

Percent of Basic Cable TV Subscribers Who Subscribe to the Service

Sample Group

Cable Service

N

Mean

S.E

Digital video programming
660
46.2%
0.7
HD video programming
659
10.9%
0.3
Sample groups overall
Cable Internet Access
639
39.6%
0.5
Circuit switched telephony
647
3.5%
0.5
VOIP telephony
646
7.5%
0.4
Digital video programming
379
45.6%
0.8
HD video programming
379
10.7%
0.3
Noncompetitive Communities
Cable Internet Access
365
39.3%
0.6
Circuit switched telephony
375
3.3%
0.6
VOIP telephony
374
7.8%
0.5
Digital video programming
281
48.8%
1.4
HD video programming
280
11.9%
0.7
Communities relieved from
Cable Internet Access
274
40.5%
1.1
rate regulation
Circuit switched telephony
272
4.3%
0.7
VOIP telephony
272
6.5%
0.6
Digital video programming
102
49.9%
1.6
HD video programming
102
11.3%
0.8
2nd cable operator subgroup
Cable Internet Access
102
46.3%
1.7
(overall)
Circuit switched telephony
99
9.2%
1.7
VOIP telephony
99
10.4%
1.1
Digital video programming
55
50.5%
1.6
HD video programming
55
12.0%
0.9
2nd cable operator subgroup
Cable Internet Access
54
43.8%
1.9
(incumbents)
Circuit switched telephony
55
4.2%
1.6
VOIP telephony
55
11.4%
1.3
Digital video programming
47
47.3%
4.3
HD video programming
47
8.4%
1.1
2nd cable operator subgroup
Cable Internet Access
48
55.9%
3.4
(rivals)
Circuit switched telephony
44
30.9%
5.5
VOIP telephony
44
6.5%
1.8
Digital video programming
78
47.6%
2.2
HD video programming
77
11.8%
1.1
DBS subgroup
Cable Internet Access
72
38.6%
1.6
Circuit switched telephony
76
2.7%
0.9
VOIP telephony
76
5.1%
0.8
Digital video programming
33
54.3%
1.8
HD video programming
33
15.8%
0.8
Wireless MVPD subgroup
Cable Internet Access
33
42.6%
1.6
Circuit switched telephony
33
4.3%
1.6
VOIP telephony
33
8.2%
1.1
Digital video programming
68
48.7%
2.0
HD video programming
68
6.2%
0.7
Low penetration test subgroup
Cable Internet Access
67
36.8%
2.0
Circuit switched telephony
64
3.3%
1.4
VOIP telephony
64
5.3%
0.8
Source: 2007/2008 survey.
75

Federal Communications Commission

DA 09-53

Attachment 15-b

Subscribers to Various Cable Services

January 1, 2008

Percent of Basic Cable TV Subscribers Who Subscribe to the Service

Sample Group

Cable Service

N

Mean

S.E

Digital video programming
671
54.4%
0.8
HD video programming
670
17.3%
0.5
Sample groups overall
Cable Internet Access
657
44.6%
0.6
Circuit switched telephony
652
3.0%
0.5
VOIP telephony
652
14.4%
0.5
Digital video programming
388
54.0%
0.9
HD video programming
388
17.2%
0.6
Noncompetitive
Cable Internet Access
375
44.4%
0.7
Communities
Circuit switched telephony
379
2.8%
0.5
VOIP telephony
379
14.8%
0.6
Digital video programming
283
56.3%
1.5
HD video programming
282
17.8%
0.9
Communities relieved from
Cable Internet Access
282
45.9%
1.2
rate regulation
Circuit switched telephony
273
3.7%
0.7
VOIP telephony
273
12.5%
0.8
Digital video programming
104
56.7%
1.6
HD video programming
104
18.2%
1.1
2nd cable operator subgroup Cable Internet Access
103
51.5%
1.8
(overall)
Circuit switched telephony
99
9.3%
1.6
VOIP telephony
99
17.1%
1.5
Digital video programming
55
57.4%
1.7
HD video programming
55
19.0%
1.3
2nd cable operator subgroup Cable Internet Access
55
49.3%
2.1
(incumbents)
Circuit switched telephony
55
4.2%
1.6
VOIP telephony
55
19.0%
1.7
Digital video programming
49
54.0%
4.1
HD video programming
49
15.2%
2.0
2nd cable operator subgroup Cable Internet Access
48
60.3%
3.5
(rivals)
Circuit switched telephony
44
31.1%
5.4
VOIP telephony
44
9.3%
2.5
Digital video programming
78
54.8%
2.3
HD video programming
77
17.5%
1.3
DBS subgroup
Cable Internet Access
78
43.9%
1.8
Circuit switched telephony
77
2.0%
0.9
VOIP telephony
77
11.0%
1.2
Digital video programming
33
65.3%
1.9
HD video programming
33
23.1%
0.8
Wireless MVPD subgroup
Cable Internet Access
33
49.0%
1.8
Circuit switched telephony
33
4.3%
1.8
VOIP telephony
33
13.7%
1.7
Digital video programming
68
55.1%
1.9
HD video programming
68
9.4%
1.0
Low penetration test
Cable Internet Access
68
41.6%
2.2
subgroup
Circuit switched telephony
64
3.2%
1.5
VOIP telephony
64
11.0%
1.3
Source: 2007/2008 survey.
76

Federal Communications Commission

DA 09-53

APPENDIX A

Survey Methodology

A.

Sampling Procedure

57.
As explained in more detail below, our sample design for 2006 and 2007/2008 follows
the approach used in prior years.1 Specifically, as in past years, we pick the sample from the list of cable
operator community units the Commission assigns to each cable operator for each community served.
Before picking the sample, we divide the list into groups (or strata) by separating them into
noncompetitive communities and communities relieved from rate regulation. In addition, we further
break up the noncompetitive and competitive communities into smaller groups. The noncompetitive
community units are broken up by size. The competitive community units are broken up by type of
competition (i.e., overbuild communities). The sample is drawn by choosing a specific number of
community units from each group. The purpose of separating the data into distinct groups before
choosing the sample is to achieve a desirable level of precision in the price estimates for each group.
Finally, we take steps to ensure the accuracy and reliability of the raw data upon which the report is
based. The explanation below builds on the survey methodology discussion included in prior reports by
describing our methodology in additional detail.
58.
Our samples were drawn from the list of community unit identifiers the Commission
assigns to each cable operator for each community that a cable operator serves.2 Before drawing our
sample, we divided the list into noncompetitive communities and communities relieved from rate
regulation, depending on whether the Commission had made a finding of effective competition in that
community.3 Next, we assigned each noncompetitive community to one of five subgroups (or strata)
very large, large, medium, small, and very small depending on the number of subscribers served by the
cable system.4 Communities relieved from rate regulation were also assigned to subgroups
communities with a second cable operator, with a sufficient level of DBS subscribers, within range of a
wireless MVPD, or low penetration depending on the primary basis for the finding of effective
competition.5 Communities with a second cable operator were further divided into incumbent cable
operators and rival cable operators. Attachments 1-a and 1-b provide additional information on these
sample groups.6


1 See Appendix A at 58 and notes 12 and 16 below.
2 See 47 C.F.R. 76.1801.
3 These effective competition findings consisted of findings made as of January 1, 2006 and January 1, 2008,
respectively, for the 2006 survey and 2007/2008 survey.
4 For an explanation of stratified sampling methods, see, e.g., G. W. Snedecor and W. G. Cochran, Statistical
Methods,
7th ed. (1980) at 435-59.
5 Similar to the noncompetitive subgroups, the operators within the subgroups of communities relieved from rate
regulation tend to have similar prices.
6 As in previous surveys, we used the most recent 1994 FCC Form 325 census of cable subscribers at the community
level. The census was supplemented by more current information when available from effective competition filings.
If a cable operator serving a community was not active at the time of the census or reported a subscriber count of 1
or less, we used average number of subscribers for the type of municipality the community represents (e.g.,
incorporated city). For the 2007/2008 survey, we adjusted these subscriber counts by national growth in cable
subscribers from the time of the census until 2008. Due to this adjustment, we changed the size threshold of the
very large subgroup from 50,001 to 75,001 subscribers.
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59. To determine the number of communities required to achieve statistical precision in our
samples, we applied a sampling formula.7 This formula includes parameters for the confidence interval of
the price estimate, which we set at 95 percent probability of being within one percent of the actual price
of expanded basic service. After we derived the number of sample selections from the formula, we
increased the number of selections if necessary, to a minimum number per subgroup.8 We also increased
sample observations to account for an expected non-response rate to our survey questionnaire in each
subgroup on the basis of previous surveys.
60.
For the 2006 survey, sample size equaled 458 of the 31,743 communities in the
noncompetitive group and 334 of 2,055 communities relieved from rate regulation.9 For the 2007/2008
survey, the sample size equaled 412 of the 30,352 communities in the noncompetitive group and 300 of
3,205 communities relieved from rate regulation.10
61.
After determining sample sizes, we assigned every community in the subgroup a known
probability of being included in the sample.11 Over the past years, the FCC has improved its sampling
procedure within strata to ensure that communities in the non-continental U.S. have appropriate
representation in the sample and to improve the FCC's ability to measure the effects of overbuilding.12


7 See B. J. Mandel, Statistics for Management (1984) at 258.
8 Estimates in general are reasonably robust with a minimum sample size of 30 observations. See C. A. Boneau, The
Effects of Violations of Assumptions Underlying the t test,
Psychological Bulletin, 57 (1960) at 49-54.
9 This 16.3 percent sampling fraction for communities relieved from rate regulation is relatively high compared to
the noncompetitive group (1.4 percent) because there are relatively fewer communities relieved from rate regulation
and a minimum number of sample observations are needed for statistical precision. Details of the 2006 sample are
reported in Attachment 1-a.
10 This 9.5 percent sampling fraction for communities relieved from rate regulation is lower than that in the 2006
survey, reflecting growth in the group of communities relieved from rate regulation, from 2,055 to 3,205
communities between the 2006 and 2007/2008 surveys. According to the sampling formula, larger populations
generally require a lower sampling fraction. The sampling fraction was also lower because price variance in the
DBS subgroup declined between the time of the 2006 survey and 2007/2008 survey. Lower price variance reduces
the necessary number of sample selections. Details of the 2007/2008 sample are reported in Attachment 1-b.
11 For documentation on the method used to select our samples, see SAS Institute, SAS OnlineDoc 9.1.3. Cary,
NC: SAS Institute Inc. (2006) at support.sas.com. We ran the Surveyselect Procedure, PPS method (probability
proportional to size without replacement) with the strata and size options. In the SAS program, the PPS method
assigns a probability of selection, ranging from 0 to 1, for each community on the basis of size of the community.
The program then makes random selections in accordance with those probabilities. Not uncommon with large
sample sizes under the PPS method, the mathematical probability initially exceeded 1 for the largest communities in
some strata, where a value of 1 is the maximum allowable probability. Subsequently, for sampling purposes only,
we set a maximum community size at which no probability would exceed 1. We adjusted the subscriber counts in
those communities down to this maximum, as recommended in the SAS documentation. This adjustment was made
for sampling purposes only and in effect lowered the sampling weight of some of the largest communities.
12 This probability of selection generally depended upon our estimate of the number of subscribers in the community
relative to all communities in the stratum. However, if a community was a "state or federal reservation," such as a
military base, or a "privately owned settlement" such as a resort, it was assigned the minimum weight of 1
subscriber. If a community was a "privately owned settlement" such as a resort, and was not part of the very large
stratum or large stratum, it was assigned a weight of 1 subscriber. In addition, adjustments were made to the
selection probabilities of some communities in Alaska, Hawaii, Guam, and Puerto Rico. All except 35 communities
were assigned a weight of 1 subscriber. The weights of the 35 communities were based on the actual number of
subscribers. All the communities regardless of weight were included in the sample pool. Because these areas have a
high number of small communities, this served to diversify the sample in stratum where we were selecting small
(continued....)
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Because of these adjustments to the sampling procedure, in the future, the FCC may want to consider
applying weighted averages within the strata as well. Consistent with past reports, we calculate weighted
average cable prices using the subscriber weights associated with the sampling strata.
62.
For each community in the sample, we asked the cable operator serving the community
to complete a questionnaire. In communities where the Commission has made a finding of effective
competition on the basis of competition from a rival cable operator, we asked both the incumbent and the
second cable operator to complete a questionnaire. We made the questionnaire available in electronic
spreadsheet format. Each cable operator in the sample downloaded a copy of the questionnaire from a
Commission website and e-mailed back a completed questionnaire for each of its communities in the
sample. A responsible party within the company was asked to certify the completeness and accuracy of
the company's responses. Some cable operators had multiple questionnaires to complete. Because our
sample was designed to produce overall population averages, larger cable operators were responsible for
completing more questionnaires relative to smaller cable operators. The survey response rate (ratio of
completed to requested questionnaires) equaled 95 percent for both the 2006 survey and the 2007/2008
survey.13

B.

Data Quality Control

63.
A number of steps were taken to improve the accuracy and reliability of the raw data
upon which this report is based. First, as indicated above, a responsible party within each cable operator's
company was asked to certify the completeness and accuracy of that company's response. Next, we
systematically examined all responses returned to us in the completed questionnaires to ensure that all
responses were complete, appeared to be reasonably accurate, and appeared reliable. The responses were
audited using statistical quality-control tests to identify observations with apparent inaccuracies. For
example, when a particular response was found to be outside of its expected reasonable range, internally
inconsistent, or missing, we examined all of the information on that questionnaire more closely. Finally,
we examined the data in the tables created for the report as a second layer of quality control to ensure the
accuracy of the underlying data. After our examination, we contacted the cable operator in question and
asked that the operator correct all responses on that questionnaire that appeared unreasonable, or provide
information needed to complete missing responses. We asked the cable operators to double-check their
answers and revise their responses to particular questions as necessary. In all cases, the cable operators
we contacted cooperated with these requests and submitted revised data.14 Of the 70 MSOs and
individual cable operators in the sample in 2006, 32 operators were asked to review their responses. Of
the 92 MSOs and individual cable operators in the sample in 2007/2008, 55 operators were asked to


(...continued from previous page)
samples. For example, without the adjustment up to a third of the sample in the low penetration stratum might have
consisted of communities in Puerto Rico in close geographic proximity and operated by the same company. Finally,
in the 2006 survey, for the second cable operator stratum we independently sampled incumbent and rival cable
operators. That is, selection of an incumbent did not necessarily mean that the rival in the community would be
selected, and the other way around. For the 2007/2008 survey, however, we selected geographic communities, with
jointly both the incumbent and rival, selected using the SAS Surveyselect, PPS method, as described in the
preceding footnote.
13 The supplemental survey taken in 2006 had a response rate of 90 percent. The same operators were surveyed for
the supplemental as for the initial survey and the pattern of responses and non-responses was similar for both
surveys. The higher rate of non-response was due primarily to the sale or transfer of cable systems subsequent to the
initial survey.
14 In some instances in which "channel lineup" information was missing or appeared incorrect, the information was
obtained from cable operators' publicly available websites.
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review their responses. Each of these operators replied with either a data correction or reasonable
explanation as to why a particular response was plausible.15 In the case of missing data, some cable
operators provided the data and others explained that the company did not collect the particular
information. Missing values were excluded from the study.

C.

Sampling Accuracy

64.
After the survey data were collected and checked, estimates of population averages and
sampling variances were calculated for the responses to each question. Results of these calculations are
presented in this report. Averages of strata were calculated as simple unweighted averages. Industry-
wide and group averages were calculated as weighted averages of the strata. Weights were based on the
relative number of industry-wide or group subscribers in the stratum.
65.
Because our survey is based on a sample of communities rather than a 100 percent
census, the price averages in this report are subject to sampling variance. Expanding the survey to
include all communities might increase accuracy, but would also increase the cost of the report. Our
sample results are likely to be different from results that would be obtained if we were able to collect
prices from all communities nationwide. The attachments report estimates of sampling variance or
statistical "standard error" for each price average calculated. Standard errors can be used to express a
degree of confidence that the true average falls within a range around a sample average. Degree of
confidence is usually expressed as assurance that in 95 out of 100 similar samples, the true average will
fall within the stated range (the "95 percent confidence interval").16 Standard errors can also identify
whether or not differences in prices, either over time or between noncompetitive communities and
communities relieved from rate regulation, are statistically significant at a 95 percent confidence level.
66.
Sample designs were essentially the same for the 2005, 2006, and 2007/2008 surveys. 17
Cable operators were asked to report cable prices and other information related to cable service as of
January 1, 2006 and January 1, 2005 for the 2006 survey and as of January 1, 2008, January 1, 2007, and
January 1, 2006 for the 2007/2008 survey. This enables us to compute percentage changes in price over
two-year periods. Comparing short-term price averages and percentage changes from the same survey
sample increases statistical confidence in the estimate of percentage change. In addition to random
sampling variance (a different group of cable operators is selected for each sample), change in
compositions of the sample groups may affect the calculated average.18


15 In addition, we subsequently identified several extreme values in the statistical analysis stage of data review and
removed from the database. For example, we identified several extreme values after we transformed receipts data
into receipts per subscriber. We identified these values using Grubb's test at a 99 percent probability level, and
removed these values after concluding each resulted from measurement error. See F. E. Grubbs, Procedures for
Detecting Outlying Observations in Samples
, Technometrics, 11, 1 (1969) at 1-21.
16 This "95 percent confidence interval" is the range surrounding the sample average plus or minus 1.955 multiplied
by the standard error. For example, the price for expanded basic service as of January 1, 2006 averaged $45.25, and
the standard error was 16 cents, as shown in Attachment 2. We estimate at a 95 percent confidence level that the
true average lies between $44.94 and $45.56. We arrive at the lower end of the range by subtracting 1.955 x $0.16
from our average of $45.25. We arrive at the upper end by adding 1.955 x $0.16 to $45.25.
17 The 2005 survey design included a sampling rule limiting the number of observations to one community per
county per cable operator. This sampling rule did not produce its intended effect of increasing the diversity of cable
operators selected. It was therefore not used in the 2006 or the 2007/2008 surveys.
18 See, e.g., D. Holt and C. J. Skinner, Components of Change in Repeated Surveys, International Statistical Review,
57 (1989) at 1-18.
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APPENDIX B

Econometric Analysis

A.

Introduction

1. Below we describe a model that examines the effects of market structure as well as demand
and cost factors on cable prices. The model is based on the textbook paradigm of "structure-conduct-
performance," i.e., performance is affected by conduct (of buyers and sellers), which in turn is affected
by structure (of the relevant market).19 A majority of the studies have used market concentration as a
measure of structure, and price or profit as a measure of performance. In this study, we use the same
econometric regression analysis techniques that have been used previously and apply these techniques to
the MVPD market to estimate the effects of market concentration on the price of cable service.20

B.

Model Specification

2. Through our Price Survey, we created a data set based on responses from cable operators for
the years 2006-2008. Following the approach taken in previous empirical studies, we consider two
specifications of the following log linear relationship between cable prices and market concentration
along with other explanatory variables: For each cable community:
Ln(Price) = o + 1 ln(HHI) + 2 ln(Income) + 3 ln(National Subscribers) + 4 ln(Capacity) + 5
ln(Density) + 6 ln(Density Squared) + 7 (Vertical Affiliation) + 8 (Overbuild Competition) + 9
(Local-into-Local) + 10 ln(Channels) + 11(2007) + 12(2008) + .
Where:
Price = price for expanded basic cable service,
HHI = the Herfindahl-Hirschman Index in the main zip code of the cable community,
Income = median family income in the county containing the cable community,
National Subscribers = number of subscribers served by the cable operator's parent company,
Capacity = cable plant capacity in megahertz (MHz),
Density = population density per square mile in the county containing the cable community,


19 The estimation of the relationship between market concentration and measures of firm performance was pioneered
by Collins and Peterson in their 1969 study of the effects of concentration on profits in 417 industries. N. Collins
and L. Peterson, Price-Cost Margins and Industry Structure, Review of Economics and Statistics, 51 (Aug. 1969) at
27-2. Later, Weiss used a slightly different model specification to estimate the effects of concentration on
profitability. L. Weiss, The Concentration-Profits Relationship and Antitrust, in H. Goldschmidt et al, Industrial
Concentration: The New Learning
(1974), updated in F.M. Scherer and D. Ross, Industrial Market Structure and
Economic Performance,
3rd Ed. (1990) (Scherer and Ross). Since the publication of these two seminal articles,
regressions of profit/price on concentration have become a frequently used empirical tool in industrial organization
literature. See, e.g., T.F. Bresnahan, Empirical Studies of Industries with Market Power, R. Schmalnsee and R.
Willig, Handbook of Industrial Organization Vol. II (1989) at Ch. 17; Scherer and Ross at 4-5; M.D. Whinston,
Lectures on Antitrust Economics: Chapter 3 at 27, www.csio.econ.northwestern.edu (Whinston); W.N Evans, L.
Froeb, and G. Werden, Endogeneity in the Concentration-Price Relationship: Causes, Consequences, and Cures,
Journal of Industrial Economics (Dec. 1993) at 431-38 (Evans, Froeb, and Werden); and L. Weiss, The Structure-
Conduct-Performance Paradigm and Antitrust,
127 U. Pa. L. Rev. 1104 (1978-79).
20 The MVPD "product market" in this study consists of cable, cable overbuilders (including telephone company
fiber and DSL delivered video service), and direct broadcast satellite (DBS) operators.
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Vertical Affiliation = an indicator variable indicating whether a cable operator was affiliated with one or
more programming networks,
Overbuild Competition = an indicator variable indicating that a petition requesting a finding of effective
competition based on a second cable operator in the community had been granted,
Local-into-Local = an indicator variable indicating that at least one DBS operator offered local broadcast
channels in the community,
Channels = the number of channels, including local broadcast channels, the cable operator offered on the
expanded basic tier in each cable community,
2007 and 2008 = indicator variables for the years 2007 and 2008, and
= error term.
3. The equation above includes variables representing market structure as well as demand and
cost factors. Certain variables can influence both demand and cost. For example, the "income" variable
can be considered both a demand and a cost factor. Higher income is generally associated with
increased ability to pay for cable services (thus influencing demand), but may also mean that higher
labor cost prevails in the area, thus contributing to higher cable prices.
4. The "capacity" variable measures the cable plant capacity and represents a combination of
cost and demand factors. Higher MHz may enable a cable operator to provide more channels and a
variety of services, including Internet access and telephony, which may lead to higher demand. But
upgrading the cable plant to provide increased capacity in MHz also requires investment capital and so
represents a cost factor. Cable operators have upgraded their plans both to provide advanced services
and to meet competition from other MVPDs, particularly DBS. The "channel" variable measures the
number of channels offered in the expanded basic package, and thus provides a quality measure, and
allows the capacity variable to model more closely the availability of spectrum for advanced services
other than traditional cable video service.
5. The "density' variable represents a cost factor. In higher density areas, fixed costs are
spread across a greater number of households. Given cable operator behavior in clustering around major
metropolitan areas, it is likely that economies of scale are associated with clustering, and thus that
economies of scale overwhelm the marginal cost associated with serving more customers in higher-
density areas. This would be represented by a negative sign on the density coefficient.
6. The "local-into-local" variable indicates the presence of more intense local competition from
DBS in the MVPD market and thus may be associated with lower cable prices in the area. Similarly the
"overbuild competition" variable is included in the model to measure competition when a second cable
operator is providing service in the same cable community. Generally, as shown in the report above, the
presence of a second wireline MVPD leads to lower prices in "overbuild" communities.21
7. The "vertical affiliation," "HHI," and "national subscribers" variables are three variables
that represent market structure in the equation. If a vertically integrated cable operator has cost savings
or increased efficiencies due to the ownership of or affiliation with one or more programming networks,


21 In the 2005 survey we used an "effective competition" dummy variable to measure the intensity of price
competition. This variable included communities that met all four tests for a finding of effective competition by the
Commission. We believe, as shown in the report above, that the overbuild variable captures a more intense price
competition in overbuild communities than in communities that are found to be competitive on the basis of meeting
either the DBS or the low penetration test. See Tables 1, 1-a, and 1-b, supra, of this report.
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then the prices charged by the affiliated cable operator may be lower if some of these benefits are passed
on to consumers. 22
8. The HHI is a measure of concentration that is calculated by summing the squared market
shares of the participants in the market. It is a measure of concentration that takes account of the
distribution of the size of firms in the market. The HHI varies with the number of firms in the market
and degree of inequality among firm size. Generally, the HHI increases when there are fewer firms in
the market.
9. A positive relationship between HHI and prices is expected where a dominant firm is able to
exploit its dominant position and charge higher prices than its competitors. Higher prices as a result of
unilateral action by the dominant firm may in many instances lead to a loss of consumer welfare.
However, a positive relationship between HHI and prices can also result if the markets in which firms
have larger market shares tend to be markets with higher costs. In these circumstances, HHI may not be
a good indicator of market power, and higher prices may not represent a loss of consumer welfare.23
10. The variable indicating the number of nationwide subscribers indicates the overall size of
the parent company of the cable operator. If large cable operators have a cost advantage over smaller
operators, then prices should be lower in areas served by a cable operator that has a large number of
subscribers nationwide. The year indicator variables reflect unexplained variation in cost and market
factors over time.
11. Although the above equation provides a useful analysis of the effects of market structure and
other demand and cost variables on prices, it may suffer from endogeneity due to a simultaneous
relationship between market shares and prices. Over time, markets that exhibit higher prices may attract
increased investment, increased research and development, and the entry of new competitors, thus
affecting market shares. One consequence of the endogeneity of market shares is that the use of the
ordinary least squares (OLS) technique to estimate the equation will lead to biased conclusions because
of the correlation between the market share variable and the error term, which would violate one of the
basic assumptions of OLS.24
12. To correct for the endogeneity of market share, we use two-stage least squares to estimate
the equation. This technique purges the link between an endogenous explanatory variable and the error
term by using appropriate exogenous variables as instruments. The selected instruments must be
indirectly correlated with the dependent variable (price) through its effect on the endogenous explanatory
variable (market share) but not directly correlated with price. We note that it is difficult to find variables
that meet this test in the purest sense, so we use the variables available that most closely meet this
definition.25 We use two variables related to market size and the cost of entry into the market as
instruments. Specifically, we use the following variables as instruments: the fraction of households in
the county that are located in an urban area and location of franchise area in terms of latitude.26 The


22 See T. Chipty, Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry,
American Economic Review (Jun. 2001) at 428-53.
23 See C.M. Newmark, Price-Concentration Studies: There You Go Again, DOJ/FTC Joint Workshop on Merger
Enforcement, Concentration and Market Shares panel (Feb. 2004) (Newmark).
24 For a discussion of ordinary least squares and endogeneity, see J. Wooldridge, Introductory Econometrics (2003)
at Ch 15 (Woodbridge).
25 Statistical tests on the first stage of estimation indicate that the variables function reasonably well as instruments.
26 To employ a more parsimonious relationship, this study uses percent of urban households as an instrument in
place of "number of households" and "percent of multiple dwelling units" variables used in the 2005 survey. In
(continued....)
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latitude variable affects consumer ability to receive DBS service; a higher latitude (i.e., further north)
requires a dish angle pointing closer to the horizon and thus increases the probability that terrain will
block the signal. Similarly, in urban areas, there is a higher probability that buildings will block
consumer ability to aim dishes at DBS satellites.27
13. We use the natural log of the variables to estimate the equation. We choose the log linear
form so that the estimated coefficients can be interpreted as elasticities. HHI is based on subscriber
information found in data from Centris.28 The cable price, cable channels, national subscribers, capacity,
overbuild competition, local-into-local, and year dummy variables are from the price survey. Vertical
affiliation is based on information provided in the Video Competition Report.29 All other variables are
from the Census Bureau.
14. The difference between the two specifications concerns the observations that are included,
based on the overbuild variable. In the first specification, there were 1,993 observations for which data
were complete. In this specification, the overbuild coefficient shows the percentage difference in price
between markets with overbuild competition and those without competition, without distinguishing
between the overbuilder and the incumbent. In the second specification, the overbuilder observations are
excluded, so that the overbuilder coefficient shows the difference in price between an incumbent cable
operator facing overbuild competition and an incumbent cable operator not facing overbuild competition.
This specification uses 1,846 observations. We estimated two specifications because we wanted to
investigate the difference between incumbent behavior and total cable operator behavior in overbuilt
markets.

A.

Results

15. The tables below report the estimated regression coefficients.


(...continued from previous page)
addition, because we replaced the "effective competition" variable with the "overbuild competition" variable in the
second stage of estimation, overbuild competition is no longer used as an instrument.
27 Entrants have also reported difficulty gaining access to apartment buildings, which represent a greater percentage
of households in urban areas.
28 Centris conducts thousands of surveys of households on the use of various telecommunications services. These
surveys are then used to model typical telecommunications usage for various areas, and the likely usage is
extrapolated down to the Census block level. We matched price survey data to Centris data based on the main zip
code in the cable community.
29 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
), 2006 Report, adopted November 27, 2007.
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First Regression Estimation: Includes Both Incumbent and Overbuilder in Overbuilt Markets

Dependent Variable (Log Price)

Estimated Coefficient

t-Statistic
Log HHI
0.110***
3.23
Log Income
0.042***
3.76
Log National Subscribers
0.029***
14.55
Log Capacity
0.074***
3.46
Log Density
-0.000
0.21
Log Density Squared
0.000
0.03
Overbuild Competition
-0.112***
12.14
Local-into-Local
0.032***
4.22
Vertical Affiliation
-0.071***
7.84
Log Channels
0.118***
3.92
2007
0.054***
9.60
2008
0.106***
16.66
Constant
0.993***
3.25
Observations
1993
---
Centered R-Squared
0.46
---
Root Mean Squared Error
0.103
---
Significant at: *** 99-percent confidence level.

Second Regression Estimation: Includes only Incumbent Observations in Overbuilt Markets

Dependent Variable (Log Price)

Estimated Coefficient

t-Statistic
Log HHI
0.072**
2.26
Log Income
0.026**
2.31
Log National Subscribers
0.030***
14.58
Log Capacity
0.071***
3.22
Log Density
-0.000
0.87
Log Density Squared
0.000
0.69
Overbuild Competition
-0.141***
10.89
Local-into-Local
0.034***
4.43
Vertical Affiliation
-0.059***
7.01
Log Channels
0.130***
4.06
2007
0.051***
9.08
2008
0.100***
16.18
Constant
1.834***
4.91
Observations
1846
---
Centered R-Squared
0.47
---
Root Mean Squared Error
0.099
---
Significant at: *** 99-percent confidence level; ** 95-percent confidence level.
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16. All of the estimated regression coefficients have the sign that was expected, and generally
show high levels of statistical significance, except for the local-into-local and density variables.30 The
three structural variables nationwide subscribers, local HHI, and vertical affiliation are significant at
the 99 percent confidence level. The positive relationship between cable prices and HHI may suggest a
structure-conduct nexus in which cable operators with high market shares wield unilateral market power
to charge higher prices. The estimated coefficient for cable operators with a parent company having a
large number of nationwide subscribers is positive and significant. This result may reflect large MSO
market power, or may be a consequence of a greater adoption of advanced services such as digital video
recorders ("DVRs"). The year indicator variables are positive and significant, reflecting the general rise
in cable prices over time.
17. A few numerical examples are helpful to illustrate the possible unilateral market power
represented by the positive coefficient estimated for the HHI variable. Recall that the specification is
based on natural logs, so the coefficients represent percentage changes, and that the coefficient in the
first equation for HHI is approximately negative 0.11. This coefficient indicates that, all other things
being equal, if the cable operator in a local community managed to acquire a higher market share that led
to the HHI in that market increasing by 10 percent, cable price in that market would increase 1.1 percent.
Similarly, if the cable operator in a local community managed to acquire a higher market share that led
to the HHI in that market increasing by 20 percent, cable price in that market would increase 2.2 percent.
Conversely, if the cable operator in a local community lost market share so that the HHI in that market
decreased by 10 percent, cable price in that market would decrease 1.1 percent.
18. To make the example even more concrete, consider the situation when the Verizon FiOS
market share increases. Suppose that the cable operator served 65 percent of MVPD households, each
DBS provider served 12.5 percent, and Verizon served 10 percent, for an HHI of 4,637.5. Suppose
Verizon's market share increased to 20 percent of MVPD households, and that 5 percent came from the
cable operator and that 2.5 percent came from each DBS provider. The HHI post-entry would drop 9.4
percent to 4,200. In this situation, based on the coefficient from the first equation, we would predict a
one percent decrease in the price of the cable operator's expanded basic package. We note that the effect
on prices of a shift in market share between incumbents and rivals is less pronounced than the effect on
prices of initial entry as measured by the overbuild variable, which is at least ten times greater.
19. Prices are lower in franchise areas where the cable operators are vertically affiliated with
one or more programming networks than in areas where the cable operator is not so affiliated. The
negative coefficient for the vertically integrated variable suggests that vertically integrated operators
pass some of their cost savings to their subscribers. A significant and positive coefficient for the
capacity variable indicates that prices tend to be higher in areas with higher-capacity cable systems,
presumably reflecting higher costs of providing cable services. A negative coefficient for the density
variable indicates efficiencies with increasing density, resulting in lower prices. The positive coefficient
for density squared, however, indicates that this relationship bottoms out at some level of population
density. It may be that it is very expensive to maintain a system in the highest-density areas such as in
major cities. The estimated results also show that higher income leads to higher cable prices due to
increased demand and/or higher labor costs.
20. One further interesting result is the fact that the magnitude of the coefficient for overbuilders


30 Due to the continued roll out of DBS local-into-local service, there may be insufficient variation among
communities to explain price changes in the model. The density variables have the expected signs, but are not
statistically significant.
86

Federal Communications Commission

DA 09-53

is greater when the overbuilders themselves are excluded. This indicates that incumbent cable operators
are not matching overbuilder prices, but rather are undercutting them. Thus, the regressions indicate that
cable operators are not accommodating entry, but instead are responding aggressively, perhaps as a
signaling mechanism to discourage entry in other communities. Further statistical tests would be
required to determine the statistical significance of this result, but this finding points to an interesting
avenue for further research.
87

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