[Federal Register: July 1, 2004 (Volume 69, Number 126)]
[Notices]
[Page 39930-39933]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01jy04-85]
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FEDERAL COMMUNICATIONS COMMISSION
[MB Docket No. 04-227, FCC 04-136]
Annual Assessment of the Status of Competition in the Market for
the Delivery of Video Programming
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: The Commission is required to report annually to Congress on
the status of competition in markets for the delivery of video
programming. This document solicits information from the public for use
in preparing the competition report that is to be submitted to Congress
in December 2004. The document will provide parties with an opportunity
to submit comments and information to be used in conjunction with
publicly available information and filings submitted in relevant
Commission proceedings to assess the extent of competition in the
market for the delivery of video programming.
DATES: Comments are due on or before July 23, 2004, and reply comments
are due on or before August 25, 2004.
ADDRESSES: Federal Communications Commission, Portals II, 445 12th
Street, SW., Washington, DC 20554.
FOR FURTHER INFORMATION, CONTACT: Anne Levine, Media Bureau, (202) 418-
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Notice of Inquiry (NOI) in MB Docket No. 04-227, FCC 04-136, adopted
June 10, 2004, and released June 17, 2004. The full text of this NOI is
available for inspection and copying during normal business hours in
the FCC Reference Information Center, Portals II, 445 12th Street, SW.,
Room CY-A257, Washington, DC 20554, and may also be purchased from the
Commission's copy contractor, Best Company and Printing, Inc., Portals
II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone
(202) 488-5300 or (800) 378-3160, by e-mail fcc@bcpiweb.com, or via its
Web site http://www.bcpiweb.com. Persons with disabilities who need
assistance in the FCC Reference Information Center may contact Bill
Cline at (202) 418-2555 TTY, or bcline@fcc.gov. To request materials in
accessible formats for people with disabilities (electronic files,
large print, audio format and Braille), send an e-mail to
fcc504@fcc.gov, or call the Consumer & Governmental Affairs Bureau at
(202) 418-0531 (voice), 418-7365 (TTY).
Synopsis of Notice of Inquiry
1. Section 628(g) of the Communications Act of 1934, as amended,
directs the Commission to report annually to Congress on the status of
competition in the market for the delivery of video programming. This
Notice of Inquiry (NOI) solicits data and information on the status of
competition in the market for the delivery of video programming for our
eleventh annual report (2004 Report). We request information, comments,
and analyses that will allow us to compare video delivery technologies
and to evaluate the status of competition on the industry groups
involved and on consumers.
2. Comments submitted in this proceeding will be augmented with
information from publicly available sources. We emphasize the
importance of the information provided by industry participants with
the best knowledge of the questions and issues raised. If we continue
to find that we do not get the necessary data from industry
participants, we may pursue options for a mandatory data collection
process to ensure that we have appropriate information to fulfill our
statutory mandate to provide Congress with an annual assessment of the
status of competition in the video marketplace. The accuracy and the
usefulness of the 2004 Report are directly related to the information
we receive from commenters.
3. The Commission will report on the current state of competition
and report on changes in the competitive environment since our 2004
Report. To the extent feasible, we request data as of June 30, 2004, to
facilitate our analysis of competitive trends over time.
Competition in the Market for the Delivery of Video Programming
4. Video programming distributors include cable systems, direct
broadcast satellite (DBS) providers, home satellite dish (HSD)
providers, broadband service providers (BSPs), private cable or
satellite master antenna television (PCO) systems, open video systems
(OVS), multichannel multipoint distribution or wireless cable systems
(wireless cable), local exchange carrier (LEC) systems, utilities, and
over-the-air broadcast television stations. Video programming is also
distributed on videocassettes and DVDs through retail distribution
outlets and over the Internet.
5. We seek information and statistical data for each type of video
programming distributor including: The number of homes capable to
receiving service via each wired (e.g., an incumbent cable system, BSP,
OVS provider) or wireless technology (e.g., DBS, wireless cable, PCO);
the number of subscribers and penetration rates to different levels of
service for each service (e.g., basic cable service, cable programming
service tier or ``CPST,'' premium, pay-per-view, video-on-demand);
channel capacities and the number, type, and identity of video
programming channels offered, prices charged for various programming
packages; cost of programming inputs; industry and individual firm
financial information, such as total revenue and revenue by individual
company segments or services, cash flow, and expenditures; information
on how video programming distributors compare in terms of relative size
and financial
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resources; data that measure the audience reach of video programming
distribution firms as well as relative control over the video
distribution market; and information on the ability of, and the
competitive advantages to, video distributor expansion into new markets
such as local telephony, and high-speed Internet access, and the take
rates for these services.
6. We also request information that will allow us to evaluate
horizontal concentration in the video marketplace, vertical integration
between programming distributors and programming services, and other
issues relating to the programming available to consumers. We request
information on technical issues, including equipment and emerging
services such as video-on-demand and personal video recorders. We
further ask for comments regarding developments in foreign markets, as
they may contribute to our understanding of domestic markets.
7. We seek comment on competition among multichannel video
programming distributors (MVPDs). In particular, we are interested in
data and information on the number of homes capable of choosing among
MVPD services. We seek data and comment on the number of households
subscribing to more than one MVPD. We also request information on the
number of customers switching from one technology to another and the
factors responsible for switching among MVPDs as well as the percent of
those customers that drop MVPD service altogether. We further request
comment on any factors that are unique to competition in multiple
dwelling units (e.g., apartments).
8. In addition, we seek comments and information on the
consequences for consumers of competition in the market for video
programming. To what extent does competition continue to result in
lower prices, more programming, better quality of service, or more
advanced services, both video and non-video? We also request comment on
whether there are any statutes or regulations that should be modified
in light of changes in the video industry and competition over the past
decade.
9. We seek data on relative prices in order to evaluate
substitution between MVPD technologies (i.e., what are the prices of
similar cable, DBS, and BSP services). In addition, we are interested
in investigating methods for measuring and comparing prices for
products that vary in quality (e.g., how to compare the price of a 50-
channel package with the price of a 30-channel package).
10. We seek comment on barriers to entry and the impact of the
regulatory environment on competition, including the ability of MVPDs
to gain access to programming networks, rights-of-way, pole
attachments, conduits, and ducts for the delivery of their services to
consumers. Although we are primarily concerned with the effect of
regulation on competition, we also request comment on other barriers to
entry and competition.
11. We seek information on existing, planned, and terminated or
merged programming services to assess the changes in the amount and
type of video programming available that have occurred in the past
year, ownership of programming networks, genre of service and
transmission format (i.e., analog, standard digital (SD), or high
definition (HD) format), language (e.g., English or foreign language).
This year, we seek to identify the ownership of non-broadcast networks
by any media entity, not just cable operators as we have done in the
past. We further request information on the ability of programming
networks to sell their services, especially comments on the experiences
of start-up networks. We also seek information on how video programming
distributors package and market their programming. To what extent do
MVPDs offer service to consumers on an ``a la carte'' or ``mini-tier''
basis rather than the traditional tiering of programming services? We
request comment regarding public, educational, and governmental (PEG)
access and leased access channels, and the programming provided by DBS
operators in compliance with their public interest obligations. We
further request information regarding the accessibility of closed
captioning and video description to persons with disabilities.
12. We seek information and statistics on the advanced service
offerings (e.g., high-speed Internet access services, telephony,
interactive television, electronic programming guides) and new ways of
offering service (e.g., personal video recorders, video-on-demand,
streaming video) that are being deployed by video programming
distributors. We specifically seek comment on the development and
deployment of electronic programming guides (EPGs), video-on-demand
(VOD), and interactive television (ITV) services. We request
information on the impact that the availability of non-video services
offered by video programming providers has had and continues to have on
the nature of competition in the video marketplace.
13. We further seek information and comment regarding issues
specific to video programming distribution in rural and smaller
markets. How do MVPD choices for consumers differ in these markets
compared to larger, more urban markets? What percent of cable systems
in rural or smaller markets have capacity of less than 750 MHz? We
request information on the programming offered in rural and smaller
markets and any differences between these offerings and those available
in larger markets.
14. We seek comment on the availability and compatibility of
customer premises equipment used to provide video programming and other
services. How does customer premises equipment design, function, and/or
availability affect consumer choice and competition between firms in
the video programming market?
Cable Television Service
15. We seek to update and refine our Report on the performance of
the cable television industry and request comment on the current state
of competition in this segment of the market. Specifically, we request
information regarding the investments that cable operators have made to
upgrade their plant and equipment to increase channel capacity, create
digital services, or offer advanced services, and the various technical
methods being used to increase capacity. How is bandwidth allocated
among analog and digital video tiers and what factors influence that
decision? To what extent is new capacity used for non-video services?
Further, we request information on cable operator plans to convert
their systems to all-digital transmission.
16. We also seek comment on the level of large-scale consolidation
in the MVPD industry. We request comment on the practice of clustering,
whereby operators concentrate their operations in specific geographic
areas. We request data regarding the effect of clustering by cable
operators on competition in the video programming distribution market.
17. We seek comment on whether cable operators are changing the way
they package programming. Are cable operators restructuring their tiers
by shifting programming from one tier to another? We seek comment on
relevant trends in pricing of cable tiers.
18. Commenters are asked to provide information specific to the
advanced service offerings by cable operators and particularly video-
on-demand, traditional circuit-switched telephone service and Internet
Protocol (IP) telephony, and high-speed data access services.
19. We also seek updated information regarding the development of
specifications for interoperable set-top boxes (i.e., set-top boxes
that can be
[[Page 39932]]
moved from one cable franchise area to another and function with any
given cable provider's local system). We also solicit updated
information on PacketCable, a CableLabs project intended to develop
interoperable interface specifications for delivering advanced, real-
time multimedia services over two-way cable plant. Furthermore, we
request information on how many products are currently available with
plug-and-play functionality, or are soon to be available.
20. Section 612(g) of the Communications Act provides that at such
time as cable systems with 36 or more activated channels are available
to 70% of households within the United States and are subscribed to by
70% of those households, the Commission may promulgate any additional
rules necessary to promote diversity of information sources. We request
comment and supporting data that would be useful for an accurate
determination of whether the criteria have been met, and, if so,
whether the Commission should promulgate additional rules to promote
diversity of information sources.
21. We request comment on the ``tier buy-through'' option mandated
by section 623(b)(8) of the Communications Act? What portion of
subscribers is taking advantage of this option that permits consumers
to purchase programming on a per-channel or per-program basis without
subscriptions to any tier of service other than the basic tier?
22. Under sections 614 and 615 of the Communications Act, cable
operators must set aside up to one third of their channel capacity for
the carriage of commercial television stations and additional channels
for noncommercial stations depending on the system's channel capacity.
We seek information on the extent to which cable operators currently
are using all their required set-aside channels for the carriage of
local broadcast signals and the percentage of broadcast stations
carried on cable pursuant to retransmission consent agreements.
Direct-to-Home Satellite Services
23. For direct-to-home (DTH) satellite services (i.e., DBS and
large dish or HSD), we request data on the geographic locations of DBS
and HSD subscribers, by state and type of area (i.e., urban, suburban,
rural). How have the demographics changed since DBS began operation?
What percentage of new DBS subscribers are former cable subscribers or
former HSD households? We request information regarding the investments
that DBS operators have made or plan to make to upgrade their plant and
equipment to increase channel capacity or offer advanced services.
24. We request information on the number of markets where local-
into-local television service is, or will be offered in the near
future, pursuant to Satellite Home Viewer Improvement Act of 1999
(SHVIA), including the number and affiliation of the stations carried.
We also request data that will allow us to compare DBS and cable rates
for programming packages and equipment. Furthermore, we ask commenters
to provide information on the number of channels and the monthly prices
of various DBS programming packages and programming available for HSD
subscribers.
25. We seek information on the status of current and future plans
of both satellite-delivered high-speed Internet access with a telephone
return path as well as two-way satellite delivered high-speed Internet
access services offered by the overall satellite industry, including
fixed satellite systems (FSS), DTH and DBS providers. To what extent do
DBS operators co-market advances services, such as DSL or voice
services, with local exchange carriers (LECs)?
Broadband Service Providers, Open Video System Operators, and
Overbuilders
26. We request information regarding the provision of video, voice,
and data services by broadband service providers (BSPs), open video
system (OVS) operators, and overbuilders. Further, we seek comment on
the current and potential effect of BSPs, OVS, or overbuilders on the
status of video competition, and the characteristics that exemplify BSP
competitiveness (e.g., number of subscribers, homes passed,
geographical reach, business model). Are there market characteristics
that make certain areas more conducive to such competition than others?
What are the technical and economic factors that determine whether
overbuild systems are successful? Are there still significant barriers
to entry?
Broadcast Television Service
27. We seek data and comment on the role of broadcast television in
the market for the delivery of video programming, including information
on audience shares, advertising revenues, and compensation broadcasters
receive for retransmission consent. We seek to update our information
on the practice of repurposing and ``time shifted'' programming, and
ask commenters to provide examples of repurposing programming or ``time
shifted'' scheduling during the current television season.
28. We seek comment and data on a broad range of issues relating to
the digital television (DTV) transition to examine the ways in which
broadcast television stations' deployment of digital television service
and the DTV programming provided by MVPDs impact competition in the
video programming distribution market. We invite comment on programming
content available in DTV formats, spectrum usage, over-the-air
availability of DTV service and carriage of DTV programming by MVPDs,
the production of DTV programming by stations and MVPDs, the equipment
used to receive DTV programming, current and projected levels of
consumer access to and use of DTV and related equipment, and consumer
education efforts. We request information on the development of DTV,
including historical, current and projected data. We ask specifically
how many noncommercial educational broadcast stations are being
carried, and under what terms.
Wireless Cable Systems
29. We seek information regarding the previously identified trend
towards declining availability of and subscribership to MMDS-provided
video, also known as wireless cable. What factors have affected the
health and viability of the wireless cable industry? We seek
information about the availability of advanced services, including two-
way services, such as digital video, high-speed Internet access
services, and telephony.
Private Cable Operators
30. We request information on the types of services offered by
private cable operators, also known as satellite master antenna
television (``SMATV'') operators, and the price charged for those
services. What factors affect the health and viability of the private
cable industry? Are there competitive or legal hurdles that prevent
private cable operators from working with DBS operators in MDUs?
Local Exchange Carriers and Utilities
31. We seek information regarding LECs and utility companies that
provide video services. Specifically, we request information on
franchised cable systems operated by LECs and DSL-based video
offerings.
Home Video Sales and Rentals
32. We seek information regarding the home video sales and rental
market, such as data on the number or percentage of households with
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videocassette recorders, laser disc players, DVD players, and personal
video recorders (PVRs). We request information on the amount of
programming available in VCR, DVD, and laser disc formats for sale and
rental, the cost of rentals, and how this compares with the cost of
pay-per-view, video-on-demand, or near video-on-demand programming
offered by MVPDs.
Internet Video
33. We seek information on the types of video services currently
being offered over the Internet both in real-time and downloadable
format. We also seek projections of whether and, if so, when Internet
video will become a viable competitor in the market for the delivery of
video programming. What criteria should determine whether Internet
video is to be considered ``broadcast quality'' (e.g., frames-per-
second delivered, the size of the viewing area, the relative ease of
use by the consumer, consumer habit, the type of programming offered,
relative availability of programming)? How does currently available
real-time Internet video compare to traditional MVPD and broadcast
programming? We also solicit information on the technological, legal,
regulatory, and competitive factors that may promote or impede the
provision of video over the Internet.
Foreign Markets
34. Finally, we seek information regarding the status of
competition in foreign markets for the delivery of video programming
that would provide insights regarding the nature of competition in the
United States market. Specifically, we seek information on ongoing
efforts in foreign markets to provide DSL-based video, interactive
video services, ``a la carte'' channel options, high-speed Internet
access service, and the transition to DTV. We seek information
regarding any differences between the United States and other markets
with respect to video programming distribution and advanced services
provision that would be instructive as to the efficiency of market
structures and regulations within the United States. How do
regulations, or lack thereof, in foreign markets compare with
regulations in the United States and how might these differences yield
different competitive results?
Procedural Matters
Ex Parte
35. There are no ex parte or disclosure requirements applicable to
this proceeding pursuant to 47 CFR 1.1204(b)(1).
Filing of Comments and Reply Comments
36. Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's
rules, 47 CFR 1.415 and 1.419, interested parties may file comments on
or before July 23, 2004, and reply comments on or before August 25,
2004. Comments may be filed using the Commission's Electronic Comment
Filing System (ECFS) or by filing paper copies. See Electronic Filing
of Documents in Rulemaking Proceedings, 63 FR 24121, May 1, 1998.
37. Comments filed through the ECFS can be sent as an electronic
file via the Internet to http://www.fcc.gov/cgb/ecfs/. Generally, only
one copy of an electronic submission must be filed. If multiple docket
or rulemaking numbers appear in the caption of this proceeding,
however, commenters must transmit one electronic copy of the comments
to each docket or rulemaking number referenced in the caption. In
completing the transmittal screen, commenters should include their full
name, U.S. Postal Service mailing address, and the applicable docket or
rulemaking number. Parties may also submit an electronic comment by
Internet e-mail. To get filing instructions for e-mail comments,
commenters should send an e-mail to ecfs@fcc.gov, and should include
the following words in the body of the message, ``get form < your e-mail
address>.'' A sample form and directions will be sent in reply. Parties
who choose to file by paper must file an original and four copies of
each filing. If more than one docket or rulemaking number appears in
the caption of this proceeding, commenters must submit two additional
copies for each additional docket or rulemaking number.
38. Filings can be sent by hand or messenger delivery, by
commercial overnight courier, or by first-class or overnight U.S.
Postal Service mail (although we continue to experience delays in
receiving U.S. Postal Service mail).
39. The Commission's contractor, Natek, Inc., will receive hand-
delivered or messenger-delivered paper filings for the Commission's
Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC
20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand
deliveries must be held together with rubber bands or fasteners. Any
envelopes must be disposed of before entering the building. Commercial
overnight mail (other than U.S. Postal Service Express Mail and
Priority Mail) must be sent to 9300 East Hampton Drive, Capitol
Heights, MD 20743. U.S. Postal Service first-class mail, Express Mail,
and Priority Mail should be addressed to 445 12th Street, SW.,
Washington, DC 20554. All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
40. Parties also must serve either one copy of each filing via e-
mail or two paper copies to Best Copy and Printing, Inc., Portals II,
445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone
(800) 378-3160, or via its Web site at http://www.bcpiweb.com. In
addition, parties should serve one copy of each filing via email or one
paper copy to Anne Levine, Media Bureau, 445 12th Street, SW., 2-C410,
Washington, DC 20554. Parties should serve one copy of each filing via
email or five paper copies to Linda Senecal, 445 12th Street, SW., 2-
C438, Washington, DC 20554.
Authority
41. This NOI is issued pursuant to authority contained in sections
4(i), 4(j), 403, and 628(g) of the Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 403, and 548(g).
Federal Communications Commission.
William F Caton,
Deputy Secretary.
[FR Doc. 04-14997 Filed 6-30-04; 8:45 am]
BILLING CODE 6712-01-P