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Federal Communications Commission FCC 05-155 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Annual Assessment of the Status of ) Competition in the Market for the ) MB Docket No. 05-255 Delivery of Video Programming ) NOTICE OF INQUIRY Adopted: August 9, 2005 Released: August 12, 2005 Comment Date: September 19, 2005 Reply Comment Date: October 3, 2005 By the Commission: Commissioners Copps and Adelstein issuing separate statements. TABLE OF CONTENTS Paragraph No. I. INTRODUCTION.................................................................................................................. 1 II. MATTERS ON WHICH COMMENT IS REQUESTED ................................................ 4 A. Competition in the Market for the Delivery of Video Programming........................ 4 B. Cable Television Service.......................................................................................... 26 C. Direct-to-Home Satellite Services............................................................................ 43 D. Wireline Services...................................................................................................... 53 1. Local Exchange Carriers............................................................................. 53 2. Broadband Service Providers and Open Video System Operators............ 59 3. Electric and Gas Utilities ............................................................................ 60 E. Internet Video ........................................................................................................... 61 F. Broadcast Television Service ................................................................................... 64 G. Wireless Cable Systems............................................................................................ 77 H. Private Cable Operators............................................................................................ 78 I. Home Video Sales and Rentals ................................................................................ 80 J. Home Networking .................................................................................................... 81 K. Advanced Compression Techniques........................................................................ 83 L. Commercial Mobile Radio Service Providers ......................................................... 84 M. Foreign Markets........................................................................................................ 85 III. PROCEDURAL MATTERS .............................................................................................. 86 Federal Communications Commission FCC 05-155 I. INTRODUCTION 1. Section 628(g) of the Communications Act of 1934, as amended, directs the Commission to report to Congress annually on the status of competition in the market for the delivery of video programming.1 This Notice of Inquiry (Notice) solicits data and information on the status of competition in the market for the delivery of video programming for our twelfth annual report (2005 Report).2 We request information, comments, and analyses that will allow us to evaluate the status of competition in the video marketplace, changes in the market since the 2004 Report, prospects for new entrants to that market, factors that have facilitated or impeded competition, and the effect these factors are having on consumers’ access to video programming.3 2. We ask commenters to provide data on video programming distributors, including cable systems, direct broadcast satellite (DBS) services, large home satellite or C-Band dish (C-Band) 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, utility-operated systems, and over-the-air broadcast television stations. We seek information on video programming distributed on videocassettes and DVDs through retail distribution outlets, over the Internet and via Internet Protocol (IP) networks. We also seek information that will allow us to evaluate horizontal concentration in the video marketplace, vertical integration between programming distributors and programming services, and other issues relating to the programming available to consumers. We request information on technical issues, including equipment and emerging services. We continue to seek comments regarding developments in foreign markets, as they may contribute to our understanding of domestic markets and provide insight into factors affecting video competition. Where possible and relevant, we request data as of June 30, 2005. 3. The accuracy and usefulness of the Report and its findings is directly related to the quality of the data and information we receive from commenters that respond to this Notice. We encourage thorough and substantive submissions from industry participants and state and local regulators with the best knowledge of the questions and issues raised. We will augment reported information with submissions in other Commission proceedings. In the past, we have had to rely on data from publicly available sources when information has not been provided directly by industry participants. The Commission intends to seek out publicly available information relevant to this inquiry. We are concerned, nevertheless, that such publicly available data may not be adequate to gain a full understanding of the state of competition in the video marketplace, especially when various sources provide inconsistent data. Thus, it is extremely important for us to receive complete and accurate information directly from industry sources. 1 Communications Act of 1934, as amended (Communications Act), § 628(g), 47 U.S.C. § 548(g). 2 This Notice is not intended to express any Commission views, or to prejudice the outcome of any Commission proceeding, but only to elicit information and data for purpose of this Report to Congress. 3 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), 20 FCC Rcd 2755 (2005) (2004 Report). See also Reports, 1994-2002: 9 FCC Rcd 7442 (1994) (1994 Report); 11 FCC Rcd 2060 (1996) (1995 Report); 12 FCC Rcd 4358 (1997) (1996 Report); 13 FCC Rcd 1034 (1998) (1997 Report); 13 FCC Rcd 24284 (1998) (1998 Report); 15 FCC Rcd 978 (2000) (1999 Report); 16 FCC Rcd 6005 (2001) (2000 Report); 17 FCC Rcd 1244 (2002) (2001 Report); 17 FCC Rcd 26901 (2002) (2002 Report); 19 FCC Rcd 1606 (2004) (2003 Report). 2 Federal Communications Commission FCC 05-155 II. MATTERS ON WHICH COMMENT IS REQUESTED A. Competition in the Market for the Delivery of Video Programming 4. We seek a broad range of information and statistical data pertaining to video distribution technologies and the programming available to consumers. To elicit useful information for our assessment of the video marketplace, we raise a significant number of questions in this section. We ask commenters to address as many of these questions as possible. We reiterate the importance of receiving this information directly from industry participants for an accurate and complete report. 5. General Statistical Data: We seek information and statistical data for each type of multichannel video programming distributor (MVPD), including: • the number of homes passed by each wired technology; • the number of homes capable of receiving service via each wireless technology;4 • the number of subscribers and penetration rates for each service (e.g., basic cable service, cable programming service tier or "CPST," premium, or their equivalents provided by non- cable MVPDs, pay-per-view, video-on-demand (VOD)); • channel capacities and the number, type, and identity of video programming channels offered, the channel capacity required for such offerings, and the available channel capacity of the system; • 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 resources; • data that measure the audience reach of video programming distribution firms as well as relative control over the video distribution market; • information on video distributor expansion into new markets such as local telephony and high-speed-Internet access, the percentage of subscribers taking these services, and the competitive advantages of offering these services; and • information on new technologies being considered, tested, or deployed by MVPDs for video, voice and data. 6. Head-to-Head Competition: Most consumers can receive video programming from broadcast television stations over the air, one cable provider, at least two DBS providers, and, in limited cases, a wireline overbuilder or other delivery technology. We are interested in data and information on the number of homes capable of choosing among multichannel video program distribution (MVPD) 4 This includes the number of line-of-sight homes for distribution technologies that require line of sight for reception. 3 Federal Communications Commission FCC 05-155 services. How many households can receive service from one or more providers (e.g., DBS, wireless cable, PCO) as well as an incumbent cable provider?
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