[Federal Register Volume 62, Number 136 (Wednesday, July 16, 1997)] [Notices] [Pages 38088-38090] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 97-18690] ----------------------------------------------------------------------- FEDERAL COMMUNICATIONS COMMISSION [CS Docket No. 97-141, FCC 97-194] Annual Assessment of the Status of Competition in Markets for the Delivery of Video Programming AGENCY: Federal Communications Commission. ACTION: Notice of inquiry. ----------------------------------------------------------------------- SUMMARY: The Commission is required to report annually to Congress on the status of competition in markets for the delivery of video programming pursuant to Section 628(g) of the Communications Act of 1934, as amended. On June 3, 1997, the Commission adopted a Notice of Inquiry to solicit information from the public for use in preparing the competition report that is to be submitted to Congress in December 1997. The Notice of Inquiry 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 by July 23, 1997, and reply comments are due by August 20, 1997. ADDRESSES: Federal Communications Commission, Washington, D.C. 20554. FOR FURTHER INFORMATION CONTACT: Marcia Glauberman, Cable Services Bureau, (202) 418-7200, or Rebecca Dorch, Office of General Counsel, (202) 418-1880. SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's Notice of Inquiry in CS Docket No. 97-141, FCC 97-194, adopted June 3, 1997, and released June 6, 1997. The complete text of this Notice of Inquiry is available for inspection and copying during normal business hours in the FCC Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C., 20554, and may also be purchased from the Commission's copy contractor, International Transcription Service (202) 857-3800, 1900 M Street, N.W., Washington, D.C. 20054. Synopsis of the Notice of Inquiry 1. Section 628(g) of the Communications Act of 1934, as amended (``Communications Act''), 47 U.S.C. Sec. 548(g), requires the Commission to deliver an annual report to Congress on the status of competition in markets for the delivery of video programming. The Notice of Inquiry (``NOI'' ) is designed to solicit comments and information that the Commission can use to prepare its fourth annual report (``1997 Competition Report''). Specifically, the NOI invites commenters to submit data, information and analysis regarding the cable industry, existing and potential competitors to cable systems, and prospects for increasing competition in markets for delivery of video programming. Commenters also are requested to identify and comment on existing statutory provisions they perceive as restraining competition or inhibiting development of robust competition in markets for the delivery of video programming. The Commission expects to use the information that is submitted by commenters to supplement publicly available information and relevant comments that have been filed in other Commission proceedings. 2. As in previous reports, we seek factual information and statistical data regarding the status of video programming distributors using different technologies, and changes that have occurred in the past year. We seek information on multichannel video programming distributors (``MPVDs'') using predominantly wired distribution technologies, including cable systems, private cable or satellite master antenna television (``SMATV'') systems, and open video systems (``OVS''). We also request data for those relying predominantly on wireless distribution technologies, such as over-the-air broadcast television, multichannel multipoint distribution service (``MMDS''), instructional television fixed service (``ITFS''), local multipoint distribution service (``LMDS''), direct broadcast satellite (``DBS'') service, and home satellite dish (``HSD'') service, and for other potential distribution mechanisms, including interactive video and data services (``IVDS''), the Internet, and public utility companies. 3. The NOI asks a variety of questions concerning each of these video delivery services. In addition to statistical data on each of these delivery services, we seek information regarding: (a) industry transactions, including information on mergers, acquisitions, consolidations, swaps and trades, and cross-ownership; (b) other structural developments that affect distributors' delivery of video programming; (c) regulatory and judicial developments that affect use of different technologies; and (d) the effects of the Telecommunications Act of 1996 (``1996 Act'') and its implementation. 4. The 1996 Competition Report described various technological advances that may affect industry structure and competition in markets for the delivery of video programming. For this year's report, we seek updated information on: (a) developments in the deployment, or planned deployment, of advanced technologies, such as digital compression, switched digital services, and upgraded architectures; (b) different transmission facilities used for distribution of multichannel video programming, such as copper wire, coaxial cable, optical fiber, broadcast and other terrestrial radio frequency communications, terrestrial microwave, satellites, and use of the Internet; (c) the hybridization of different transmission media; and (d) system configurations and designs that may facilitate competition, such as the distribution of different types of signals and different types of services over the same transmission facility. In addition, we request information about developments in set-top boxes, including updates on interoperability, portability and market-driven standards. We also seek information on whether multichannel video distributors are leasing or selling reception equipment to subscribers, and the competitive impact, if any, of these marketplace alternatives. We further invite comment on the use of digital forms of communications and on [[Page 38089]] potential problems and new issues relevant to multichannel video distribution competition in a digital environment. 5. In the 1997 Competition Report, we will provide updated information on the structure and rivalry of markets for the delivery of video programming. We seek information on changes in the number and market share of all MVPDs, and the effects of MVPD horizontal concentration at the local, regional and national levels. We seek comment on the definition of the relevant market as revised in the 1996 Competition Report, which posited alternative approaches to measuring concentration in the average local market, and identified product differentiation and entry conditions as factors affecting competition. In local markets where incumbent cable operators face competition from one or more other video programming distributors, we seek information on: (a) the identity of the competitors; (b) the distribution technology used by each competitor; (c) the date that each competitor entered the market; (d) the location of the market, including whether it is predominantly urban or rural; (e) an estimate of the subscribership and market share for the services of each competitor; (f) a description of the service offerings of each competitor; (g) differentiation strategies each competitor is pursuing; and (h) the prices charged for the service offerings. 6. Mergers, acquisitions, consolidations and corporate restructuring are important causes of change in industry structure and in the intensity of market competition. We seek information on such events over the past year, their effects on industry structure, and impact on markets for the delivery of video programming. In particular, we solicit maps that show the ownership patterns that have resulted from industry restructuring and the effects of these changes on competition in markets for the delivery of video programming. 7. In the 1997 Competition Report, we will update information on existing and planned programming services, with particular focus on those programming services that are affiliated with video programming distributors. Thus, we seek information and ask a variety of questions on programming services that are affiliated with cable operators, affiliated with other non-cable video programming distributors, and unaffiliated with any MVPD. 8. As in prior reports, we seek to update our assessment of the effectiveness of our program access, program carriage, and channel occupancy rules. In the 1996 Competition Report, we observed a concern that the program access rules may be too narrowly focused to address some current issues related to access to programming and noted that the 1996 Act expanded the program access rules to apply to OVS operators and common carriers in the same manner as they apply to cable operators. Therefore, we seek information on the effectiveness of the program access rules during the past year, including the effect of expansion of these rules to OVS operators and common carriers, and on any remaining issues of concern to video programming providers or MVPDs. We also solicit comment on our leased access rules and, in particular, our recent revision of the formula for calculating the maximum reasonable rate for the carriage of leased access programming. 9. Moreover, as we did in the 1996 Competition Report, we will examine the effect of competition in local markets through case studies of local markets where cable operators faced actual competition from MVPD entrants. We seek updated information on the effects of actual and potential competition in these local markets and in others where consumers have, or soon will have, a choice between MVPDs, including information on incumbent MVPDs responses, such as decreased rates or increased service offerings, to anticipated and actual entry by competing MVPDs. In addition, we request identification of particular strategic behavior and conduct by other MVPDs that affect competition in markets characterized by head-to-head competition between or among MVPDs. 10. We also noted in the 1996 Competition Report that laws, regulations, and strategic behavior by incumbents can create impediments to entry and competition in markets for the delivery of video programming, and endeavored to briefly assess our efforts to reduce some of those impediments. We request information regarding existing or potential regulatory impediments that may have the effect of deterring entry or preventing expansion of competitive opportunities in video program delivery markets. In addition, we ask commenters to identify specific statutory provisions that are perceived as advancing or inhibiting competition or that have differential application and may distort competition among MVPDs, or that restrain competitive opportunities within markets for the delivery of multichannel video programming. 11. A number of the provisions of the 1996 Act were intended to encourage competition in markets for the delivery of video programming. In the 1997 Competition Report, we would like to update our assessment of the effects of the various provisions of the 1996 Act on the status of competition. In particular, we seek comment on ten specific changes from the 1996 Act relating to competition in video markets: (a) the establishment of OVS; (b) preemption of restrictions on over-the-air reception devices; (c) the change in the definition of cable television; (d) a new ``effective competition'' definition; (e) changes in rate regulation provisions; (f) rate competition in multiple dwelling units; (g) competition in MVPD ``navigation'' equipment markets; (h) the entry of exempt public utility companies into video markets; (i) pole attachment regulation; and (j) the elimination of entrance barriers for entrepreneurs and small businesses. 12. Finally, as provided in our Report submitted to Congress on July 29, 1996, concerning Video Programming Accessibility, Implementation of Section 305 of the Telecommunications Act of 1996-- Video Programming Accessibility, 61 FR 4249 (August 14, 1996), we seek information on methods and schedules for providing greater accessibility to video programs for persons with visual disabilities. In the Video Programming Accessibility Report, which was required by Section 713(f) of the Communications Act, we concluded that the record before us was insufficient to assess the appropriate methods and schedules for phasing video description into the marketplace and indicated that we would collect additional information in the context of the 1997 Competition Report. Accordingly, in the Notice, we request data and information including: (a) the availability and cost of secondary audio programming (``SAP'') channels needed to deploy video description; (b) the cost and possible funding of video description; (c) the impact that implementation of digital technologies could have; (d) specific methods and schedules for ensuring that video programming includes descriptions; and (e) any other relevant technical, quality, legal and policy issues. We will use this additional record to better assess those issues that were not fully addressed in the Video Accessibility Report. Administrative Matters Ex Parte 13. There are no ex parte or disclosure requirements applicable to this proceeding pursuant to 47 CFR Sec. 1.1204(a)(4). [[Page 38090]] Comment Dates 14. Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commission's Rules, 47 CFR Secs. 1.415 and 1.419, interested parties may file comments on or before July 23, 1997, and reply comments on or before August 20, 1997. To file formally in this proceeding, participants must file an original and four copies of all comments, reply comments and supporting comments. If participants want each Commissioner to receive a personal copy of their comments, an original plus ten copies must be filed. Comments and reply comments should be sent to the Office of the Secretary, Federal Communications Commission, Washington, D.C. 20554. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center (Room 239) of the Federal Communications Commission, 1919 M Street, N.W., Washington, D.C. 20554. Ordering Clauses 15. This Notice of Inquiry is issued pursuant to authority contained in Sections 4(i), 4(j), 403 and 628(g) of the Communications Act of 1934, as amended. List of Subjects in 47 CFR Part 76 Cable television. Federal Communications Commission. William F. Caton, Acting Secretary. [FR Doc. 97-18690 Filed 7-15-97; 8:45 am] BILLING CODE 6712-01-P