[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]


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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.

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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 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