[Federal Register Volume 64, Number 127 (Friday, July 2, 1999)]
[Notices]
[Pages 36013-36016]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16832]


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FEDERAL COMMUNICATIONS COMMISSION

[CS Docket No. 99-230, FCC 99-148]


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. On June 18, 1999, 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 
1999. 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 August 6, 1999, and reply comments are due 
by September 1, 1999.

ADDRESSES: Office of the Secretary, Federal Communications Commission, 
445 12th Street, SW, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Marcia Glauberman, Cable Services 
Bureau, (202) 418-7200 or TTY (202) 418-7172.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Notice of Inquiry in CS Docket No. 99-230, FCC 99-148, adopted June 18, 
1999, and released June 23, 1999. The complete

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text of this Notice of Inquiry is available for inspection and copying 
during normal business hours in the FCC Reference Center, 445 12th 
Street, S.W., Washington, D.C., 20554, and may also be purchased from 
the Commission's copy contractor, International Transcription Service 
(``ITS, Inc.''), (202) 857-3800, 1231 20th Street, N.W., Washington, 
D.C. 20036.

Synopsis of the Notice of Inquiry

    1. Section 628(g) of the Communications Act of 1934, as amended 
(``Communications Act''), 47 U.S.C. 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 assist the Commission in gathering the 
information, data, and public comment necessary to prepare its sixth 
annual report on competition in markets for the delivery of video 
programming (``1999 Competition Report''). The Commission expects to 
use the information submitted by commenters to supplement publicly 
available information and relevant comments that have been filed in 
other Commission proceedings.
    2. For the 1999 Competition Report, we request information and 
comment regarding the cable industry, existing and potential 
competitors in markets for the delivery of video programming, and the 
prospects for increasing competition in these markets. We seek 
information to update our assessment of the status of competition and 
on changes in the competitive environment since our 1998 Competition 
Report was submitted to Congress. For this year's report, to the extent 
feasible, we ask parties to submit data and information that are 
current as of June 30, 1999. We also note that the information gathered 
in this report will present the first comprehensive picture of the 
state of competition in the video marketplace following the 
deregulation of rates for cable programming service tiers (``CPSTs'') 
on March 31, 1999.
    3. Markets for the delivery of video programming are served by 
video distributors using both wired and wireless technologies. Video 
distributors include multichannel video programming distributors 
(``MVPDs''), such as cable systems, direct broadcast satellite 
(``DBS'') service, and home satellite dish (``HSD'') service, private 
cable or satellite master antenna television (``SMATV'') systems, open 
video systems (``OVS''), multichannel multipoint distribution service 
(``MMDS''), and instructional television fixed service (``ITFS''), as 
well as over-the-air broadcast television service.
    4. Congress and the Commission have sought to eliminate barriers to 
competitive entry and establish market conditions that promote 
competition to foster more and better options for consumers at 
reasonable prices. For the 1999 Competition Report, we seek information 
and comment that will allow us to evaluate the status of competition in 
the video marketplace, its effect on the cable television industry, and 
prospects for increased competition. We are interested in evaluating 
the extent that consumers have choices among video programming 
distributors and delivery technologies and in comparing the various 
video distribution alternatives available to consumers in terms of 
video programming offerings, prices for programming services and 
associated equipment, and other services provided (e.g., telephony, 
data access). We invite comment on the effect of recent statutory and 
regulatory changes on competition for the delivery of video services. 
We request information regarding existing or potential regulatory 
impediments that may deter entry or prevent expansion of competitive 
opportunities in video program delivery markets, including specific 
Commission rules, policies, or regulations that ought to be reexamined.
    5. In recent Competition Reports, we presented case studies of 
local markets where cable operators faced actual competition from MVPD 
entrants. This year, we request information on the effects of actual 
and potential competition in these and other local markets where 
consumers have, or soon will have, a choice among MVPDs. In particular, 
we seek updated information on MVPD services in those areas included in 
our previous case studies to determine whether the initial effects of 
competition continue. We also ask commenters to provide specific data 
regarding other areas where head-to-head competition exists, or is 
expected to exist in the near future, between cable and other MVPDs, or 
among various types of MVPDs. We further request information about how 
competition has affected prices, service offerings, quality of service, 
and other relevant factors.
    6. In addition to analyzing case studies, in the 1999 Competition 
Report, we want to present a broader picture of the current state of 
competition on a local, regional, and national basis. We ask commenters 
to assist us in this assessment of competitive alternatives available 
to consumers by providing detailed information on the types of 
competitive alternatives available, comparisons of the video and 
nonvideo services offered, and the prices charged for these service and 
associated equipment. We seek data on the number of television 
households that can choose between two, three, four, or more video 
programming distribution services and other information including: (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.
    7. In the 1997 and 1998 Competition Reports, we considered multiple 
dwelling units (``MDUs'') a separate submarket. For the 1999 
Competition Report, we would like to update our information on video 
delivery competition for and within MDUs. We request information 
regarding the choices that consumers have among MVPD services within a 
particular MDU, comparisons of the program offerings and prices charged 
by competing MVPDs serving an MDU, and comparisons of the program 
offerings and prices charged by MVPDs serving MDUs and competing MVPDs 
serving the same geographic area.
    8. 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. In addition to statistical data on each of these delivery 
services, we seek information regarding: (a) The number of homes passed 
(for wired technologies) and the number of homes capable of receiving 
service (for wireless technologies); (b) the number of operators; (c) 
the identities of the ten largest operators (national market only); (d) 
the number of subscribers and penetration rates; (e) channel capacities 
and the number and types of channels offered; and (f) the number and 
types of services offered. In addition, we request financial 
information for each technology, including firm and industry revenues, 
in the aggregate and by sources (e.g., subscriber revenues, advertising 
revenues, programming revenues); cash flow; changes in stock prices; 
investments; capital acquisition; and capital expenditures.
    9. For each video programming distribution technology, we also 
request information describing: (a) Technological advances (e.g.,

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deployment of digital services) that make or may make the technology 
competitive; (b) the effort (including steps, costs and time) needed to 
increase the number of homes passed or capable of receiving service; 
(c) the effort (including steps, costs and time) needed to increase the 
number of channels and types of services offered; and (d) regulatory 
and judicial developments that affect the use of different 
technologies. In addition, in evaluating the extent of competition 
among various MVPDs' services or technologies, we seek information and 
analysis on the degree to which viewers or consumers consider the 
different types of MVPDs to be substitutes and on the extent to which 
customers have switched from one provider or technology to another one.
    10. As in prior reports, we will provide updated information in the 
1999 Competition Report on the structure of, and rivalry in, markets 
for the delivery of video programming. We intend to evaluate MVPD 
market concentration as we have done previously and, thus, seek data 
regarding current national subscribership levels of all MVPDs, whether 
these levels have changed since the 1998 Competition Report, and, if 
so, how significantly. To the extent national concentration has 
increased or decreased for specific MVPDs, we ask commenters to discuss 
the reasons for such changes, including whether such changes are the 
results of merger and acquisition activity, marketing strategies, or 
other factors. We request data that will allow us to report on cable 
industry transactions, including information on mergers, acquisitions, 
consolidations, swaps and trades, cross-ownership, and other structural 
developments that affect distributors' delivery of video programming. 
We further request information regarding transactions involving 
noncable MVPDs that might affect competition in the video marketplace.
    11. With respect to regional concentration (i.e., ``clustering''), 
for cable and other MVPDs, we seek information on the geographic areas 
served by particular companies and comment regarding the effects 
industry consolidation and clustering have had on competition. We also 
ask commenters to discuss whether clustering has facilitated MVPDs' 
ability to provide increased or improved services, such as additional 
video and nonvideo services, lower prices, or better customer service.
    12. In the 1999 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. We seek information and ask a variety of questions on 
programming services that are affiliated with cable operators, 
affiliated with non-cable video programming distributors and 
unaffiliated with any MVPD.
    13. We also request information on the various program options 
offered by each MVPD technology, including exclusive program offerings, 
the number of channels available, and the comparability of the program 
options and packages available with each technology. We request data on 
the extent to which there are programming networks affiliated with 
noncable MVPDs and whether such programming networks are available to 
competing MVPDs. We ask whether there are certain programming services 
or specific classes of service that an MVPD needs to provide to 
subscribers in order to be successful. Further, we solicit information 
regarding increases in programming cost over the last year.
    14. We are interested in how MVPDs package their programming, 
particularly the extent to which they offer discrete programming 
choices (i.e., service on an ``a la carte'' or individual channel 
basis) rather than programming service packages (i.e., tiers of 
programming services). We ask whether MVPDs offer ``mini-tiers,'' 
``lifeline'' basic tiers, or digital tiers and what are the technical, 
economic, legal, or other considerations related to offering customized 
programming packages. In addition, we ask whether MVPDs are offering 
video and nonvideo services together (i.e., bundled services) and how 
such combined services are offered and priced. We further solicit a 
variety of information regarding: (a) Local and regional channels; (b) 
public, educational, and governmental (``PEG'') access channels; (c) 
leased access channels; (d) DBS channels used for ``noncommercial 
programming of an educational or informational nature;'' and (e) 
electronic programming guides (``EPGs'') offered by cable operators and 
other MVPDs.
    15. As in previous reports, we will continue to report on the 
effectiveness of our program access, program carriage, and channel 
occupancy rules that govern the relationships between cable operators 
and programming providers. We request comment on each of these rules, 
especially whether the coverage of the program access rules is 
appropriate and on any other issues of concern to video programming 
providers or MVPDs relating to the availability and distribution of 
programming.
    16. In the 1998 Competition Report, we addressed the deployment of 
digital technology and discussed recent activities to promote the 
commercial availability of the equipment used to access video 
programming and other services pursuant to the requirements of the 
Telecommunications Act of 1996. For this year's report, we seek updated 
information on system upgrades, particularly with respect to digital 
technology. We request information regarding multiple system operators 
(``MSOs'') that have created digital tiers and the types of programming 
offered on these tiers. We seek similar information on upgrades and the 
deployment of advanced technologies to provide digital programming and 
other advanced services by MVPDs other than cable operators. We also 
request information on the feasibility and use of combined distribution 
technologies (e.g., DBS and SMATV). Moreover, we are interested in what 
role, if any, the ability to provide advanced services plays in 
attracting subscribers to video programming services and contributing 
to the competitiveness of an MVPD.
    17. Another important aspect of technological development is the 
deployment of set-top boxes, integrated receiver/decoders, or receivers 
that facilitate or differentiate MVPD service offering. In this year's 
report, we plan to update the information provided in the 1998 
Competition Report regarding the certification of set-top boxes, 
including updated information on the progress of Cable Television 
Laboratories, Inc.'s OpenCable'' process, and the availability of set-
top boxes through retail outlets.
    18. In last year's report, we also observed that the cable industry 
had begun the widespread deployment of cable modems and that CableLabs 
was in the process of finalizing its Data Over Cable Service Interface 
Specification (``DOCSIS'') intended to provide manufacturers with a set 
of standards that will enable the production of interoperable cable 
modems. We seek information regarding the availability DOCSIS compliant 
modems and the extent to which consumers are buying rather than leasing 
modems.

Administrative Matters

Ex Parte
    19. There are no ex parte or disclosure requirements applicable to 
this proceeding pursuant to 47 CFR 1.1204(b)(1).
Comment Dates
    20. Pursuant to applicable procedures set forth in 47 CFR 1.415 and 
1.419,

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interested parties may file comments on or before August 6, 1999, and 
reply comments on or before September 1, 1999. 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 24,121 (1998).
    21. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to <http://www.fcc.gov/e-file/ecfs.html>. 
Generally, only one copy of an electronic submission must be files. 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, 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 [email protected], and 
should include the following words in the body of the message, ``get 
form [email protected].
    23. Parties who choose to file by paper should also submit their 
comments on diskette. These diskettes should be submitted to Marcia 
Glauberman, 445 12th Street, SW, Room 3-A738, Washington, DC 20554. 
Such a submission should be on 3.5 inch diskette formatted in an IBM 
compatible format using WordPerfect 5.1 for Windows or compatible 
software. The diskette should be accompanied by a cover letter and 
should be submitted in ``read only'' mode. The diskette should be 
clearly labelled with the commenter's name, proceeding (including the 
lead docket number in this case [CS Docket No. 99-230]), type of 
pleading (comment or reply comment), date of submission and the name of 
the electronic file on the diskette. The label should also include the 
following phrase ``Disk Copy--Not an Original.'' Each diskette should 
contain only one party's pleadings, preferable in a single electronic 
file. In addition commenters must send diskette copies to the 
Commission's copy contractor, International Transcription Service, 
Inc., 1231 20th Street, NW, Washington, DC 20036.
Ordering Clause
    24. This Notice is issued pursuant to authority contained in 
Sections 4(i), 4(j), 403, and 628(g) of the Communications Act of 1934, 
as amended.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 99-16832 Filed 7-1-99; 8:45 am]
BILLING CODE 6712-01-P