[Federal Register Volume 60, Number 107 (Monday, June 5, 1995)]
[Proposed Rules]
[Pages 29533-29535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13643]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[CS Docket No. 95-61, FCC 95-186]
Annual Assessment of the Status of Competition in the Market 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 the market for the delivery of video
programming pursuant to Section 628(g) of the Communications Act of
1934, as amended. On May 4, 1995, the Commission adopted a Notice of
Inquiry to solicit information from the public for use in preparation
of the annual assessment of the status of competition in the market for
the delivery of video programming that is to be submitted to Congress
by November 15, 1995. 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 June 30, 1995, and reply comments are due by
July 28, 1995.
addresses: Federal Communications Commission, Washington, DC 20554.
for further information contact: Marcia Glauberman, Cable Services
Bureau (202) 416-1184 or Martin L. Stern, Office of the General Counsel
(202) 416-0865.
supplementary information: This is a synopsis of the Commission's
Notice of Inquiry in CS Docket No. 95-61, FCC 95-186, adopted May 4,
1995, and released May 24, 1995. 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 NW.,
Washington, DC 20554, and may also be purchased from the Commission's
copy contractor, International Transcription Service (``ITS, Inc.''),
(202) 857-3800, 2100 M Street NW., Suite 140, Washington, DC 20037.
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 concerning the
status of competition in the market for the delivery of video
programming. The Commission submitted its first to Congress in
September 1994. First Report, CS Docket No. 94-48, summarized in FR
64657 (December 15, 1994). The Commission expects to submit the 1995
Competition Report to Congress by November 15, 1995.
2. When Congress adopted the Cable Television Consumer Protection
and Competition Act of 1992 (``1992 Cable Act'') and added Section
628(g) to the Communications Act, it indicated a preference for
competition over regulation of cable television systems. Congress
found, however, that sufficient competition to local cable television
systems did not exist and, as a result, cable operators had undue
market power compared to that of consumers and video programmers.
Accordingly, Congress enacted the 1992 Cable Act to promote competition
and to ensure that consumer interests are protected in the absence of
effective competition to cable television. A critical element of this
regulatory framework is to promote the emergence of competition over
time by fostering the entry of alternative multichannel video
programming distributors (``MVPDs''). The annual competition report to
Congress provides an opportunity for the Commission to summarize the
status of cable television and other video distributors, monitor
changes in the competitive environment and evaluate the progress that
is being made in promoting and developing a competitive marketplace for
the delivery of video programming services.
3. The Notice of Inquiry (``Notice'') is designed to solicit
comments and information that the Commission can use to prepare its
1995 Competition Report. Specifically, the Notice requests information
concerning the cable industry, existing and potential competitors to
cable systems, barriers to entry by new competitors, technological
advances and the prospects for increased competition in the market 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. The Notice highlights a wide range of
competitive issues, and offers parties an opportunity to submit
information on these issues, as well as any other information they
believe is relevant to an evaluation of competition in market for the
delivery of video programming.
4. The Notice begins with an overview of the 1994 Competition
Report,including a summary of the framework for analyzing competition
in the market for delivered video programming and the findings
regarding the status of competition as of September 1994. The 1994
Competition Report's analytical framework can be summarized as follows:
(1) Definition of the market; (2) analysis of the status of current and
potential future participants in the market; (3) examination of the
conduct of the firms in the market; (4) analysis of market structure
conditions that may affect competition, with particular emphasis on
impediments to competition and regulatory efforts to promote
competition; and (5) evaluation of the overall economic performance of
the market. In addition, on the basis of its analysis of the status of
existing and potential competitors to local cable
[[Page 29534]] systems, the Commission stated that while competitors
were emerging, alternative video programming distributors were not
available to a sufficient number of subscribers to create a competitive
environment in most markets.
5. The Notice then seeks information and comment on specific issues
in preparation for the 1995 Competition Report. The Commission first
addresses the relevant product and geographic markets for delivered
video programming. In the 1994 Competition Report, the Commission used
the 1992 Cable Act's definition of ``multichannel video programming
service'' as a starting point for the relevant product. This definition
includes cable television, multipoint multichannel distribution service
(``MMDS'' or ``wireless cable''), direct broadcast satellites (``DBS'')
and receive-only satellite dishes. The Commission also analyzed the
status of other MVPDs that were not included in the statutory
definition, such as satellite master antenna television (``SMATV'')
systems and video dialtone (``VDT'') service, and other video
programming distribution media as potential substitutes for cable
services. With respect to the geographic market, the Commission
determined that it seemed reasonable to define it, at least
tentatively, as the local franchising area, although over time this
definition may be broadened. The Commission seeks comment on whether
these definitions remain relevant or whether a reassessment of the
appropriate definitions of product and geographic markets is required.
6. The Notice then requests data and information about the cable
television industry, entities using other distribution technologies
that are already in the market, entities that are potential entrants in
this market and other technologies that might impact the nature of
competition in the market for delivery of video programming services.
Commenters are invited to provide information regarding the cable
industry, including cable overbuilds, wireless cable systems, SMATV
systems, direct-to-home satellite services, such as DBS and home
satellite dishes (``HSDs''), and VDT services. The Notice asks a
variety of questions concerning each of these video service providers
and solicits information regarding barriers to entry and the nature of
the services they provide. The Notice also indicates that the
Commission intends to examine the effects on competition of broadcast
television service, video cassette recorders (``VCRs'') and interactive
video and data services (``IVDS''). In the Notice, the Commission
states that it expects to explore possible entry of other types of
firms into the market for the delivery of video programming, such as
electric utilities, and requests comment on the likelihood of such
entry and its effect on competition.
7. The Commission observes that there are technological changes and
developments that may also affect the structure of the market for the
delivery of video programming. In this regard, the Notice solicits
information on digital compression, the hybridization of different
transmission media used for the distribution of multichannel video
programming and technologies that will facilitate consumer access to
various distribution media and services.
8. In the Notice, the Commission requests comment on the structure
of the market for the delivery of video programming and the effect of
this structure on competition. The Commission expects to explore the
status of horizontal concentration and vertical integration in the
cable television industry and analyze the market structure conditions
that may affect competition in markets for the delivery of video
programming. Information is requested to help the Commission identify
local markets where cable operators, currently, or may in the near
future, face competition from other MVPDs. At the national level, the
1994 Competition Report provided an analysis of multiple system
operator, or MSO, ownership of cable systems. The Notice seeks data
regarding the number of subscribers served by individual MSOs, which
will allow the Commission to continue to monitor industry concentration
and to assess its effects on the video marketplace. The Commission also
notes that there has been a trend towards ``clustering,'' or regional
concentration, of cable system ownership. the Notice invites comment on
the competitive effects of clustering.
9. Several provisions of the 1992 Cable Act were intended to ensure
that vertically integrated cable companies do not impede competition.
In the Notice, the Commission solicits data to update the information
presented in the 1994 Competition Report relating to vertically
integrated and unaffiliated programming services. Thus, the Commission
seeks information that will allow it to examine affiliation between
national programming services and cable operators, determine whether
alternative providers are able to acquire programming services on
nondiscriminatory terms and assess the degree to which unaffiliated
programmer are gaining access to cable systems. In particular, the
Commission ``request[s] comment on whether the program access rules and
our decisions in response to program access complaints have served
their intended purpose alleviate [the] problem [that non-cable MVPDs
faced in acquiring programming services on nondiscriminatory terms].''
10. The Notice further requests that commenters consider several
economic market performance indicators that were used in the 1994
Competition Report to assess the current level of competition. Parties
are asked to provide appropriate updates wit respect to these
indicators and to comment on the conclusion drawn in the 1994
Competition Report regarding these indicators and the appropriate
methods for assessing market performance. The Commission also seeks
comment on market structure characteristics that may increase
competition or pose impediments to competition. Furthermore, comment is
requested concerning economies of scale and scope in the cable
industry, regulatory or technological barriers to entry into the market
for the delivery of video programming and the implications of sunk cost
investments for competitive entry.
11. Finally, the Notice seeks recommendations Commission actions,
if any, to promote further competition in the market for delivered
video programming. In this regard, parties are asked to explain how
their proposals would increase competition in the delivery of video
programming to consumers or enhance the programming distribution
market.
Administrative Matters
Ex Parte
12. There are no ex parte or disclosure requirements applicable to
this proceeding pursuant to 47 CFR 1.1204(a)(4).
Comment Dates
13. Pursuant to applicable procedures set forth in Sections 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 June 30, 1995, and reply
comments on or before July 28, 1995. 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, DC 20554. Comments and [[Page 29535]] 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, NW., Washington, DC 20554.
Ordering Clauses
14. 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.
LaVera F. Marshall,
Acting Secretary.
[FR Doc. 95-13643 Filed 6-2-95; 8:45 am]
BILLING CODE 6712-01-M
