[Federal Register: July 12, 2002 (Volume 67, Number 134)]
[Notices]               
[Page 46187-46190]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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FEDERAL COMMUNICATIONS COMMISSION

[MB Docket No. 02-145; FCC 02-178]

 
Annual Assessment of the Status of Competition in the Market for 
the Delivery of Video Programming

AGENCY: Federal Communications Commission.

ACTION: Notice.

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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. This document solicits information from the public for use 
in preparing the competition report that is to be submitted to Congress 
in December 2002. The document 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 on or before July 29, 2002, and reply comments 
are due on or before August 30, 2002.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION, CONTACT: Anne Levine, Media Bureau at (202) 
418-7027 or via internet at alevine@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Notice of Inquiry, MB Docket 02-145, adopted June 13, 2002 and released 
June 14, 2002. The full text of this Notice is available for inspection 
and copying during normal business hours in the FCC Reference 
Information Center, Portals II, 445 12th Street, SW., Room CY-A257, 
Washington, DC 20554, and may be purchased from the Commission's copy 
contractor, Qualex International, Portals II, 445 12th Street, SW., 
Room CY-B402, Washington, DC 20554, telephone (202) 863-2893, facsimile 
(202) 863-2898, or via e-mail qualexint@aol.com or may be viewed via 
internet at http://www.fcc.gov/mb/.

Synopsis of the Notice of Inquiry

    1. Section 628(g) of the Communications Act of 1934, as amended, 
directs the Commission to annually report to Congress on the status of 
competition in the market for the delivery of video programming. 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 ninth annual report (``2002 Report''). We seek to 
compare video distribution alternatives available to consumers, and to 
evaluate the extent to which consumers have choices among video 
programming distributors and delivery technologies and to properly 
define the economic market or markets where competition takes place. We 
expect to base our evaluation on differences in video programming 
offerings, prices for programming services and associated equipment, 
and other services offered (e.g., telephony, high-speed Internet access 
services). We seek information that will allow us to evaluate the 
status of competition in the video marketplace, prospects for new 
entrants to that market, and the effect on the cable television 
industry and on consumers. The Commission will report on the current 
state of competition and report on changes in the competitive 
environment since our 2001 Report was submitted to Congress.
    2. The accuracy and the usefulness of the 2002 Report are directly 
related to the information we receive from commenters. To the extent 
feasible, we request data as of June 30, 2002, to facilitate our 
analysis of competitive trends over time. Comments submitted in this 
proceeding will be augmented with information from publicly available 
sources and other Commission proceedings.

Competition in the Market for the Delivery of Video Programming

    3. Video distributors using both wired and wireless technologies 
serve the market for the delivery of video programming. Video 
programming distributors include cable systems, direct broadcast 
satellite (``DBS'') providers, home satellite dish (``HSD'') providers, 
private cable or satellite master antenna television (``SMATV'') 
systems, open video systems (``OVS''), multichannel multipoint 
distribution services (``MMDS''), broadband service providers 
(``BSPs''), and over-the-air broadcast television stations.
    4. We ask commenters to provide information on the most significant 
changes or developments in the past year. Specifically, we seek 
information regarding each of the video programming distributors, 
including the number of homes passed, the number of subscribers, the 
services offered, the cost for various service options, financial 
information on each industry, ownership information, and data on 
investments in plant and facility upgrades.
    5. We seek information on industry and market structure and the 
effect of existing Commission regulations and other provisions of the 
law on competition in the video marketplace. To what extent do 
consumers have access to more than one video programming distributor? 
To what extent have customers switched from one provider or technology 
to another, and what factors are responsible for the switch? Where does 
head-to-head competition exist between cable and other video 
programming distributors, or among various types of video programming 
distributors? How has such competition affected prices, service 
offerings, and quality of service? We seek information on existing and 
planned overbuilding activity.
    6. We request comment on any factors that are unique to competition 
in the multiple dwelling units (``MDUs'') submarket. We request 
information for new case studies and updates on previous case studies 
on the effects of actual and potential competition in local markets 
where consumers have a choice among video programming distributors. We 
also seek information on what barriers to entry exist in the market?
    7. We ask commenters to provide data on national and local 
programming services, and their ownership. We seek information on the 
extent to which programmers are affiliated with video programming 
distributors and to what extent programming distributors, both 
broadcast and non-broadcast programming services, are involved in the 
production of the programming they provide, vertically integrated or 
not. Further, we request data on programming services including the 
scope of service, launch date, identification of ownership, and number 
of subscribers. To what extent are video programming distributors able 
to acquire or license unaffiliated programming? Are there certain 
programming services or types of services without which competitive 
video service providers may find themselves unable to compete 
effectively. We also seek information on how video programming 
distributors package their programming. In addition, we seek 
information on the ability of programmers to sell programming.
    8. Further, we request comment regarding public, educational, and 
governmental (``PEG'') access and leased access channels and the number 
of channels being used for each of these purposes. We also seek 
information on the use of leased access channels, either on a part time 
or full time basis. We request comment on the effectiveness of our 
program access, program carriage, and channel occupancy rules. We seek

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information regarding video programming providers' experiences offering 
closed captioning and video description.
    9. We also ask for information on advanced service offerings (e.g., 
high-speed Internet access services, telephony, video-on-demand, high 
definition television, interactive television) and new ways of offering 
service (e.g., personal video recorders, streaming video) that are 
being deployed by video programming distributors. Specifically, we 
request information regarding the amount and type of programming being 
offered in high-definition television (``HDTV'') format. We seek 
updated statistics such as the cost of such services, the 
subscribership to these services, and the number of homes to which each 
type of service is available. Further, we seek information on the 
impact that the availability of non-video services offered by video 
programming providers has on the nature of competition in the video 
marketplace. We request comment on the development and deployment of 
ITV services. We request information on the extent to which video 
programming distributors offer or plan to offer EPGs. To what extent 
are national distributors of EPGs affiliated with video programming 
distributors? To what extent are EPGs that are affiliated with a video 
programming distributor available to competitors? We seek comment on 
the availability and compatibility of customer premises equipment used 
to provide video programming and other services. How many households 
have one or more devices? We seek information on the retail 
availability of navigation devices to consumers.

Cable Television

    10. We plan to report on the performance of the cable television 
industry, and request data and comments on the current state of 
competition in this segment of the market. We seek statistical 
information on the cable industry generally and specifically the 
financial performance of the industry, capital acquisition and 
disposition, rates, channel capacity, programming costs, homes passed, 
subscribership, viewership, new service offerings, and the investments 
that cable operators have made to upgrade their plant and equipment.
    11. We request information on the deployment of various technical 
methods to increase capacity. For individual MSOs, we request data on 
the number of systems upgraded, the analog channel capacity resulting 
from upgrades, the digital channel capacity resulting from upgrades, 
the number of systems with digital tiers, the number of households 
where digital services are available, and the number of subscribers to 
digital services. What types of programming are available on digital 
tiers?
    12. We seek information on cable system transactions, including the 
names of the buyer and seller, the date of the transaction, type of 
transaction (i.e., sale, swap, or trade), name and location of the 
system, homes passed and number of subscribers, and the price. We seek 
similar information for non-cable video programming providers. We also 
request comment on the practice of clustering, whereby operators 
concentrate their operations in specific geographic areas. We request 
data regarding the effect of clustering by cable operators on 
competition in the video programming distribution market.
    13. We seek comment on whether cable operators are changing the way 
they package programming. We also are interested in information on 
whether, and if so how, cable operators are restructuring their 
programming packages and tiers of service as a result of actual or 
potential competition.
    14. We further request information about the availability of 
advanced services such as digital video, high-speed Internet access 
services, telephony, video-on-demand, and the amount and type of 
programming being offered in HDTV format. To what extent are consumers 
now purchasing cable modem equipment certified by CableLabs under their 
Certified Cable Modem Project, rather than renting from video 
programming distributors? We also seek the most recent information 
regarding the development of specifications for interoperable set-top 
boxes on Cable Television Laboratories, Inc.'s OpenCable process. What 
percentage of existing equipment is compatible with the OpenCable 
standards? What developments have taken place in the last year relating 
to the POD-Host Interface, or PHI license, that affect the deployment 
of navigation devices or their availability at retail stores? Finally, 
we solicit updated information on PacketCable, a CableLabs project 
intended to develop interoperable interface specifications for 
delivering advanced, real-time multimedia services over two-way cable 
plant. What is the status of the testing and implementation of this 
standard?
    15. We seek information on cable operators that currently provide 
or plan to provide server-based offerings. Under these systems, the 
programming services reside at a central location and are accessible on 
demand. What types of services are offered in this manner? What are the 
regulatory implications of server-based services? What effect does 
server-provided video have on a programmer's ability to launch a new 
service?
    16. Section 612(g) of the Communications Act provides that at such 
time as cable systems with 36 or more activated channels are available 
to 70 percent of households within the United States and are subscribed 
to by 70 percent of those households, the Commission may promulgate any 
additional rules necessary to promote diversity of information sources. 
Previously, we reported that the benchmark had not been met. Have there 
been any developments in the last year that would suggest that the 
criteria specified under Section 612(g) have been met? Under sections 
614 and 615 of the Communications Act, cable operators must set aside 
up to one third of their channel capacity for the carriage of 
commercial television stations and additional channels for 
noncommercial stations depending on the system's channel capacity. We 
seek information on the extent to which cable operators currently are 
using all their required set-aside channels for the carriage of local 
broadcast signals. Further, we seek information on the number of cable 
systems not subject to effective competition that lack addressable 
converters or have other technological limitations that prevent access 
to programming on a per channel or per program basis without 
subscription to tiers other than the basic tiers. Are there cable 
systems that will not meet the October 2002 deadline for the capability 
to allow ``buy-through''?

Direct-to-Home Satellite Services

    17. We seek updated information about direct-to-home (``DTH'') 
satellite services, which includes direct broadcast satellite (``DBS'') 
and home satellite dish (``HSD'' or ``C-Band'') services. We ask for 
information on subscribership on DBS and HSD services. Are there 
identifiable differences between consumers who choose to subscribe to 
DBS rather than cable or another video programming distributor? How 
many or what percentage of households cannot receive DBS service 
because they are not within the line-of-sight of the satellite signal? 
We seek comment on the geographic locations of DBS and HSD subscribers, 
by state and type of area (i.e., urban, suburban, rural). To what 
extent do DBS subscribers reside in areas not passed by cable systems?
    18. We request information on the number of markets where local-
into-

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local television service is offered, or will be offered in the near 
future, pursuant to Satellite Home Viewer Improvement Act of 1999 
(``SHVIA''), including the number and affiliation of the stations 
carried. What percentage of DBS subscribers are opting for local 
programming packages where available? In cases in which additional 
equipment is needed to receive a full complement of local signals, what 
percentage of subscribers are obtaining this additional equipment? We 
also request information on the impact on DBS subscribership and 
penetration as well as its effect on the video programming market 
generally. What percentage of DBS subscribers continues to subscribe to 
cable in order to receive local broadcast signals?
    19. We request data that will allow us to compare DBS and cable 
rates for programming packages and equipment. What is the typical cost 
of DBS equipment and installation? We request information regarding DBS 
operator equipment leasing program options, including the monthly rates 
charged for leasing equipment. To what extent do satellite operators 
subsidize equipment costs in order to attract subscribers? Have DBS 
rates for some programming packages increased over the last year? What 
factors affect changes in DBS prices?
    20. We seek information on the status of Internet access services 
offered by the DBS industry. We seek information regarding other 
advanced services offered or co-marketed by DBS operators. To what 
extent are DBS operators offering programming in HDTV format? What 
marketing arrangements have non-DBS video programming distributors 
entered into to provide DBS service to their customers?

Broadcast Television

    21. We seek information on the role of broadcast television in the 
market for the delivery of video programming. We request information on 
the number and percentage of MVPD subscribers who rely on off-air 
reception for local broadcast service on one or more television sets, 
by type of MVPD service. In addition, what percentage of households 
have only over-the-air broadcast television reception on all television 
sets?
    22. We request information regarding the amount and type of 
programming (e.g., network, local, syndicated) being broadcast on 
digital channels, including the extent to which DTV channels are being 
used for HDTV, the extent to which they are being used for multichannel 
program offerings (``multicasting''), and the extent to which they are 
being planned as ancillary and supplementary services such as 
subscription services. We also seek information on DTV carriage 
agreements between broadcasters and cable operators and the status of 
any such negotiations. In addition, we request information on the sales 
of DTV consumer equipment and the factors affecting consumer adoption 
of DTV equipment.

Wireless Cable

    23. We seek information regarding the previously identified trend 
towards declining subscribership for MMDS-provided video. We request 
fact-based projections and forecasts on the future of video programming 
distribution via MMDS technology. What factors affect the health and 
viability of the MMDS industry? We seek information about the 
availability of advanced services such as digital video, high-speed 
Internet access services, and telephony. What is the current 
availability of two-way services such as high-speed Internet access and 
telephony by MMDS operators?

Satellite Master Antenna Systems

    24. SMATV systems, also known as private cable operators or private 
communication operators, are video distribution facilities that use 
closed transmission paths without using any public right-of-way. We 
request data for SMATV systems, including subscribership levels, 
service areas, and the identities of the largest operators. We also 
request information on the types of services offered by SMATV providers 
and the price charged for those services. How do the programming 
packages offered and the price of SMATV service compare to those of 
incumbent cable operators? Are there services that SMATV operators 
provide their subscribers that cable, DBS, and other technologies do 
not? Finally, what factors affect the health and viability of the SMATV 
industry?

Open Video Systems

    25. We request information on the operation of open video systems, 
including the number of homes passed, the number of subscribers, and 
the types of services being offered by OVS operators. How are video 
services provided by OVS operators packaged and what is the typical 
cost for monthly service? To what extent are open video systems joint 
ventures between video service providers and other entities and what 
are the arrangements among the participants in such ventures? Are 
unaffiliated programmers seeking carriage on open video systems? How 
many programmers and what type of programming is being offered on this 
basis? To what extent are OVS operators offering voice and data 
services? How are such service offerings packaged and at what price to 
consumers? What effect has the City of Dallas, Texas v. FCC decision 
had on the growth of OVS? Are OVS operators combining such systems with 
franchised cable operations to serve specific geographic regions?

Local Exchange Carriers and Utilities

    26. We seek information regarding LECs, long distance telephone 
companies, and utility companies that provide video services. We 
request information on franchised cable systems operated by LECs, both 
within their telephone service areas and outside those regions. To what 
extent are LEC video programming services being bundled with telephone, 
Internet, or other utility services?

Broadband Service Providers

    27. We seek current information regarding the provision of video, 
voice, and data services by broadband service providers (``BSPs''). We 
request data on the geographic locations of such systems, whether they 
operate as franchised cable systems, the number of homes passed, and 
the number of subscribers they serve. We ask commenters to provide 
information regarding the video service packages that are offered and 
the rates charged for the various packages. Are video services offered 
in combination with advanced services? We further seek comment on the 
current and potential effect of BSPs on the status of video 
competition. What are the technical and economic obstacles to the 
successful operation of systems of this type? Are there issues 
involving pole attachments, access to programming, competitors' rates, 
broadcast signal retransmission consent, equipment availability, access 
to MDU inside wiring, or local municipal regulation that affect the 
viability of BSPs as competitors in the market for the delivery of 
video programming?

Home Video Sales and Rentals

    28. We seek information regarding the home video sales and rental 
market. We request data on the number or percentage of households with 
videocassette recorders, laser disc players, DVD players, and PVRs. We 
request information on the amount of programming available in VCR, DVD, 
and laser disc formats for sale and rental. How does the cost of 
renting a video or DVD movie compare to the cost of a pay-per-view, 
video-on-demand, or near video-on-demand movie from a

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video programming distributor? We seek information on the development 
of the Internet as a means through which some video retailers are 
selling their videos. Further, we seek information on the development 
of companies offering PVR services in conjunction with video 
programming distributors, equipment manufacturers, advertisers, and 
programmers.

Internet Video

    29. Finally, we seek information on the types of video services 
currently being offered over the Internet and fact-based projections of 
when Internet video will become a viable competitor in the market for 
the delivery of video programming. We also solicit information on the 
technological, legal, and competitive factors that may promote or 
impede the provision of video over the Internet.

Procedural Matters

Ex Parte

    30. There are no ex parte or disclosure requirements applicable to 
this proceeding pursuant to 47 CFR 1.1204(b)(1).

Filing of Comments and Reply Comments

    31. Pursuant to Secs. 1.415 and 1.419 of the Commission's rules, 47 
CFR 1.415, 1.419, interested parties may file comments on or before 
July 29, 2002, and reply comments on or before August 30, 2002. 
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 24121 (1998).
    32. 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 filed. 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, U.S. 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 ecfs@fcc.gov, and 
should include the following words in the body of the message, ``get 
form your e-mail address>.'' A sample form and directions will be sent 
in reply.
    33. Parties who choose to file by paper must file an original and 
four copies of each filing. If more than one docket or rulemaking 
number appear in the caption of this proceeding, commenters must submit 
two additional copies for each additional docket or rulemaking number. 
Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail (although we continue to experience delays in receiving U.S. 
Postal Service mail). The Commission's contractor, Vistronix, Inc., 
will receive hand-delivered or messenger-delivered paper filings for 
the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, 
Washington, DC 20002. The filing hours at this location are 8 a.m. to 7 
p.m. All hand deliveries must be held together with rubber bands or 
fasteners. Any envelopes must be disposed of before entering the 
building. Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class mail, 
Express Mail, and Priority Mail should be addressed to 445 12th Street, 
SW., Washington, DC 20554. All filings must be addressed to the 
Commission's Secretary, Marlene H. Dortch, Office of the Secretary, 
Federal Communications 445 12th Street, SW., Room TW-A325, Washington, 
DC 20554. The Media Bureau contact for this proceeding is Anne Levine 
at (202) 418-7027, or at alevine@fcc.gov.

Ordering Clause

    34. 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.
Marlene H. Dortch,
Secretary.
[FR Doc. 02-17516 Filed 7-11-02; 8:45 am]
BILLING CODE 6712-01-P