FCC Reports Decline in Cable Subscribers

Although the FCC's Thirteenth Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming was adopted Nov. 27, 2007, it wasn't released until last Friday.

The report notes that almost all consumers are able to obtain programming through over-the-air broadcast television, a cable service, and at least two DBS providers.

It reported consumers in some areas may have access to video programming distributed by emerging technologies such as digital broadcast spectrum, fiber-to-the-home facilities, or web-based Internet video.

“Through the use of advanced set-top boxes and digital video recorders, and the introduction of new mobile video services, consumers are now able to exercise more control over what, when and how they receive information,” the report says.

The largest multichannel video programming distributor (MVPD) remains cable, with 68.2 percent of all MPVD households, although the report says cable subscribership declined slightly since the 2005 report. The total number of MPVD households increased from 2005 through June 2006, from 109.6 million to 110.2 million. DBS subscribers represented 29.2 percent of total MPVD houses in June 2006, up from 27.7 percent in June 2005.

The report quotes Nielsen estimates showing 15.5 million households (about 14 percent of the total 111.4 million total U.S. television households) do not subscribe to any MVPD service and rely solely on over-the-air broadcasts. It notes many households that subscribe to an MPVD service also relay on over-the-air signals to receive broadcast programming on some of their TV sets.

This required report to Congress was over nine months over due. Commissioner (now Interim FCC Chairman) Michael Copps, in his statement on release of the report, said he has been deeply concerned about increasing concentration in the cable industry ever since he arrived at the commission six years ago.

“I simply can’t see how American consumers benefit when a handful of vertically-integrated media giants have so much control over so much content,” he said. “This industry structure provides precious little space for the creative genius of independent content producers and artists. And it has led to prices that continue to rise far faster than inflation. For years, I have also been troubled by the approach of the FCC’s annual video competition report, which I think has unreasonably minimized the harm that increased consolidation has visited upon the American consumer. In particular, I have expressed serious doubts about our reliance on industry supplied video customer data. Indeed, one of my top priorities here at the Commission has been to improve our data-gathering for all the industries we regulate and to ensure that all our decisions are grounded in the best available data and analysis.”

Copps noted new evidence indicates the existing industry-supplied customer counts used in the Report may not be valid and “the cable industry may very well have met the 70/70 threshold established by Congress.”