NCTA: "VIDEO COMPETITION HAS FULLY TAKEN HOLD" (filing attached)
Washington, DC -- Competition in the multichannel video market continued to increase over the past year, and "there is ample evidence now for the Commission to conclude that video competition has fully taken hold," the National Cable & Telecommunications Association stated in comments submitted to the Federal Communications Commission today. The NCTA comments responded to the FCC’s request for input as the agency prepares its eighth annual report to Congress on the status of competition in the video-delivery market.
The comments documented the continued growth of cable competitors, particularly direct broadcast satellite companies, in the expanding multichannel video market. "Over 20 million consumers - almost 23 percent of multichannel video subscribers - now obtain multichannel video programming from a company other than their local cable operator," an increase of more than 2.9 million customers (16.9 percent) over the previous year.
The comments underscored the moderating effect that deregulation and competition have had on cable price increases. In the final three years of federal cable regulation, government-approved cable prices rose about three times faster than inflation, the filing notes. But that trend changed dramatically after cable deregulation in March 1999.
"The latest BLS statistics show that increases in the cable price index in the last 15 reported months (from March 2000 through June 2001) exceeded inflation by less than one percent," the submission states. During that period, the Bureau of Labor Statistic’s cable index rose 4.95 percent while its overall Consumer Price Index went up 3.97 percent. For the previous year (March 1999 to March 2000), the cable index was up 4.62 percent compared with a 3.76 percent gain for the CPI.
These numbers were posted even as cable operators faced double-digit cost increases for programming fees and capital expenditures, the filing notes. Deregulation and competition spawned by the 1996 Act have produced house-to-house competition for video service customers -- "exactly the result Congress had hoped for - more choices for consumers and a significant moderation in price increases even while viewers have benefited from a dramatic increase in quality and quantity of cable programming," the NCTA said.
DBS now has 18.1 percent of all subscribers to multichannel video program distributors, and cable’s share has dropped to 77.14 percent, the NCTA submission states. Of 88.79 million U.S. multichannel subscribers as of July 2001, traditional cable had 68.49 million, DBS claimed 16.07 million, satellite C-Band had 1.02 million, MMDS (wireless cable) had 700,000, satellite master antenna television had 1.5 million, local telephone companies had 350,000 and broadband overbuilders had 660,000.
"In this competitive environment, cable, DBS, telephone companies and other players compete every month for the subscribers’ loyalty," the NCTA concluded. "And consumers will continue to be the beneficiaries as the array of services and competitors continues to grow."
The National Cable & Telecommunications Association (NCTA), formerly the National Cable Television Association, is the principal trade association of the cable television industry in the United States. NCTA represents cable operators serving more than 90 percent of the nation’s cable television households and more than 150 cable program networks, as well as equipment suppliers and providers of other services to the cable industry. In addition to offering traditional video services, NCTA's members also provide broadband services such as high-speed Internet access and telecommunications services such as local exchange telephone service to customers across the United States.
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