FCC BROADENS ITS ANNUAL INQUIRY INTO VIDEO COMPETITION

The FCC issued an expanded inquiry into the state of the video competition market, asking more questions than the agency has in the past about the effects of horizontal and vertical integration on the availability and pricing of video programming. The Notice of Inquiry also seeks data on several technical issues, including equipment and emerging services, as well as information on the effects of current regulations and data on foreign video markets. The agency uses the data to prepare an annual report to Congress.

The inquiry also indicates the FCC might consider issuing a rulemaking if stakeholders don’t provide complete and accurate data. Chmn. Powell admonished companies to participate and provide comprehensive information. “Good decisions are built on good data,” Powell said at the FCC meeting last week. Comr. Abernathy pleaded with the industries involved to “please be responsive to us. I don’t want to be in the position to mandate reports.”

Last year, Comrs. Adelstein and Copps complained that the FCC’s inquiry was shallow and didn’t contain enough data to provide a full picture of the market. “At a time of significant increases in cable rates year after year, I felt that Congress and American consumers deserved a better effort,” Copps said. Copps said he was pleased the Commission was committing to undertake a more “proactive” effort for the new report, the 11th annual video competition study. He said the agency would also consider issuing a rulemaking to obtain better data, if that’s necessary because of lack of industry participation.

Martin noted increasing consumer concern about cable rates. Adelstein said he was particularly pleased that the inquiry asks about issues facing rural and smaller markets and said it was appropriate that the FCC report on the vertical integration of programmers and all major media companies. “Many in Congress have been asking for a deeper understanding of the factors that underlie cable pricing and competition, and the consequences for consumers,” Adelstein said.

The inquiry seeks information on, among other things, prospects for new entrants to the market, factors that have facilitated or impeded competition, and the effect of competition on industry groups and consumers. The notice seeks comments and information on all video distributors, including those using both wireline and wireless technologies. Among those from whom the agency wants information are cable systems, DBS providers, home satellite dish providers, broadband service providers, private cable or satellite master antenna TV systems, open video systems, multichannel multipoint distribution services or wireless cable systems, LEC systems, utilities and broadcast TV stations. The inquiry also points to video programming provided via videocassettes and DVDs through retail stores and over the Internet.