Comcast, NAB Dispute DBS Over Video Competition
Comcast and NAB weighed in against DBS comments for the annual FCC assessment of competition in video programming delivery. Comcast said in reply comments “any fair-minded observer would have seen abundant additional evidence” of growing competition. It noted DirecTV and EchoStar reported 2nd quarter results that exceeded most analysts’ expectations. DirecTV said it added a record 944,000 gross operated subscribers and reduced its monthly churn to 1.4% to yield 455,000 net operated subscriber additions, Comcast said. EchoStar said it added about 340,000 net subscribers in the quarter.
DirecTV said cable operators are missing the point when they claim effective competition has been achieved because DirecTV and EchoStar have 25% of the MVPD subscribers nationally. The critical metric is market share per local franchise area, DirecTV said, and in most local markets, cable operators continue to have the upper hand. Also, DirecTV said cable’s dominance is due in part to regional operators combining their systems and improving their program acquisitions position “with respect to local broadcast programming and regional sports programming -- the 2 varieties of ‘must have’ programming.” While the cable operators in general have typically controlled the market share in their respective DMA, the share was split among several operators, DirecTV said: “Clustering has enable cable MSOs to concentrate their subscribers and achieve market share levels throughout many of the largest DMAs that they previously enjoyed only in their individual franchise area.”
Meanwhile, NAB said the Satellite Bcstg. & Communications Assn. and EchoStar filed comments containing a variety of “mistaken factual claims and ill- conceived policy proposals.” Contrary to their claims about severe capacity constraints, DBS companies have plans to rely on many different methods for substantially increasing their ability to deliver local stations, NAB said. Methods such as improved MPEG-4 compression technology and combining Ku-band and Ka-band spectrum, “will enable satellite carriers to offer not only universal analog local-to-local but also local digital, high definition and multicast signals,” NAB said.
Verizon said “removing federal regulatory impediments to the deployment of broadband would facilitate increased competition in video offerings.” Verizon said the FCC also should encourage state and local govts. to eliminate “obstacles” to deployment -- for example by streamlining the franchising process and repealing “so-called ‘level playing field’ statutes that deter entry by video competitors.” The company urged the FCC to “support the use of open standards that do not favor any particular technology or industry group” and complained that the “terrestrial loophole” in the Commission’s program access rules hampers competition.
“The Commission can help ensure greater competition both in the broadband market that cable companies continue to dominate and in the cable companies’ core video market by establishing a deregulatory national broadband policy,” Verizon said. Verizon said fiber overbuilders offer more video competition so “establishing a deregulatory broadband national policy that applies equally to all providers is essential to successful competition from next-generation infrastructure,” Verizon said. “In the short term, the Commission can help remove regulatory barriers to fiber deployment (and hence to increased competition in video offerings) by treating [fiber to the home] broadband like cable modem service on an interim basis until the pending rulemaking proceedings have been completed.”
Encouraging the entry of rural LECs into the video market can give consumers more choice and encourage more deployment in rural areas but “unfortunately, substantial hurdles remain,” OPASTCO said. “Restrictive practices such as forced carriage of unwanted channels, forced inclusion of channels in certain tiers, mandatory nondisclosure provisions and unequal treatment by content providers, all serve as barriers to rural telephone companies’ efforts to provide video services to their communities,” the group said.