FCC

FCC Releases Video Competition Report

7/20/2012 3:54 PM Eastern

The Federal Communications Commission released its fourteenth annual video competition report on Friday, covering 2007 through 2010, and as Multichannel News reported more than six weeks ago, it differs from the 2006 report by not concluding that competition from telco, satellite and online providers is insufficient to hold down cable prices.

Cable operators would have preferred the FCC to have concluded the marketplace was sufficiently competitive to justify revisiting current regulations, including program carriage and access mandates, but the report is short on conclusions, period.

The report points out that cable operators account for less than 60% of all MVPD subs, down from 65% in 2006. But while video sub counts have been falling, says the FCC, MVPDs have still done well by increasing sales of phone and Internet.

The report says satellite operators have increased their share of the market from 29% to 33%,but says the most significant change in the status of competition has been the addition of AT&T and Verizon, which now account for about 7% of the MVPD market.

TV Everywhere access to some of that programming on fixed and mobile Internet devices -- as in phones, tablets and computers -- also gets a nod as a significant development.

The report, for the first time, divides up the video universe into MVPD, broadcast TV, and OVD (online video distributor) and looks at the state of each market.

Commissioner Robert McDowell suggested the report led to a conclusion the FCC should have drawn. "I would have preferred for this report to affirmatively conclude that the video programming marketplace is competitive," he said, adding there was ample evidence for drawing that conclusion.

The report's view of online video was confined to professionally produced content rather than the "kitten on the piano" user-generated variety that populates the Web in numbers some would suggest are too big to ignore.

"Unfortunately, the report's analysis of the Internet's effect on the video market is generally limited to online video distributors offering professional content previously exhibited on television or theatrically," he said, which obviously reduces the among of video competition the FCC is crediting to over-the-top. "Although such content is clearly a driving force in the video market, the Internet, coupled with mobile devices, provides alternate outlets for content outside of the traditional media and entertainment structure. I hope that future reports will also explore the market effects of alternative and emerging online video distributors that are creating new and original content."

Commissioner Ajit Pai also had no trouble drawing his own conclusion, commenting that the report demonstrates that the video marketplace is "more competitive than it has ever been." He also put in a plug for putting out the report annually.

The FCC Friday also issued a notice of inquiry to collect data for 2011 and 2012.

"Given the fast pace of change within the industry, it is vital that the Commission comply with it statutory mandate to "annually report to Congress on the status of competition in the market for the delivery of video programming," said Pai. "Our record on this score is a matter of public record and need not be repeated here. I am hopeful, however, that we are back on track and that we will release our next report in 2013." Comments are due Sept. 10 and reply comments Oct. 10.

The notice says the FCC will continue to divide the market into MVPD, broadcast and OVD. The FCC is currently also seeking comment on whether OVDs should be defined as MVPDS, so that could change in future reports.

March