FCC: Cable Strong with 75% Penetration

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The cable industry's grip on the pay TV market remains firm at 75% subscriber penetration despite a decade of robust competition from satellite providers DirecTV Inc. and EchoStar Communications Corp., the Federal Communications Commission said in a report Wednesday.

The FCC said cable companies served 70 million of the country's 94 million pay TV households as of June 30, 2003.

A decade ago, the industry had nearly 100% market share, but the introduction of DBS began to cut cable’s share. DirecTV, EchoStar and other noncable pay TV providers currently serve nearly 24 million subscribers, the agency said.

"Cable television remains the predominant technology for the delivery of video programming. Ten years ago, cable operators served almost 100% of the nation's subscribers. Today, cable's share has fallen to approximately 75% of all [pay TV] subscribers," the commission said.

Under law, the FCC is required to file a cable-competition report with Congress annually. The agency used this year's report to examine major market trends since the release of the first report a decade ago.

While noting DBS' aggressiveness, the FCC reported stated that cable competition from local phone companies -- a development encouraged by Congress -- had not materialized.

The report also noted that over the decade, nominal cable rates rose "significantly," jumping 53.1%, compared with a 25.5% increase in the Consumer Price Index.

National Cable & Telecommunications Association president Robert Sachs released a statement saying that the "FCC report reaffirms the sweeping competitive changes that have taken place in the video marketplace over the past 10 years."