FCC: Cable's Share Slips to 78%

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Due to robust growth by direct-broadcast satellite carriers, the cable
industry's share of the pay TV market slipped from 80 percent to 78 percent for
the year ending June 2001, the Federal Communications Commission reported
Monday.

In a report to Congress -- the agency's eighth on the status of competition
in the cable industry -- the FCC concluded that cable remained the dominant
video-programming provider despite the strong showing by the DBS industry.

DBS carriers ended the reporting period with 16 million subscribers, up 3
million, or 23 percent, from the previous year. Cable operators, by contrast,
added 1.3 million subscribers, up 1.9 percent.

The FCC said the overall pay TV market grew 4.6 percent to end the reporting
period with 88.3 million subscribers, compared with 84.4 million the previous
year.

Noncable companies served 19.3 million pay TV subscribers, meaning that
slightly more than one in five subscription TV households are not customers of
incumbent cable operators, which had about 95 percent of all pay TV subscribers
eight years ago.

The FCC said competition is forcing cable operators to respond by lowering
prices or adding channels without raising monthly rates.

Nevertheless, the agency said, cable rates rose 4.24 percent during the
12-month period, slightly higher than the 3.25 percent increase in the national
inflation rate as measured by the Bureau of Labor Statistics' Consumer Price
Index.

The BLS makes some adjustment for cable-channel additions in the cable
CPI.

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