FCC Releases Cable Ownership Study

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The Federal Communications Commission released an in-house study Monday that
used laboratory conditions to model the behavior of cable-system and
cable-network owners based on the number of subscribers controlled by the
operators.

The FCC asked Pennsylvania State University economist Anthony M. Kwasnica to
run 'experimental economics' studies in part to help the agency craft rules
capping the number of pay TV subscribers one cable company may serve.

The lab tests involved students in the roles of cable operators and
programmers in bargaining situations.

According to a summary, the 117-page study found that from a programmer's
perspective, a cable company with 27 percent of subscribers had about the same
bargaining power as a cable company with 51 percent.

The study also found that a direct-broadcast satellite carrier would pay
higher programming fees in a market dominated by two MSOs with 44 percent and 39
percent market shares, respectively, than in a market where the largest MSO had
27 percent share.

In other findings, the FCC study disclosed that networks with the least
popular programming had the most trouble collecting carriage fees that covered
their costs.

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