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Commenters also may provide any other information or analysis they deem relevant for this report.  S( "\ ,>(>(IIr"  S(II.X MATTERS ON WHICH COMMENT IS REQUESTED (#  S(  S( A.` ` The Availability of Competitive Choices for Consumers  S`( ` P3.` ` Markets for the delivery of video programming are served by video distributors using both  xBwired and wireless technologies. Video distributors include multichannel video programming distributors  xp("MVPDs"), such as cable systems, direct broadcast satellite ("DBS") service, and home satellite dish  x\("HSD") service, private cable or satellite master antenna television ("SMATV") systems, open video  xfsystems ("OVS"), multichannel multipoint distribution service ("MMDS"), and instructional television  S(fixed service ("ITFS"), as well as overtheair broadcast television service.$ yO ( x`ԍIn earlier reports, we included local multipoint distribution service ("LMDS") and interactive video and data  {O ( xservices ("IVDS") among technologies for the delivery of video programming. However, as noted in the 1998  {O ( xCompetition Report, it appears that LMDS and IVDS will not be used for video services. 1998 Competition Report, fn. 6, 87.  SH ( ` 4.` ` Congress and the Commission have sought to eliminate barriers to competitive entry and  x.establish market conditions that promote competition to foster more and better options for consumers at  xLreasonable prices. Beginning with the 1992 Cable Television Consumer Protection and Competition Act  S ( xof 1992 ("1992 Act"),S  yO$(ԍPub. L. No. 102385, 106 Stat. 1460 (1992).S Congress removed several barriers to competition. D yO( xFԍThe 1992 legislation was intended "to encourage competition from alternative and new technologies, including  x<competing cable systems, wireless cable, direct broadcast satellites, and satellite master antenna systems." House  {OD( x`Committee on Energy and Commerce, H.R. Rep. No. 628, 102d Cong., 2d Sess. (1992) at 27. See also Senate  x`Committee on Commerce, Science, and Transportation, S. Rep. No. 92, 102d Cong. 1st Sess. (1991) at 18. To  {O( x@accomplish this goal, the 1992 Act inter alia prohibited exclusive franchises and established program access, channel  yO(occupancy, and program carriage rules.  At that time, Congress also  xVestablished rate regulation in the absence of "effective competition," although Congress expressed a clear  xpreference to allow competition rather than rate regulation as the mechanism for keeping cable rates  SX( x&reasonable.|XX  yO( x$ԍ"It [Section 623(a)] expresses a preference for competition and that the rates for cable service shall not be  yO( xjsubject to regulation if the cable system is subject to effective competition." House Committee on Energy and Commerce, H.R. Rep. No. 862, 102d Cong., 2d Sess. (1992) at 60.| The Telecommunications Act of 1996 ("1996 Act") was intended to extend the pro xcompetitive provisions of the 1992 Act and to establish a "procompetitive deregulatory national policy  S( xframework" for the telecommunications industry. {O (ԍPub. L. No. 104104, 110 Stat. 56 (1996).  See also H.R. Rep. No. 104458, 104th Cong., 2d Sess. 1 (1996). In addition, in the 1996 Act, Congress established a  S(sunset for CPST rate regulation on March 31, 1999.J r yO"(ԍ47 U.S.C. 543(c)(3), (c)(4). J  S( ` L5.` ` In the 1998 Competition Report, the Commission found that incumbent cable systems  Sj( xremain dominant in the market for delivery of video programming with an 85% share of all MVPD"j ,>(>(II"  S( xsubscribers, although their share continues to decline.  {Oh(ԍ1998 Competition Report, 13 FCC Rcd at 24287, 2441824420 6, Appendix C, Table C1. For the 1999 Competition Report, we seek  xinformation and comment that will allow us to evaluate the status of competition in the video marketplace,  xits effect on the cable television industry, and prospects for increased competition. We are interested in  xevaluating the extent that consumers have choices among video programming distributors and delivery  x0technologies and comparing the various video distribution alternatives available to consumers. In  x$particular, we seek data that will allow us to compare the alternatives available to consumers in terms of  xvideo programming offerings, prices for programming services and associated equipment, and other  xservices provided (e.g., telephony, data access). We invite comment on the effect of recent statutory and  xregulatory changes on competition for the delivery of video services. We request information regarding  x\existing or potential regulatory impediments that may deter entry or prevent expansion of competitive  xhopportunities in video program delivery markets. We also ask commenters to identify specific  x Commission rules, policies, or regulations that ought to be reexamined in light of current competitive opportunities within multichannel video programming markets.  S ( ` 6.` ` In recent Competition Reports, we presented several case studies of local markets where  S ( xcable operators faced actual competition from MVPD entrants. \ Z {O( xxԍ1998 Competition Report, 13 FCC Rcd at 2439524404  208231; 1997 Competition Report, 13 FCC Rcd  {On( xnat 113040 178210; 1996 Competition Report, 12 FCC Rcd at 445262 20133. In each of these cases the Commission determined that the statutory conditions for "effective competition" were met.  This year, we request information on  xthe effects of actual and potential competition in these and other local markets where consumers have, or  xVsoon will have, a choice among MVPDs. In particular, we seek updated information on MVPD services  xin those areas included in our previous case studies to determine whether the initial effects of competition  xcontinue. We also ask commenters to provide specific data regarding other areas where headtohead  xBcompetition exists, or is expected to exist in the near future, between cable and other MVPDs, or among  xvarious types of MVPDs. How has such competition affected prices, service offerings, quality of service,  xand other relevant factors? What regulatory changes have facilitated headtohead competition in local markets between or among MVPDs? What barriers still exist which inhibit further competition?  S( ` 7.` ` In addition to analyzing select case studies, in the 1999 Competition Report, we want to  x$present a broader picture of the current state of competition on a local, regional, and national basis. We  xlask commenting parties to provide information that will assist us in this assessment of competitive  xalternatives available to consumers. We seek detailed information on the types of competitive alternatives,  x comparisons of the services offered, both video and nonvideo, and the prices charged for these service and  x~associated equipment. We are interested in information regarding the existence and extent of competitive  xLalternatives by locality, television market (i.e., by designated market area or "DMA"), geographic region,  xand nationwide. We ask commenters to provide information on the number of consumers having choices  xtand a description of the available choices. For example, we want to update our information on the status  xof competition from overbuilds, from both local exchange carrier ("LEC") and nonLEC operators, and  xrequest data on the number and location of overbuilt markets, including maps and other information  xregarding the overlapping coverage areas of competing services. How many television households have  xa choice between cable systems or between an incumbent cable system and an open video system? How  xmany households can choose between an incumbent cable operator and a wireless technology? We  xrecognize that DBS passes every home in the continental U.S., although not all homes can receive this  xtservice. How many homes can choose between DBS and an incumbent cable operator or other MVPD? "!~ ,>(>(II|"  x~To what extent can consumers choose between two, three, four, or more video programming distribution  xservices? For each area where consumer choice exists, we seek information on: (a)the identity of the  xcompetitors; (b)the distribution technology used by each competitor; (c)the date that each competitor  xentered the market; (d)the location of the market, including whether it is predominantly urban or rural;  x(e)an estimate of the subscribership and market share for the services of each competitor; (f)a description  xBof the service offerings of each competitor; (g)differentiation strategies each competitor is pursuing; and  x(h)the prices charged for the service offerings. Moreover, we seek comment on the actual or announced  xconsolidation of cable companies and the consolidation of DBS companies. What effect are these  S( xmarketplace consolidations having on consumer choice and the prices charged for video programming  xVservices? We also request comment on the effect of the reported decision of several wireless companies  x$to offer DBS service rather than their own video programming on consumer choice in terms of program  SH (offerings and price. H  {O ( xԍSee, e.g. `Dependent' on DirecTV, Heartland Wireless and Wireless One Dropping Video Focus,  yOz (Communications Daily, March 22, 1999, at 1.  S ( `  8.` ` In the 1997 and 1998 Competition Reports, we considered multiple dwelling units  S ( x("MDUs") a separate submarket.  " {O( xdԍ1997 Competition Report, 13 FCC Rcd at 11091114 129139; 1998 Competition Report, 13 FCC Rcd at 2436324370  129143. For the 1999 Competition Report, we would like to update our  xinformation on video delivery competition for and within MDUs. How common is it for consumers to  xhave choices among MVPD services within a particular MDU? What factors influence MDU competition?  xHow do the program offerings and prices charged by competing MVPDs serving an MDU compare? How  xdo the program offerings and prices charged by MVPDs serving MDUs compare with those of competing  xMVPDs serving the same geographic area? How comparable are the program offerings and prices charged  x0by MVPDs serving both MDUs and nonMDU customers in the surrounding area? Are MVPDs  xcommonly providing multiple services (i.e., video and nonvideo services) to MDU customers? If so, what  xservices are being provided, and in what geographic locations are the multiple services offered? Is the  xuse of exclusive video service contracts in MDUs increasing or decreasing? To what extent do MVPDs  xhave exclusive service contracts with MDU owners and how many are socalled "perpetual" exclusive  S( xcontracts? What impact do the inside wiring,m\| {O6( x|ԍSee Telecommunications Services Inside Wiring, Customer Premises Equipment, CS Docket No. 95184; Cable  {O( xHome Wiring, MM Docket No. 92260, Report and Order and Second Further Notice of Proposed Rulemaking, 13  yO(FCC Rcd 3659 (1998). m overtheair reception device ("OTARD"),. {OZ( xԍRestrictions on OvertheAir Reception Devices: Television Broadcast, Multichannel Multipoint Distribution  {O$ (and Direct Broadcast Satellite Services, CS Docket No. 9683, Second Report and Order, 13 FCC Rcd 23874 (1998).. and cable bulk  S( xrateW  yO"(ԍ1996 Act 301(b)(2), 47 U.S.C. 543(d).W rules have on MDU competition? Are there factors unique to the MDU market that have consequences for regulatory policy? " ,>(>(IIX"Ԍ S( &9 ` &9  B.` ` Competitors in Markets For the Delivery of Video Programming  S( `  9.` ` As in previous reports, we seek factual information and statistical data about the status of  xvideo programming distributors using different technologies, and changes that have occurred in the past &9 ` &9   S`( xyear.e` {O(ԍSee Competition Reports, 19941998, supra note 2.e For each video programming distribution technology, we seek information by company, by  xgeographic market served, and on an aggregate industry basis. In particular, we request data on the  xfollowing: (a) the number of homes passed (for wired technologies) and the number of homes capable  S( xjof receiving service (for wireless technologies);Z yO ( x~ԍThis includes the number of lineofsight homes for distribution technologies that require lineofsight for reception. (b) the number of operators; (c) the identities of the ten  S( xlargest operators (national market only); (d)the number of subscribers and penetration rates;" yO ( xԍTo the extent available, we also seek information on the numbers of subscribers to different levels of service  {O ((e.g., basic, cable programming service or "CPS," premium, payperview, near videoondemand, etc.)." (e)channel  x capacities and the number and types of channels offered; and (f) the number and types of services offered.  xIn addition, we request financial information for each technology, including firm and industry revenues,  x~in the aggregate and by sources (e.g., subscriber revenues, advertising revenues, programming revenues); cash flow; changes in stock prices; investments; capital acquisition; and capital expenditures.  S ( `  10.` ` For each video programming distribution technology, we also request information  xdescribing: (a)technological advances (e.g., deployment of digital services) that make or may make the  xttechnology competitive; (b) the effort (including steps, costs, and time) needed to increase the number of  xhomes passed or capable of receiving service; (c) the effort (including steps, costs, and time) needed to  x6increase the number of channels and types of services offered; and (d)regulatory and judicial  xdevelopments that affect the use of different technologies. We also seek information about investments  x$in twoway capability by distribution technology and by individual companies. In addition, in evaluating  xthe extent of competition among various MVPDs' services or technologies, we seek information and  xanalysis on the degree to which viewers or consumers consider the different types of MVPDs to be  x$substitutes, even though the individual MVPDs and types of MVPDs differ in terms of service offerings  xand prices. In particular, we request any information available on the extent to which customers have  x`switched from one provider or technology to another one, and information concerning what factors were  xresponsible for the switching, such as relative prices, service offerings, availability or lack of "favorite" programming, technical problems, ease of use, or special features available with a specific technology.  Sx( ` & 11.` ` We also request the following additional information for specific types of video distributors or distribution technologies:  S(  X(a) Cable Television. In our 1998 Competition Report, we observed that cable rates rose faster  S(  than inflation.q  {O$(ԍ1998 Competition Report, 13 FCC Rcd at 24288, 24311 9, 47.q We further noted that a portion of these rate increases is attributable to capital   expenditures for the upgrading of cable facilities, an increased number of video and nonvideo  S(  services offered, and increased programming expenditures. Moreover, as part of last year's report,",>(>(II"  S(  we included the results of an inquiry concerning cable television programming costs.S {Oh(ԍId. at 2445724480 Appendix F. S For this   vyear's report, we request information and comment on changes in cable rates, especially following   Tthe sunset of CPST rate regulation on March 31, 1999. We ask for information regarding the   dmagnitude of rate changes and the factors that have caused the changes in rates. Are such   hchanges attributable to investments made for facilities upgrades that provide increased channel   capacity, permit the development of digital service tiers, or allow cable operators to offer  S(  &nonvideo services (e.g., telephony, data)? To what extent are the changes in rates attributable to   increases in programming costs? Are these increases due to a rise in licensing fees, an increase   in the number of programming services offered, or a combination of both? What role do other   Nfactors play (e.g., increased labor costs, general inflation) in changes in cable service rates? Does   the existence of, or the potential entry of, competitive alternatives have a constraining pressure on cable rates? (#   XIn the last few years, cable operators have made substantial investments to upgrade their plant and  S (  &equipment to increase channel capacity, create digital services, or offer advanced services. Z yO( xԍSection 706 (b) of the 1996 Act defines "advanced telecommunications capability" as "highspeed, switched,  x@broadband telecommunications capability that enables users to originate and receive highquality voice, data, graphics,  {OZ( xand video telecommunications using any technology." 47 U.S.C. 157 nt. In its Report on Advanced  {O$( xTelecommunications Capability issued pursuant to Section 706, the Commission defined "broadband" as having the  xZcapability of supporting, in both the providertoconsumer (downstream) and the consumertoprovider (upstream)  xdirections, a speed (in technical terms, "bandwidth") in excess of 200 kilobits per second (kbps) in the last mile.  {M~( x`See Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a  xReasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the  {O(Telecommunications Act of 1996, CC Docket No. 98146, 14 FCC Rcd 2398, 2406 (1999) 20. We   Nseek information on the capital investments of the cable industry and whether they are continuing   at the same pace as in recent years. How much are particular companies and the industry as a   whole investing in upgrading facilities and equipment? Are these upgrades intended to increase   channel capacity, convert to digital technology, or establish facilities capable of providing   advanced services (e.g., data access, telephony)? Does the cable industry expect an increase in   revenue this year from these capital expenditures? If not, when does the cable industry expect   Xto see a significant return on its investments? We also solicit data on the availability of advanced   broadband services. Moreover, we are interested in what role, if any, the ability to provide   advanced broadband services plays in attracting subscribers to video programming services and   contributing to the competitiveness of a cable operator or other MVPD. We further request   information on the number of subscribers that have access to upgraded services and the number   of subscribers actually receiving the increased offerings and advanced services available as a result of system upgrades. (#   XWith respect to cable prices, we also request information on the extent to which cable operators  SP(  are offering bulk discounts to subscribers in MDUs. Are such discounts offered only when   operators face direct competition in a specific MDU or do cable operators offer such discounts   hgenerally? Are bulk discounts used in response to competition or do they reflect the increased  S(  efficiency and decreased cost of offering service to multiple homes in one building? What other"0 ,>(>(II"   0types of discounts do cable operators offer (e.g., senior citizen discounts) and how do they differ from the general residential subscriber rate? (#   XWe also seek comment on how programming services are being packaged for consumers. Are   cable operators restructuring their programming tiers now that CPST rate regulation has sunset?   If so, to what extent, are operators shifting programming from the basic service tier ("BST") to   rthe CPST and creating smaller basic tiers (i.e., "lifeline" tiers)? To what extent, are operators   shifting services to create uniform program offerings across their regional or clustered systems?   We seek comment on the economic, competitive, legal, and technical considerations that go into   creating such tiers of programming services. We are interested in information on whether, and   if so how, cable operators are restructuring their programming packages and tiers of service as a   :result of actual or potential competition. We also seek comment on whether, and to what extent, these efforts are intended to differentiate cable service from that of competing video services. (#   vXMost of the readily available information regarding cable service offerings and deployment of new   ^technologies is limited to the activities of major multiple system operators ("MSOs"). Yet, we   understand that other MSOs also are upgrading their cable systems or entering into agreements   that allow them to provide advanced services (e.g., digital programming, data access). We,   therefore, seek information on the service and technology deployment activities of medium and   Xsmall cable firms. To what extent do medium and small MSOs offer services in addition to video   programming to their subscribers? What factors influence the ability of smaller firms to upgrade   technologically? Are smaller firms implementing digital technologies or are they planning to deploy digital technologies in the foreseeable future? (#  S@(  ZX(b) DirecttoHome Satellite Services. We seek updated information about directtohome   r("DTH") satellite services, which includes direct broadcast satellite ("DBS") and home satellite  S(  0dish ("HSD") services. yOX( xԍDTH services use satellites to deliver video programming directly to subscribers. HSD users employ relatively  xlarge dishes (48 foot) to receive programming. DBS uses relatively small receiving dishes. For our reports, we  xinclude high power satellite services that use 1824 inch dishes and medium power satellites services that use 3640  {O( x^inch dishes in our definition of DBS. See, e.g., 1995 Competition Report, 11 FCC Rcd at 20802084 4852; 1998  {Oz(Competition Report 13 FCC Rcd 24323 61. In the 1998 Competition Report, we observed the continued growth of   2DBS subscribership and its effect on the increase on the proportion of MVPD subscribers  S(  choosing noncable alternatives.h| {O(ԍ1998 Competition Report, 13 FCC Rcd at 2428724288 7.h We also noted that over the previous year the number of HSD  Sz(  subscribers has been declining.iz {O(!(ԍId. at 2428724288, 2433524336 7, 80.i Moreover, last year we reported that much of the increase in the   nnumber of noncable MVPD households was attributable to the growth of DBS, which was  S*(  vattracting former cable subscribers and consumers not previously subscribing to an MVPD.U* {Oj$(ԍId. at 2428724288 7. U Are   these trends continuing? With respect to the number of DBS and HSD subscribers and penetration   levels, we request data on the geographic locations of DBS and HSD subscribers. Has DBS   penetration and subscribership increased in MDUs as a result of our OTARD decisions,"2 ,>(>(II"   particularly the most recent one allowing the placement of satellite dishes on exclusive use areas  S(  such as balconies and patios?) {O@( x6ԍRestrictions on OvertheAir Reception Devices: Television Broadcast, Multichannel Multipoint Distribution  {O (and Direct Broadcast Satellite Services, CS Docket No. 9683, Second Report and Order, 13 FCC Rcd 23874 (1998).) Are there identifiable differences between consumers who choose  S(  to subscribe to DBS rather than cable or another MVPD? We note that the ability of DTH  S(  services to provide broadcast television programming is limited under copyright law.C$ yOL(ԍ17 U.S.C. 119. C What   impact does this statutory constraint have on the ability of DBS to provide a service that competes   with, and to be viewed as a substitute for, incumbent cable systems? Do consumers continue to  S(  subscribe to cable service along with DTH satellite services, especially DBS, in order to receive   local broadcast service? How many and what proportion of DTH households also subscribe to   cable? To what extent is the DBS industry developing antennas to facilitate the reception of over  theair broadcast transmissions by their subscribers or providing their subscribers with broadcast  Sp(  :reception capability as part of their service?ep {O(ԍ1997 Competition Report, 13 FCC Rcd at 107273 58.e Have the recent court decisionsPpF {OV( xZԍSee CBS, Inc. et al. v. PrimeTime 24, Joint Venture, Order Affirming in Part and Reversing in Part Magistrate  {O ( x8Judge Johnson's Report and Recommendations, 9 F.Supp.2d 1333 (S.D. FL., May 13, 1998); CBS, Inc. et al. v.  {O( xPrimeTime 24, Joint Venture, Supplemental Order Granting Plaintiffs' Motion for Preliminary Injunction, Case No.  {O( x963650CIV (S.D. FL., July 10, 1998); CBS, Inc. et al. v. PrimeTime 24, Joint Venture, Findings of Fact and  {O~( xConclusions of Law, Case No. 963650CIVNESBITT (S.D. FL., December 23, 1998); CBS, Inc. et al. v.  {OH( xPrimeTime 24, Joint Venture, Final Judgment and Permanent Injunction, Case No. 963650CIVNESBITT (S.D.  {O( xnFL., December 30, 1998). See also ABC, Inc. v. PrimeTime 24, Joint Venture, 17 F.Supp.2d 467 (M.D. N.C., July  {O(16, 1998); ABC, Inc. v. PrimeTime 24, Joint Venture, 17 F.Supp.2d 478 (M.D. N.C., August 19, 1998). and Commission  SH (  actionsH ^  {OF( x@ԍSatellite Delivery of Network Signals to Unserved Households for Purposes of the Satellite Home Viewer Act,  {O(Part 73 Definition of Grade B Intensity, CS Docket No. 98201, 14 FCC Rcd 2654 (1999). regarding the delivery of distant network signals to households in "unserved" areas had any effect on the subscribership of DBS? (#  S (  X(c) Wireless Cable Service. In the 1998 Competition Report, we showed a decline in  S (  bsubscribership to wireless cable ("MMDS") systems.}  {O(ԍ1998 Competition Report, 13 FCC Rcd at 2428724288, 2433624337 7, 83.} It this trend continuing? There have been   several announcements by MMDS operators recently that they plan to abandon video service and   :use their frequencies for a variety of telecommunications services. Other MMDS operators have   announced plans to abandon their own video services and to market DBS service. What effect   &will these actions have on the status of competition and the choices available to consumers in the   video marketplace? In addition, recently there have been several announcements of planned   investments in wireless companies by other communications firms (e.g., long distance telephone companies). We request comment on the potential effect of these actions on competition.(#  SB(  X(d) Satellite Master Antenna Systems. SMATV systems, also known as private cable systems,   primarily serve MDUs. Publicly available information on SMATV systems is limited due to the   Fnature of their operations. Therefore, we ask commenters to provide detailed information" L ,>(>(II"   regarding SMATV services. We would like to identify the largest SMATV operators and the   geographic areas they serve. In which markets do SMATV providers have the highest penetration   Nand numbers of subscribers? What types of video and other services do SMATV providers offer   :their customers? How do prices compare to those of incumbent cable operators? Have alliances   Xbetween SMATV providers and DBS operators grown over the last year? Are there services that  S8(SMATV operators provide their subscribers that cable, DBS, and other technologies do not?(#  S(  xX(e) Open Video Systems. Congress established open video systems as one means for local   exchange carriers ("LECs") and others to enter the video marketplace. We request information   on the operation of open video systems by LEC and other entities, including the number of homes   lpassed, the number of subscribers, and the types of video and nonvideo services being offered on   OVS systems. To what extent are open video systems joint ventures between video service   providers and other entities (e.g., utility companies, Internet service providers) and what are the   Jarrangements among the participants in such ventures? An OVS operator must make channel   Jcapacity available for use by unaffiliated programmers. Are unaffiliated programmers seeking   carriage on open video systems? How many unaffiliated programmers have sought carriage under  S (  this provision and what types of programming are being offered in this manner? Under the City  SZ(  of Dallas, Texas v. FCC decision,!Z {O(ԍCity of Dallas, Texas v. FCC, Case No. 9660502, 165 F.3d 341 (5th Cir. January 19, 1999). local governments have the ability, although not the   |obligation, to impose franchise requirements on OVS operators. What types of agreements do   OVS operators have with local government bodies? What types of provisions do such agreements   include (e.g., the payment of franchise fees, establishment of institutional networks)? What effect  S(  0will the City of Dallas, Texas v. FCC decision regarding OVS and franchises have on the growth   of OVS? Will video providers switch from the OVS model to the traditional cable model in light of this decision?(#  S(  X(f) Broadcast Television. We seek information on the role of broadcast television in markets for   ^the delivery of multichannel video programming. We request information regarding the extent   to which broadcast television competes as a distribution medium with MVPDs for audiences or   for advertising revenue. We also seek information on technological, copyright, competitive, and   other issues associated with the distribution of local broadcast signals by video programming   Bdistributors, including those not currently subject to broadcast television signal carriage   requirements. In the last year, broadcast television stations have started to convert to digital   rtelevision ("DTV"). We ask commenters to provide information on the current status of DTV   roperations, the construction of digital television transmission facilities, and other aspects of the   implementation of digital television service that may be useful for preparation of the 1999  S(  hCompetition Report."Z yO!( xԍTo the extent this information is already on file with the Commission, commenters should crossreference other submissions. In particular, we request information regarding the amount and type of   programming being offered on digital channels, including the extent to which DTV channels are   being used for high definition television ("HDTV") and the extent to which they are being used   for multichannel program offerings. In addition, as the transition to DTV broadcasting progresses,   we also seek information on issues affecting DTV consumer equipment such as DTV receivers,   TDTVready cable settop boxes, and other new devices. In particular, we request information  S"(  &relating to sales of currently available DTV consumer equipment, the status of industry efforts to"" ",>(>(IID "   bcreate DTVcable compatibility standards, and other factors affecting consumer adoption of DTV equipment.(#  S(  X(g) Home Video. In 1990, the Commission concluded that home video provides competition to  S`(  cable television, at least with respect to the premium and payperview programming services.#` {O( xԍCompetition, Rate Deregulation and the Commission's Policies Relating to the Provision of Cable Television  {O(Service, MM Docket No. 89600, Report, 5 FCC Rcd 4962, 501920,  109110 (1990).   Subsequently, we have reported on developments in the home video marketplace in our annual  S(  reports. We seek information regarding developments in home video, including the availability   of the recently introduced digital video disk ("DVD") technology. We also seek comment on   whether the availability of home video rentals and sales should be considered competition in   markets for the delivery of video programming given changes in the MVPD marketplace in the intervening years. (#  S (  0X(h) Internet Video. In the 1998 Competition Report, we noted that investment and development   of Internet video services was continuing, although video programming offered by Internet video  S (  still remained less than broadcast quality.r$ $ {O(ԍ1998 Competition Report, 13 FCC Rcd at 2434824350 102105.r We request information on technological   0developments affecting the provision of video services over the Internet. We want to update our   information on the types of video offerings and services available over the Internet. We also   &request comment on whether there have been any changes over the last year that would alter the  S2(  vassessment that Internet video is not a direct competitor to traditional video services at this time.J%2 {O(ԍId. at 24350  105.J What are those changes and how do they affect MVPD competition?(#  S( ` z 12.` ` The 1996 Act increased opportunities for firms not traditionally associated with the  xprovision of video services to enter into the video marketplace. For example, the 1996 Act had several  x.provisions intended to foster LEC entry into video service. It delineated four options for LEC provision  SB( xof video services: OVS; common carriage; radio communications; and cable.h&BH {O*(ԍSee Communications Act 651(a), 47 U.S.C. 571(a).h The 1996 Act also  xrepealed the statutory prohibition against an entity holding attributable interests in a cable system and a  S( xLEC with overlapping service areas.;'$ {Ol( xԍSee Communications Act 652(d), 47 U.S.C. 572(d). Under the statute, there are no restrictions on LECs  x8establishing new cable systems. However, Section 652(a) of the Communications Act prohibits LECs or their  xaffiliates from acquiring directly or indirectly more than a 10% financial interest, or management interest, in any  {O!(cable operator within its telephone service area. See Communications Act 652(a), 47 U.S.C. 572(a). ; In addition, Section 103 of the 1996 Act removed a significant  x*regulatory barrier to the entry of registered public utility holding companies into telecommunications,  S(information services, and video markets by eliminating "line of business" restrictions on such companies.g(  {O%(ԍ1996 Competition Report, 12 FCC Rcd at 44104411 95.g  Sz("z X (,>(>(II\"Ԍ S( `  13.` ` For the 1999 Competition Report, we request information regarding the types of entities  xand companies that now provide video services or plan to provide video services in the near future. In  xparticular, we are interested in LECs, long distance telephone companies, and utility company activities.  xWhat types of video and nonvideo services are such companies providing? What delivery technologies are being used? Is the entity providing video services as part of a joint venture?  S( `  14.` ` Specifically, with respect to LEC plans for video distribution, we request information  S( xabout the current status of their activities and any changes that have occurred since the 1998 Competition  S( x$Report. We seek updated information on franchised cable systems operated by LECs, both within their  x&telephone services areas and outside those regions. To what extent are these LEC cable systems  x.overbuilds of incumbent cable systems' service areas? We note that several LECs, such as Bell Atlantic  xand SBC, have recently announced marketing and distribution agreements with DirecTV. We request  xinformation regarding these agreements and other similar arrangements between LECs and other video  xdistributors, including the services offered and costs. Are video programming services being bundled with  x4telephone and other services? If so, how does the ability to offer bundled services affect the relative competitive position of the LEC?  S\( ` 15.` ` The repeal of the statutory prohibition against LECs providing video services in their  xtelephone service areas was expected to result in LECs competing in video delivery markets, and cable  S ( xDoperators providing local telephone services. In the 1998 Competition Report, we found that the  x*technological convergence that would permit the use of telephone facilities for the provision of video  S( xservices has not yet occurred.c) {O&(ԍ1998 Competition Report, 13 FCC Rcd at 24288 10.c Previously, we noted that the one area where cable operators and  S( x$telephone companies have started to compete is in the provision of Internet access.i*Z {O(ԍId. at 2431324319, 24356 5257, 114. i We also observed  xthat other video programming distributors, such as wireless cable and private cable operators using MMDS  SF( xand SMATV technologies, are providing access to the Internet.X+F {O(ԍId. at 24338, 24342 85, 92.X We seek information, by distribution  xtechnology and firm, concerning the provision of multiple services in local, regional, and national  xgeographic markets. For each entity providing services in addition to video services, we seek a description  xof the video and nonvideo services provided, information on whether the multiple services are provided  x>using, in whole or in part, the same equipment or facilities, and the number of homes passed by, and subscribers to each service as of June 30, 1999.  S.( C.` ` Market Structure and Conditions Affecting Competition  R2` `  1. ,Industry and Market Structure   S( ` 16.` ` As in previous reports, the 1999 Competition Report will provide updated information on  Sf( xlthe structure of, and rivalry in, markets for the delivery of video programming. We also intend to  x`evaluate MVPD market concentration as we have done previously and, thus, seek data regarding current  S ( xnational subscribership levels of all MVPDs, whether these levels have changed since the 1998" ~+,>(>(II"  S( x$Competition Report, and, if so, how significantly.,$ {Oh( xԍThe Commission also sought information regarding national ownership levels in Implementation of Section  {O2( x11(c) of the Cable Television Consumer Protection and Competition Act of 1992: Horizontal Ownership Limits, MM  xHDocket No. 92264, Memorandum Opinion and Order on Reconsideration and Further Notice of Proposed Rulemaking, 13 FCC Rcd 14462 (1998).  We further request information regarding the reach  xor homes passed by each MVPD. We ask commenters to indicate the basis for the numbers provided,  xespecially whether they represent only the number of subscribers or homes passed directly by the MVPD  x$or whether the reported figures include the number of subscribers or homes passed through investments  xin or affiliations with other MVPDs using the same delivery technology. To the extent national  xconcentration has increased or decreased for specific MVPDs, we ask commenters to discuss the reasons  xfor such changes, including whether such changes are the result of merger and acquisition activity,  xfmarketing strategies, or other factors. We also would like to evaluate MVPD service providers in the  xlarger communications marketplace. For this assessment, we solicit data and information that will show  xVhow broadcast television, cable television, telephone, satellite, equipment suppliers and other participants  xcompare in terms of relative size and resources (e.g., revenues) and indicate the extent to which participants have the ability to enter each others' market.  S ( ` 17.` ` We expect to report on cable industry transactions, including information on mergers,  S ( xacquisitions, consolidations, swaps and trades, crossownership, and other structural developments that  xzaffect distributors' delivery of video programming. We seek updates on the status of the mergers and  S ( xtransactions that were described in the 1998 Competition Report as pending or proposed but not  xconsummated. We note that over the last year there have been several large transactions that have  xresulted, or will result once consummated, in the growth of certain MSOs. We request information  xregarding these transactions, including the number of homes passed and the number of subscribers served  xjand their geographic location. We request comment on the effect of such consolidations within the cable  xpindustry and on MVPD competition. We further request information regarding transactions involving noncable MVPDs that might affect competition in the video marketplace.  SD( ` 218.` ` With respect to regional concentration (i.e., "clustering"), for cable and other MVPDs, we  xseek information on the geographic areas served by particular companies. What effects have cable  xindustry consolidation and clustering had on competition? We seek specific, detailed information on  xtransactions involving system acquisitions and trades for each distribution technology and the "geography"  xof the major companies in each technology. Lower fixed costs and the ability to provide service more  xefficiently are considered advantages of clustering. Has clustering facilitated cable operators' ability to  xprovide increased or improved services, such as additional video or nonvideo services, lower prices, or  xbetter customer service? Have consumers benefitted from the clustering of cable systems? If so, how?  S( ` <19.` ` We also are interested in learning whether MVPDs other than cable operators cluster their  xsystems? If so, we seek to identify the companies that have decided to cluster their systems, the delivery  xtechnology used, the number of homes passed in each service area or cluster, and the number of  xHsubscribers. We also request information regarding the effect clustering in such cases has had on the video and nonvideo services offered to consumers and the effect on the prices charged for such services? "< ,,>(>(II"Ԍ R2 &9 ` &9 ԙ` `  , 2.hProgramming Issues   S( ` 20.` ` In the 1999 Competition Report, we will update our information on existing and planned  x8programming services, with particular focus on those programming services that are affiliated with video &9 ` &9   xVprogramming distributors. As in previous reports, we plan to identify national programming services and  xassess the extent to which video programming services are affiliated with cable MSOs. In order to  xfexamine trends in the ownership of programming services, we seek information detailing each MSO's  xownership interests in video programming services, including the amount and type of interest held by each  xfMSO, the date such interest was acquired, and any changes since last year. We also request updated  x"figures for the number of subscribers or nationwide share of subscribers for: (a)independent  xfprogramming networks; (b)national programming networks distributed by cable systems; (c)national  xprogramming networks distributed by noncable MVPDs; (d)national programming networks affiliated with  xnoncable MVPDs distributed by cable systems; and (e)national programming networks affiliated with noncable MVPDs distributed by noncable distribution systems.  S ( ` n21.` ` In the 1999 Competition Report, we again plan to report on recently launched and planned  xprogramming services. We request updated information on recent and planned programming launches.  xWe seek ownership information for each new and planned programming services. We also ask  xcommenters to provide the actual launch date for new services and the currently scheduled launch date  xfor planned services? What types of programming will they offer? To what extent does the success of a new service depend on the tier or package of service on which it is placed by MVPDs?  S( ` 22.` ` We seek information on the various program options offered by each MVPD technology,  xRincluding exclusive program offerings, the number of channels available, and the comparability of the  xprogram options and packages available with each technology. We request data on the extent to which  xlthere are programming networks affiliated with noncable MVPDs and whether such programming  xdnetworks are available to competing MVPDs, including cable operators, on reasonable and  xVnondiscriminatory terms. Are noncable MVPDs producing their own programming or securing exclusive  xrights to certain programming services? What are the costs of producing or securing such programming  xand have noncable MVPDs encountered any difficulty in doing so? We also request comment on whether  xthere are certain programming services (i.e., "marquee" program services) or types of services (e.g., movie,  xsports, or news channels) that an MVPD needs to provide to subscribers in order to be successful? If so, which services or classes of services are needed and to what extent are there substitutable services?  S( ` H23.` ` The 1998 Competition Report included the results of a Commission study of cable  S( xoperators' programming costs.m- {O(ԍ1998 Competition Report, 13 FCC Rcd at 2445724480 Appendix F. m We would like to update the information provided in that study. We ask  x$commenters to provide data and analysis regarding programming costs for cable and other MVPDs. To  xwhat extent have MVPDs' programming costs increased in the last year? What factors contributed to such  xincreases? Are they related to any specific increases (e.g., increased cost of sports programming)? What  xeffect have increased programming costs had on rates, especially on rates for cable service? Are increases  xin programming costs offset by increases in advertising revenues rather than by increases in subscriber rates? "r#Z-,>(>(II "Ԍ S( ` n24.` ` In addition, we are interested in how MVPDs package their programming. To what extent  xdo MVPDs offer or plan to offer consumers discrete programming choices (i.e., service on an "a la carte"  x0or individual channel basis) rather than programming service packages (i.e., tiers of programming  x`services). To what extent do MVPDs offer "minitiers," "lifeline" basic tiers, or digital tiers? How many  x.cable systems and other MVPDs are technically equipped to offer customized programming packages at  xpresent? What would be required to allow operators to offer more customization than is currently  xavailable? What are the technical requirements that permit an MVPD to offer customized service? What  x*are the economic, legal, or other impediments to offering programming services in this manner? Are  xMVPDs offering video and nonvideo services together (i.e., bundled services)? How are the combined  xservices offered and priced? Does the ability to offer bundled services affect the relative competitive position of an MVPD? If so, how?  S ( ` 25.` ` We further solicit information regarding local or regional channels. We ask commenters  xVto identify such programming services by name and programming type and to provide current figures for  x>the number of subscribers or market share of subscribers for: (a)independent regional programming  x"networks; (b)regional programming networks distributed by cable systems; (c)regional cable  xprogramming networks distributed by noncable MVPDs; (d)regional programming networks affiliated  xwith noncable MVPDs distributed by cable systems; and (e)regional programming networks affiliated with  x$noncable MVPDs distributed by noncable distribution systems. To what extent do local cable operators  xor broadcasters own or have some involvement in providing local or regional news or sports channels?  xBWhat technologies are used to distribute these channels? Are additional local and regional services being  xadded due to increased system analog or digital capacity, or are they displacing other existing video  xservices? How has regional clustering among MSOs contributed to the feasibility of regional  xMSO-affiliated programming services? Are local and regional programming services available to unaffiliated MVPDs?  S( ` 26.` ` Moreover, we seek information and comment regarding public, educational, and  xgovernmental ("PEG") access and leased access channels. We specifically request data on the number of  xBchannels being used for each of these purposes and the types of programming offered on such channels.  xWe also seek information on the use of leased access channels, either on a part time or full time basis.  SP( xHas the Commission's 1997 Order_.\P {O( x|ԍImplementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992, Leased  {O( xdCommercial Access, CS Docket No. 9660, Second Report and Order and Second Order on Reconsideration of the First Report and Order, 12 FCC Rcd 5267 (1997)._ amending the leased access rules had any impact on the development  xzof leased access? Do these channels provide any competition to the programming channels under the  xcontrol of the cable operator? In November 1998, the Commission adopted rules to implement Section  S( xt335 of the Communications Act concerning public interest programming obligations for DBS providers.I/\ {Od!( xjԍSee Implementation of Section 25 of the Cable Television and Consumer Protection Act of 1992, Direct  {O."( xBroadcast Satellite Public Interest Obligations, MM Docket No. 9325, Report and Order, 13 FCC Rcd 23254  yO"((1998).I  xzThe rules require DBS licensees to reserve four percent of their channel capacity for "noncommercial  x$programming of an educational or informational nature." Commenters are asked to provide information regarding the current or planned use of these channels. "8/,>(>(II$"Ԍ S( ` V27.` ` The 1998 Competition Report provided information on electronic programming guides  S( x\("EPGs") offered by cable operators and other MVPDs.r0 {OB(ԍ1998 Competition Report, 13 FCC Rcd at 2438524386 181184.r For this year's report, we request updated  x>information on the extent to which MVPDs offer or plan to offer EPGs to their subscribers. We ask  xcommenters to provide data on the number and different types of available electronic programming guides.  xWe are interested in whether each EPG is nationally or locally produced and whether nationally distributed  xEPGs can be customized for local program offerings. We seek information regarding the ownership of  xjnationally distributed EPGs, particularly with respect to their affiliation with MVPDs. To what extent do  x~cable and other MVPD subscribers have access to EPGs that are unaffiliated with their MVPD provider?  xjTo what extent are EPGs that are affiliated with an MVPD available to competing MVPDs? In addition, to what extent are EPGs supported by advertising, subscriber fees, or a combination of both?  SJ ( ` 28.` ` As in previous reports, we will continue to report on the effectiveness of our program  S" ( xaccess,1" Z yO( xPԍ The program access rules also apply to OVS operators and common carriers in the same manner as they apply to cable operators. 47 C.F.R. 76.1004, 76.1507. program carriage and channel occupancy rules that govern the relationships between cable  S ( x~operators and programming providers.2^  {OL( xxԍ 1998 Competition Report, 13 FCC Rcd at 2438924390 191194; 1997 Competition Report, 13 FCC Rcd  {O( xJat 112627 169; 1996 Competition Report, 12 FCC Rcd at 443239 14966; 1995 Competition Report, 11 FCC  {O(Rcd at 213542 15772; 1994 Competition Report, 9 FCC Rcd at 752022, 752836  15859, 17398. We request comment on each of these rules, especially whether  xthe coverage of the program access rules is appropriate and on any other issues of concern to video  xbprogramming providers or MVPDs relating to the availability and distribution of programming. In  xparticular, we seek information on whether there have been any cases of MVPDs being denied  xprogramming when a satellitedelivered service becomes terrestriallydelivered, or being denied  x programming by nonvertically integrated programmers. In addition, to what extent are terrestrially xdelivered programming services owned by, operated by, or affiliated with an MVPD (e.g., cable operator) available to other MVPDs (e.g., another cable operator or delivery technology)?  R2 ` ` 3. ,Technical Advances  Sj(  SB( ` 29.` ` In the 1998 Competition Report, we addressed the deployment of digital technology and  xdiscussed recent activities to promote the commercial availability of the equipment used to access video  S( xprogramming and other services pursuant to the requirements of the 1996 Act.r3 {Ol(ԍ1998 Competition Report, 13 FCC Rcd at 2439124394  195206.r For this year's report,  xBwe seek updated information on system upgrades, particularly with respect to digital technology, and the  xtime frames for completion of these upgrades. We request information regarding MSOs that have created  xdigital tiers. How have cable systems increased their channel capacities by using digital tiers? What types  xof programming are available on digital tiers? Are these tiers used for new programming, digital clones  xof existing analog services, or digital hybrids modeled after an existing analog service with increased  x8capabilities? For individual MSOs, we request data on the number and proportion of: (a) cable systems  xVthat provide digital tiers; (b) households for whom digital cable services are available; and (c) subscribers  xwho actually choose to subscribe to digital services. Are upgrades being undertaken only in specific  xgeographic areas or nationwide? Are upgrades being conducted mainly in response to competitive entry"j 3,>(>(II"  xin the area, or are there other factors that determine where and when a system will be upgraded? Are  xsmall and medium size MSOs upgrading deploying digital technology? How? We also are interested in  xinformation regarding new fiber plant. How much fiber plant have cable operators and other MVPDs added in the last year?  S8( ` (30.` ` Similarly, we seek information on upgrades and the deployment of advanced technologies  xzby MVPDs other than cable operators. We are interested in any investments by noncable MVPDs to  S( xenhance their facilities to provide digital programming and other advanced services. We are interested  xin data on the availability of such services to homes served by the MVPD and the number of homes  xNactually subscribing to such services. We also request information on the feasibility of combining  xdistribution technologies (e.g., DBS and SMATV) and data regarding MVPDs' current use of combined  xdistribution technologies. In addition, we solicit data on estimated rollout or launch dates for new  xtechnologies. Moreover, we are interested in what role, if any, the ability to provide advanced services  xplays in attracting subscribers to video programming services and contributing to the competitiveness of  xan MVPD? In addition, we request information on whether advanced services (i.e., twoway services) are  x4offered separately or in combination with video programming by cable operators and other MVPDs? What is the competitive impact of offering advanced services in combination with video services?  S0( ` 31.` ` Another important aspect of technological development is the deployment of settop boxes,  xintegrated receiver/decoders, or receivers that facilitate or differentiate MVPD service offering. In this  S( xyear's report, we plan to update the information provided in the 1998 Competition Report regarding the  xcertification of settop boxes and their availability through retail outlets. We ask commenters to provide  xinformation regarding the development of specifications for interoperable settop boxes, including updated  x\information on the progress of Cable Television Laboratories, Inc.'s OpenCable) process. To what  x$extent are settop boxes currently available at retail outlets? What types of devices are available at retail  xpand what are their capabilities? What plans are there for increasing the availability of settop boxes in the next year or two?  S( ` ~32.` ` In last year's report, we also observed that the cable industry has begun the widespread  xzdeployment of cable modems and that CableLabs was in the process of finalizing its Data Over Cable  xService Interface Specification ("DOCSIS") intended to provide manufacturers with a set of standards that  S*( xwill enable the production of interoperable cable modems.Z4* {O(ԍId. at 2439324394 204206. Z We seek information regarding the availability  x.DOCSIS compliant modems and the extent to which consumers are buying rather than leasing modems.  xWe further request information on the number of homes capable of receiving cable modem service and how many subscribers have highspeed modems.  Sb( III.PROCEDURAL MATTERS  S:(  S ( `  33.` ` This Notice is issued pursuant to authority contained in Sections 4(i), 4(j), 403, and 628(g)  xof the Communications Act of 1934, as amended. Pursuant to applicable procedures set forth in Sections  x1.415 and 1.419 of the Commission's Rules, 47 C.F.R. 1.415 and 1.419, interested parties may file  S"( xcomments on or before August 6, 1999, and reply comments on or before September 1, 1999. Comments  xmay be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies.  SL$(See Electronic filing of Documents in Rulemaking Proceedings, 63 Fed. Reg. 24,121 (1998)."L$Z4,>(>(II!"Ԍ S( ` ԙ!34.` ` Comments filed through the ECFS can be sent as an electronic file via the Internet to  x. Generally, only one copy of an electronic submission must be files.  xIf multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters  xmust transmit one electronic copy of the comments to each docket or rulemaking number referenced in  xthe caption. In completing the transmittal screen, commenters should include their full name, Postal  xService mailing address, and the applicable docket or rulemaking number. Parties may also submit an  xelectronic comment by Internet email. To get filing instructions for email comments, commenters should  xjsend an email to ecfs@fcc.gov, and should include the following words in the body of the message, "get form