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Split view on cable competition - Broadcasting & Cable

Split view on cable competition

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Depending on your point of view, cable is either an entrenched monopoly
dominating TV markets more each year or a beleaguered sector of the TV industry
fighting a rearguard action to simply slow the erosion of its markets.

Commenting on a recent Federal Communications Commission report on the state
of competition in the video-delivery market, the cable industry and its critics
painted wildly diverging views of the business.

In an effort to squelch calls for the resurrection of rate regulation and the
imposition of new restrictions on the sector, the National Cable &
Telecommunications industry Tuesday said commission statistics show "steady,
unrelenting growth of competition."

The most telling statistic, according to the NCTA: Cable's share of pay TV
subscribers has dropped from 95 percent in 1992 to 76 percent today.

Satellite provider EchoStar Communications Corp., however, countered that
cable consolidation, regional clustering of local systems, bundling of broadband
Internet service with traditional TV offerings and instances of cable
conglomerates refusing to sell some programming to competitors is allowing cable
to "systematically maintain their immense market power."

The market power has allowed cable-subscription prices to climb 45 percent
since rates were deregulated in 1996. EchoStar also cited the specter of
increasing cable concentration as a reason for the feds to approve the company's
takeover of sole direct-broadcast satellite rival DirecTV Inc. "Only through the combined resources of
the two major DBS providers will the DBS industry be able to compete effectively
in the future against cable," the company said.

Consumer groups and Senate Commerce Committee chairman Ernest Hollings (D-S.C.) have called for reregulation of cable rates.

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