Inside The Beltway 09/13/12

In a filing earlier this week, the American Cable Association (ACA) asked the Federal Communications Commission to identify in its next video competition report to Congress the number of small cable systems that have shut down operations in the past year, and then investigate the cause and context, including to what extent higher programming and infrastructure fees drove the decision to terminate multichannel video programming service in a particular community. According to ACA President and CEO Matthew M. Polka, “The FCC has data showing that the number of cable systems has significantly decreased over the past five years. ACA believes that this trend reveals significant problems in the market for the delivery of video programming, particularly for smaller multichannel video programming distributors serving smaller markets and rural areas. The FCC should be reporting data indicating that the number of cable systems nationwide are decreasing, and small cable systems are disappearing from communities at a steady if not increasing rate and assessing the likely harm to consumers and possible causes, both regulatory and non-regulatory.” Based on past FCC records and reports, ACA calculated that since October 2005, the number of cable systems has declined by 26 percent (from 7,208 to 5,312) and that for systems with fewer than 10,000 subscribers, the percentage drop in the number of systems was even greater. ACA acknowledges that the FCC’s data likely reflected, in part, the loss of systems due to headend consolidation or the interconnection of multiple headends to achieve operating efficiencies. ACA describes this as “important data” concerning one of the three main types of providers in the video distribution market, and they should be included in the FCC’s next report to give a complete picture of the state of video competition.