Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, 25345-25352 [2011-10782]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 76, Number 86 (Wednesday, May 4, 2011)]
[Notices]
[Pages 25345-25352]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10782]


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FEDERAL COMMUNICATIONS COMMISSION

[MB Docket No. 07-269; FCC 11-65]


Annual Assessment of the Status of Competition in the Market for 
the Delivery of Video Programming

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: In this document, the Commission is required to report 
annually to Congress on the status of competition in markets for the 
delivery of video programming. This document is soliciting additional 
information from the public that will allow the Commission to enhance 
its analysis of the state of competition in the delivery of video 
programming. Comments and

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data submitted in response to this document in conjunction with 
publicly available information and filings submitted in relevant 
Commission proceedings will be used for a report to Congress.

DATES: Interested parties may file comments on or before June 8, 2011, 
and reply comments on or before July 8, 2011.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Dan Bring, Media Bureau (202) 418-
2164, TTY (202) 418-7172, or e-mail at danny.bring@fcc.gov.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Annual Assessment of the Status of Competition in the Market for 
Diversity of Video Programming, Further Notice of Inquiry (FNOI), in MB 
Docket No. 07-269, FCC-11-65, released April 21, 2011. The complete 
text of the document is available for inspection and copying during 
normal business hours in the FCC Reference Center, 445 12th Street, 
SW., Washington, DC 20554, and may also be purchased from the 
Commission's copy contractor, BCPI, Inc., Portals II, 445 12th Street, 
SW., Washington, DC 20054. Customers may contact BCPI, Inc. at their 
Web site https://www.bcpi.com or call 1-800-378-3160.

Synopsis of Further Notice of Inquiry

    1. Section 628(g) of the Communications Act of 1934, as amended 
(the Act) requires the Commission to report annually on ``the status of 
competition in the market for the market for the delivery of video 
programming.'' This FNOI solicits data, information, and comment on the 
state of competition in the delivery of video programming for the 
Commission's Fourteenth Report (14th Report). Using the information 
collected pursuant to this FNOI, we seek to enhance our analysis of 
competitive conditions, better understand the implications for the 
American consumer, and provide a solid foundation for Commission policy 
making with respect to the delivery of video programming to consumers.
    2. Pursuant to its statutory mandate, in 2009, for the 14th Report, 
the Commission released a Notice of Inquiry, released January 16, 2009, 
to solicit data, information, and comment for 2007 and a Supplemental 
Notice of Inquiry, released April 9, 2009, to request data, information 
and comment for 2008, and 2009, similar to that which had been 
requested for earlier years. However, since that time, the Commission 
has initiated a comprehensive review of the way in which it uses data, 
including data used for its statutory competition reports. In the 
course of that review, we determined that the data submitted in 
response to the notices of inquiry for the 14th Report are insufficient 
to produce an adequate report. We are therefore requesting additional 
data for 2009 and for the first time asking for data for 2010. In 
submitting additional data for 2009 and new data for 2010, to the 
extent that it is not unduly burdensome, we encourage commenters to 
also submit comparable historical data for 2007 and 2008, which will 
facilitate the Commission's analysis of trends.
    3. We intend to adopt a number of changes to our analytic framework 
to ensure that we are collecting and presenting the most useful 
information concerning competition in the video programming market. Of 
particular note, in the 14th Report, we plan to include online video 
distributors (OVDs) for the first time, in light of the growing 
importance of online video distribution to consumers. An OVD is any 
entity that provides video programming by means of the Internet or 
other Internet Protocol (IP) based transmission path provided by a 
person or entity other than the OVD. Under our new analytic framework, 
we first will categorize entities that deliver video programming into 
one of three groups: multichannel video programming distribution 
(MVPDs), broadcast television stations, and OVDs. Second, we will 
examine industry structure, conduct, and performance. Third, we will 
look upstream and downstream to examine the influence of industry 
inputs and consumer behavior on the delivery of video programming. We 
expect to discuss three key upstream industry inputs: Video content 
creators, video content aggregators, and consumer premises equipment. 
We seek comment on whether this proposed analytic framework is a useful 
way for the Commission to assess and report on the status of video 
programming competition.
    4. The data reported in previous reports on the status of 
competition for the delivery of video programming were derived from 
various sources, including data the Commission collects in other 
contexts (e.g., FCC Form 477 and FCC Form 325), comments filed in 
response to notices of inquiry and other Commission proceedings; 
publicly available information from industry associations; company 
filings and news releases; Security and Exchange Commission filings; 
trade and industry publications; research firms' publicly-available 
data; equity analysts' reports; scholarly publications; and vendor 
product releases and white papers. We seek comment on whether there are 
additional data sources available for our analysis. What other sources 
of data, especially quantitative data, should we use to perform a 
comprehensive analysis of the delivery of video programming? Are there 
certain stakeholders that should be reached out to in order to 
diversify the data and further supplement the record? We also ask 
commenters to suggest how we can best use this information to report on 
competition for the delivery of video programming.
    5. In previous Notice of Inquiries, we have requested data as of 
June 30 of the relevant year to monitor trends on an annual basis. To 
continue our time-series analysis, we request data as of June 30, 2009, 
and June 30, 2010. We also recognize that a significant amount of data 
and information are reported on a calendar year basis, and, as such, we 
ask commenters to provide year-end 2009 and year-end 2010, when readily 
available and relevant.
    6. We request data, information, and comment from entities that 
provide delivered video programming directly to consumers. These 
entities include MVPDs, broadcast television stations, and OVDs. We 
also seek data, information, and comment from entities that provide key 
inputs into video programming distribution. These include content 
creators, content aggregators, and manufacturers of consumer premises 
equipment, including equipment that enables consumers to view 
programming on their television sets as well as on other devices (e.g., 
smartphones and tablets). In addition, we request data, information, 
and comment from consumers and consumer groups. We will augment 
reported information with submissions in other Commission proceedings 
and from publicly available sources.

Providers of Delivered Video Programming

Multichannel Video Programming Distributors

    7. MVPD Structure. Previously, we reported separately on many types 
of competitors in the market for the delivery of video programming 
including: incumbent cable operators, direct broadcast satellite (DBS), 
home satellite dishes (HSD), broadband service providers (BSPs), local 
exchange carriers (LECs), open video systems (OVS), electric and gas 
utilities, wireless cable systems, private cable operator

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(PCO) systems, also known as satellite master antenna (SMATV) systems, 
commercial mobile radio service (CMRS) and other wireless providers.
    8. For each type of MVPD, we seek data on the number of MVPD 
providers, the number of households passed, the number of subscribers 
for delivered video programming, and the number of linear channels 
offered. For each type of MVPD, we seek comment on the geographic area 
in which individual providers offer service. In addition, we seek 
comment on the most appropriate unit of measurement for assessing 
geographic coverage. We note that different types of MVPDs may report 
data regarding availability and use that is not standardized to a 
common geographic unit. This greatly hinders our ability to assess the 
competitive alternatives available to households and to identify where 
MVPDs are engaged in head-to-head competition. For purposes of 
determining whether the 70/70 benchmark specified in section 612(g) of 
the Act has been met, in the 13th Report, the Commission determined 
that delivered video subscriber data should be collected on a zip code 
basis. Is it appropriate to use zip code level data to evaluate the 
structure of MVPD markets? Is there a significant difference in the 
data collected if a 5-digit versus a 9-digit zip code is used? We note 
that we collect data from broadband providers using census tracts. We 
seek comment on the feasibility of collecting MVPD data on a census 
tract basis.
    9. Previously, we reported on cable overbuilders and LECs that have 
overbuilt incumbent cable systems. We seek data and information on the 
number of households that are passed by one wireline MVPD, two wireline 
MVPDs, and three or more wireline MVPDs. We wish to identify markets 
and geographic areas where head-to-head wireline competition exists, 
where wireline entry is likely in the near future, and where wireline 
competition once existed but failed. We are particularly interested in 
identifying areas that have access to either Verizon FiOS and AT&T U-
verse.
    10. Certain wireless providers--DBS, wireless cable systems, HSDs 
and PCOs--are included within the statutory definition of MVPDs to the 
extent that they make available for purchase multiple channels of video 
programming. We seek data and information that explain the principal 
factors contributing to DBS's growth in the market for delivery of 
video programming. What factors influence cable subscribers' decisions 
to switch to DBS and vice versa? We request information identifying 
differences between DBS subscribers and cable subscribers. For example, 
are DBS subscribers more likely to reside in rural areas or areas not 
served by cable systems? We seek updated information on the geographic 
characteristics of DBS subscribership. What percentage of households 
cannot receive DBS service because they are not within the line-of-site 
of the satellite signal? We request updated information on the number 
of markets where DBS operators provide local-into-local broadcast 
service. Is DBS penetration higher in areas where local-into-local 
service is available? What effect, if any, does the inability of DBS 
operators to directly provide broadband and voice service along with 
their video service have on competition among MVPDs?
    11. In addition, several operators of wireless cable systems in the 
2.5 GHz band continue to provide multiple channels of video programming 
under the Commission's rules for opting out of the transition of this 
band. We seek comment on how and to what extent these wireless cable 
systems are competing with other MVPDs. Finally, we seek comment on 
other wireless MVPDs such as HSDs and PCOs.
    12. The Commission has not addressed the extent to which wireless 
providers offering video programming to mobile phones and other 
wireless devices should be classified as MVPDs under the Act, and we do 
not intend to do so within this proceeding. For the 14th Report, we 
seek comment on the competitive impact that these wireless providers 
have on MVPDs and on competition in the provision of video programming 
generally. How and to what extent are wireless technologies being used 
to provide video programming today, and what trends should we 
anticipate for the future? To what extent do these services compete 
with the video programming services offered by MVPDs and by other 
providers of video programming?
    13. We seek comment on the appropriate methodology for calculating 
concentration in delivered video services. Should we continue to 
consider MVPDs a separate product market, or are there narrower or 
broader product segments we should consider? What are the appropriate 
geographic markets associated with these product markets (e.g., 
individual households, zip codes, census tracts, cable franchise areas, 
or metropolitan areas)? Instead of assessing concentration on a 
national level as we have done in the past, should we instead follow 
the methodology used in 14th Mobile Wireless Report to assess 
horizontal concentration at a finer level of granularity? In the 14th 
Report, we also propose to identify the geographic areas and number of 
households having a choice of no MVPDs, one MVPD, two MVPDs, three 
MVPDs, four MVPDs, and five or more MVPDs to assess consumer choice at 
the local level. We seek comment on the value of our proposed approach 
and request data, or recommendations for data we can acquire, that will 
enable us to perform this analysis. We invite analysis regarding the 
relationship between horizontal concentration and competition. To what 
extent does horizontal concentration affect price or quality?
    14. In previous reports, we have discussed vertical integration in 
terms of ownership affiliations between cable programming networks and 
cable operators. For our 14th Report, we request data, information, and 
comment on vertical integration between MVPDs and video programming 
networks. We request information on satellite and terrestrially 
delivered national and regional networks. How should we measure such 
vertical integration? For purposes of analyzing vertical integration, 
how should we determine affiliation? Should we use a minimum ownership 
share or apply the attribution rules? Should we simply note which MVPDs 
are integrated with program networks, or should we also measure the 
fraction of programming revenues accounted for by firms affiliated with 
an MVPD? What data should we collect to analyze affiliation and 
revenue? To measure the extent to which MVPDs and cable networks are 
vertically integrated, we seek comment on whether to count a standard 
definition (SD) and a high definition (HD) version of the same 
programming network as one or more networks. We also seek comment on 
how to evaluate multiplexed programming networks.
    15. A number of provisions of the Act and the Commission's rules 
affect MVPD operators in the market for the delivery of video 
programming. These include, for example, regulations governing program 
access, program carriage, must carry, retransmission consent, 
franchising, access to multiple dwelling units, inside wiring, customer 
service, leased access, ownership, and public interest programming. We 
seek comment on the impact of these regulations and other Commission 
rules on MVPD entry and rivalry among MVPDs in markets for the delivery 
of video programming. We also seek comment on specific actions the 
Commission could take to facilitate MVPD entry and rivalry among MVPDs 
and thereby to increase consumer

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choice in the delivery of video programming. In addition, we seek 
comment on any state or local regulations that affect MVPD entry and 
rivalry among MVPDs.
    16. We seek information and comment on non-regulatory conditions 
affecting MVPD entry and rivalry. Do these conditions include supply-
side economies of scale, where large MVPDs can spread fixed costs over 
more subscribers or negotiate lower prices for video content? Do these 
conditions also include expected retaliation, where potential MVPD 
entrants believe incumbents will lower prices to any household 
considering switching to the new MVPD entrant? Does bundling MVPD 
services with broadband, and bundling channels into tiers rather than 
selling channels [agrave] la carte, affect entry and rivalry? Do long-
term contracts with penalties for early termination affect entry and 
rivalry? What other non-regulatory conditions affect MVPD entry and 
rivalry?
    17. MVPD Conduct. What is the capacity being used for public, 
educational, and governmental (PEG) channels by MVPDs? What tier are 
these channels on and is extra equipment required to view them? Are 
there more or fewer PEG channels carried on your systems than last 
year? What data sources are available to track availability of PEG 
programming, and changes to PEG availability?
    18. We seek descriptions of the varied business models and 
strategies used by MVPDs for the delivery of video programming. What 
are key differences among the business models and strategies in terms 
of services offered to consumers? How do providers distinguish their 
delivered video services from their rivals? Are cable and DBS 
comparable services? Is there a discernable distinction between the 
type of service that is delivered at a local level or at a national 
level? Does DBS ``local-into-local'' delivery of broadcast television 
signals make it a closer substitute for cable than it would be 
otherwise? What significance, if any, do distinctions between cable and 
DBS operators have for Commission precedent concluding that the two 
transmission technologies compete in the same MVPD product market? To 
what extent do MVPD offer unique services (e.g., multi-room DVR 
service), more channels, more high definition, or a variety of bundles 
to consumers? How do MVPDs advertise their services to existing and 
potential subscribers? What delivered video services do they feature in 
their advertising?
    19. For each type of MVPD, we seek data on the prices charged for 
delivered video programming. What prices are subscribers paying for 
MVPD service? To what extent do MVPDs use promotional or reduced 
pricing as a competitive strategy? Can consumers easily find the prices 
of MVPD video packages and services on their monthly bill and/or MVPDs' 
Web sites and other promotional materials? To what extent do providers 
of MVPD service use a strategy of reducing prices to attract and retain 
subscribers? To what extent do MVPDs offer new subscribers price 
discounts for an introductory period? Do prices change at the end of 
the introductory period, and, if so, how? Are introductory and long-
term prices listed and fixed, or do providers negotiate with individual 
subscribers over prices before and after introductory periods? Do 
households that subscribe to the same delivered video services, from 
the same provider, in the same geographic area, pay different prices? 
How do bundles of service (i.e., double- or triple-play offerings) 
change the price of delivered video services? To what extent have MVPDs 
been adding linear channels and non-linear VOD programming and raising 
prices as a result? Are there any providers of delivered video 
programming with a business strategy of offering fewer channels of 
programming and lowering prices as a result? Are MVPDs packaging 
programming by offering tiers of programming by genre (e.g., family 
tiers, sports tiers)? If so, how are they priced? We also seek 
information on the competitive strategies of MVPDs in providing VOD 
programming. Specifically, we are interested in learning about any 
competitive issues MVPDs encounter when acquiring VOD content from 
video content aggregators.
    20. We are particularly interested in learning whether an increase 
in the number of MVPD rivals affects pricing strategies. For example, 
do DBS firms price uniformly across large regions or do they, for 
example, charge lower prices (or use different pricing strategies) for 
households that have access to a cable provider than for households 
that do not have access to a cable provider? Do DBS and cable firms 
charge lower prices (or use different pricing strategies) for 
households that have access to more than one wireline MVPD? For its 
Annual Cable Price Survey, the Commission collects price data from a 
sample of cable systems, but does not collect price data for other 
types of MVPDs (e.g., DBS and AT&T U-verse). We seek price data for 
DBS, AT&T U-verse and other MVPDs not included in the Annual Cable 
Price Survey. What additional data sources on MVPD prices are available 
for our 14th Report?
    21. In addition to offering bundles of video with voice and/or 
high-speed Internet, some MVPDs tie video products. We seek data, 
information, and comment on trends regarding the tying of access to 
some online programming to a subscription to an MVPD. For example, 
online programming available through TV Everywhere is available only to 
subscribers of specific MVPDs. In addition, some MVPDs, such as AT&T 
and Comcast, make video programming available on mobile wireless 
networks and mobile devices. We seek comment on these and other 
developments in tying arrangements for video programming delivered over 
different delivery technologies.
    22. We seek data and comment on the provision of local news by 
MVPDs as a competitive strategy in the delivery of video programming 
and the extent to which local news programming is available. What other 
types of local programming do MVPDs offer? What data sources are 
available to help in our analysis of MVPD provision of local news and 
other local programming?
    23. Have horizontal and/or vertical mergers contributed to, or 
provided incentives for, the possible exercise of market power by 
incumbent MVPDs, both downstream to subscribers and upstream to 
creators and aggregators of video content? Has any MVPD acquired 
sufficient market power to impair competition? Has the possible 
exercise of market power by an MVPD adversely affected consumers of 
video programming, such as by increasing price or restricting quantity 
of service available to consumers? Has the possible exercise of market 
power by an MVPD adversely affected creators and aggregators of video 
programming, such as by decreasing the price paid for video 
programming?
    24. MVPD Performance. We seek comment on the information and time-
series data we should collect for the analysis of various MVPD 
performance metrics, including quantity and quality; subscribership and 
penetration rates; financial performance; and investment and 
innovation. Are there any other quantitative or qualitative metrics 
that would enhance our analysis of MVPD performance?
    25. We seek data, information, and comment on trends in the number 
of linear video channels and video on demand (VOD) programs offered by 
MVPDs. Has the number of linear channels and VOD programs available 
increased? What are the most popular MVPD programming packages? 
Describe

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these packages in terms of the total number of analog and SD channels, 
number of HD channels, and number of VOD offerings. What effect has the 
entry of an additional MVPD had on programming choices and quality of 
service? What effect has the growth in OVD services had on the quantity 
and quality of MVPD service?
    26. We seek data and information regarding the number of households 
passed and the number of subscribers and penetration rate for MVPD 
service. We also seek subscription data for the channel lineup packages 
(including international, other specific genres, and premium) and other 
delivered video programming services that MVPDs currently market to 
consumers. What percentage of customers subscribe to these video 
packages and other delivered video programming services? How often do 
consumers switch providers (i.e., what is the level of ``churn'' and is 
it increasing or decreasing)?
    27. We request information on various measures of MVPD financial 
performance, including data on MVPD revenues, cash flows, and margins. 
To the extent possible, we seek five-year time-series data to allow us 
to analyze trends. Specifically, what is the average revenue per MVPD 
subscriber? What are the major sources of video-related revenue for 
MVPDs? What percentage of total revenue is derived from each of these 
sources? What are the major video-related drivers of revenue growth? We 
seek data, information, and comments regarding profitability. What 
metrics and data should we use to measure profitability (e.g., return 
on invested capital, operating margins)? Are there any other 
quantitative or qualitative metrics that would add to our analysis of 
MVPD financial performance?
    28. We seek comment on how investment affects competition among 
MVPDs. How has investment affected competition between MVPDs and other 
providers of delivered video programming? We seek information on 
deployment of next generation MVPD technologies. What MVPD services are 
driving the deployment of new MVPD technologies?

Broadcast Television Stations

    29. Broadcast Television Structure. The Commission already collects 
data on the number of broadcast television stations in each designated 
market area (``DMA'') and ownership of broadcast television stations 
using our CDBS database and data purchased from BIA/Kelsey and The 
Nielsen Company. Is there a non-proprietary geographic area upon which 
the Commission could base its analysis? We seek additional data that 
would help us analyze trends in the number of households that rely 
exclusively on over-the-air broadcast television service rather than 
receiving broadcast programming from an MVPD. In addition to the number 
of households relying on over-the-air broadcast service, we request 
information regarding any demographic characteristics of such 
households. How many households routinely view broadcast programming 
over-the-air in addition to subscribing to an MVPD?
    30. The Commission already collects data that we can use to assess 
the horizontal structure of the broadcast television stations, 
including the number of stations in each DMA, and the ownership of each 
station. We seek comment on how to best report this information in 
order to assess horizontal concentration.
    31. We seek data on the vertical structure of the broadcast 
television. How many broadcast television stations, nationally and 
within each DMA, are vertically integrated with a broadcast network or 
a cable network? We seek comment on how to best report this information 
in order to assess vertical integration.
    32. We note that the Commission's spectrum allocation policies, 
licensing policies, and spectrum interference rules affect the 
structure of broadcast television by limiting the number of stations 
that can be located in a geographic area. We seek comment on the effect 
of these policies and rules on entry and rivalry in broadcast 
television. Commission rules limit the number of broadcast television 
stations an entity can own in a DMA and also limit the national 
audience reach of commonly owned broadcast television stations. We seek 
data, information, and comment on the effect of ownership limits on 
entry and rivalry in broadcast television. Does the ability to provide 
more than one programming stream as a result of the digital transition 
increase the competitiveness of broadcast stations? What other 
regulations affect entry and rivalry of broadcast television stations? 
We ask commenters to provide data and examples for each regulation that 
effects entry and rivalry.
    33. We seek information and comment on non-regulatory conditions 
affecting entry and rivalry. For example, are there supply-side 
economies of scale that enable commonly owned broadcast television 
stations to spread fixed costs over greater audiences? Are there 
demand-side economies of scale that enable commonly owned broadcast 
television stations to negotiate lower prices for video programming? We 
invite analysis of the relationship between the advertising market and 
entry and exit in broadcast television. What other non-regulatory 
conditions influence entry and rivalry? To what extent do they 
influence entry and rivalry? Does the ability to offer multiple 
programming streams since the digital transition enhance the ability of 
broadcasters to compete against MVPDs? Do broadcast television 
stations, collaborating in conjunction with OVDs or other media, have 
an increased ability to compete with MVPDs?
    34. Broadcast Television Conduct. We seek data, information, and 
comment on the use of multiple linear program streams as a business 
strategy to enhance a broadcaster's competitive position in the 
delivery of video programming. What types of programming are 
broadcasters carrying on their multiple streams? To what extent are 
broadcasters providing multiple linear streams of video programming to 
attract viewers to over-the-air video service and away from 
subscription MVPD service? Digital television allows broadcasters to 
use part of their digital bandwidth for subscription video, 
datacasting, and other pay services as long as they maintain their 
primary broadcast television service. Do broadcasters have business 
plans to combine and transition some of their digital capacity into a 
subscription service or to lease a portion of their digital spectrum 
capacity to others for a subscription service? Are broadcasters using 
HD programming as a strategy to attract viewers? Has digital 
transmission benefited television broadcasters? We seek comment on 
specific benefits that have accrued to broadcasters as a result of the 
transition. Has the transition benefited households that rely solely on 
over-the-air television service? If so, we seek information on specific 
advantages that have accrued to these households. Has the digital 
transition presented particular difficulties for broadcasters or 
viewers?
    35. We seek data, information, and comment on the business 
strategies of broadcast television stations as they confront changes in 
the advertising market, both long-term changes and recent changes 
brought on by the economic downturn. We also seek information regarding 
any business strategies to grow revenue through retransmission consent 
fees paid by MVPDs to broadcast stations for the rights to carry their 
stations. We seek data on trends in prices for spot and local 
advertising on broadcast television

[[Page 25350]]

stations. What prices (per subscriber) are broadcast stations receiving 
from MVPDs for retransmission consent?
    36. To what extent is local broadcast programming available online? 
How does placing video content online benefit broadcasters? To what 
extent are broadcast stations tying retransmission consent negotiations 
with MVPDs for linear programming to online programming?
    37. We seek data and comment on the provision of local news as a 
competitive strategy in the delivery of video programming and the 
extent to which local news programming is available. We seek comment on 
the strategies broadcast television stations use to remain the primary 
distributor of broadcast television network programming, as well as the 
strategies and partnerships they use to deliver news online. Does the 
ability to distribute programming online lead some broadcasters to 
increase their investment in news and information programming or 
provide news to consumers that might not otherwise be available?
    38. What competitive strategies do broadcast television stations 
use to distinguish themselves from other broadcast television stations? 
For example, is there local programming other than news used to enhance 
the competitive position of broadcast stations? We seek data, 
information, and comment on these other business strategies broadcast 
television stations use to compete in the delivery of video 
programming.
    39. We seek data, information, and comment on the use of horizontal 
and vertical mergers to improve the competitive position of broadcast 
television stations in the delivery of video programming. We seek 
comment on whether commonly owned stations have a competitive advantage 
in the delivery of video programming. Do joint sales agreements (JSAs), 
local marketing agreements (LMAs) and shared services agreements (SSAs) 
have an effect on independent stations to remain competitive? Does 
business strategy favor group ownership within a DMA to increase 
advertising revenue? Does group ownership across DMAs lower prices for 
video content? Are broadcast television stations that are vertically 
integrated with a broadcast television network better able to compete 
in the delivery of video programming?
    40. Broadcast Television Performance. We seek information and time-
series data for the analysis of various performance metrics for 
broadcast television. These metrics should include the quantity and 
quality of broadcast television station programming, viewership from 
over-the-air, viewership from carriage on MVPDs, prices of advertising, 
revenue from advertising, revenue from retransmission consent fees, 
other revenue, investment and innovation, and rate of return/
profitability.
    41. We seek data, information, and comment on the impact of the 
transition to digital television on the number of linear broadcast 
television channels available in each DMA, counting both primary 
stations and additional multicast programming streams. How many 
broadcast television stations offer video content in HD? What 
percentage of their programming is in HD?
    42. We seek data, information, and comment on the viewership of 
broadcast television stations both from over-the-air reception and 
carriage by MVPDs. What is the trend in total viewership in total 
household terms? With respect to linear programming, what is the trend 
in the share of the total audience that broadcast television stations 
receive relative to the share received by cable networks carried by 
MVPDs. Some broadcast stations also place some of their programming 
online. How many households view broadcast television stations online? 
What share of online viewership are broadcasters receiving?
    43. We seek data on broadcast television station revenues, cash 
flows, and margins. To the extent possible, we seek five-year time-
series data to allow us to analyze trends. Specifically, what is the 
average revenue earned per broadcast television station? We realize 
that some broadcast stations are integrated with other businesses but 
are only interested in financial data related directly to the delivered 
video programming of the broadcast television station, such as the sale 
of advertising tied to the video programming and retransmission consent 
fees. What are the major drivers of revenue growth? We also seek data 
regarding the profitability of broadcast television stations. What 
metrics and data should we use to measure profitability (e.g., return 
on invested capital, operating margins)? Are there any other 
quantitative or qualitative metrics that would add to our analysis of 
the financial performance of the broadcast television station group?
    44. We seek comment on how investment in digital television affects 
competition among broadcast television stations and with the larger 
market for the delivery of video programming. We seek data on broadcast 
television station investment in digital television, the innovations 
related to this investment, and the financial returns on this 
investment. What has investment in digital television done to enhance 
the competitive position of broadcast television stations in the 
delivery of video programming?

Online Video Distributors

    45. OVD Structure. Over the time period we plan to cover in the 
14th Report--2007 to 2010--OVDs have made an increasing amount of video 
programming available to consumers over the Internet. We request, data, 
information, and comment on the number and size of OVDs. What data 
sources are available for analysis of the structure of OVDs? We also 
seek comment on whether individual OVDs view other OVDs as competitors. 
In addition, to what extent do OVDs compete with MVPDs and/or broadcast 
television stations?
    46. OVD Conduct. What business models and competitive strategies do 
OVDs use to compete in the delivery of video programming? What 
challenges do OVDs face? Do OVDs highlight the availability of 
increasing amounts of online video to attract more viewers and/or 
subscribers? What media do OVDs use to advertise their service? To what 
extent is OVD service a substitute for MVPD service? Or, alternatively, 
is it a complement to MVPD service? How is OVD service advertised? Do 
OVDs that are not MVPDs have a different business strategy for 
attracting subscribers than OVDs that are also MVPDs? We seek data, 
information, and comment on business strategies that tie OVD service to 
subscription to MVPD service. We seek information on the extent to 
which OVDs rely on advertising, subscription fees, per-program fees or 
other sources of revenue, including information on the use of 
subscription fees. We also seek information on the prices for the 
programs or the subscriptions charged by OVDs that sell access to video 
content over the Internet. To what extent do OVDs rely on a combination 
of advertising and per-program, subscription, or other fees? Is there a 
trend among OVDs toward greater reliance on charging consumers?
    47. OVD Performance. We seek comment on the total amount of video 
programming available online and the extent to which consumers are 
viewing video programming offered by OVDs. Has the entry of OVDs in the 
marketplace resulted in reduced viewership of video programming from 
MVPDs and broadcast television stations? What metrics should we use to 
compare OVD viewership, MVPD viewership, and broadcast television 
station viewership? In what ways have

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OVDs improved the quantity and the quality of their video programming 
since our 13th Report? Do OVDs provide local news or other local 
programming? What financial returns do OVDs earn on their investments? 
What data are available and what metrics should we use to analyze the 
extent to which OVDs' services are substitute or a complement to MVPD 
service?

Geographic Availability

    48. Rural Versus Urban. As in previous reports, we expect to 
compare competition in the market for the delivery of video in rural 
markets with that in urban markets. For the purpose of measuring the 
availability of and competition among providers of video programming, 
how should we define ``rural'' and ``urban''?
    49. We seek data, information, and comment to analyze whether there 
are differences in the delivered video programming between rural and 
urban areas and the factors that affect these differences. How does 
competition differ between rural and urban areas? What are the 
demographic, geographic, and economic factors that drive differences in 
competition between rural and urban markets? Which, if any, delivered 
video programming services are most often lacking in rural areas? How 
does access to broadcast television stations differ between rural and 
urban areas? We recognize that most households have access to two DBS 
services--DIRECTV and DISH Network--that provide national service. How 
does access to other MVPD service differ between rural and urban areas? 
To what extent do rural areas lack access to a cable system or other 
wireline MVPD? How many households lack access to a cable system? What 
percentage of these households are in rural areas? Do rural areas have 
less access to high-speed Internet service and, therefore, less access 
to OVD services relative to urban areas?
    50. We seek information, data, and comment regarding the 
differences in the availability and price of delivered video service in 
rural areas relative to urban areas. When cable service is available in 
rural areas, are prices higher or quality lower relative to urban 
markets? Are there examples of rural areas that receive delivered video 
programming service similar in price and quality to those found in 
urban areas?
    51. Alaska and Hawaii. We seek information and comment regarding 
MVPD and OVD service in Alaska and Hawaii. We are interested in how the 
availability of MVPD and OVD services in these states differs from 
those that are available in the other states. Do consumers in Alaska 
and Hawaii have the same or similar access to MVPD, broadcast, and OVD 
services as consumers in the other 48 states? Are prices for 
subscription to MVPDs higher than those found in other states? Is the 
same quantity of video programming available and is it offered in 
programming packages similar to the services in other states? We 
request updated information on the delivery of video programming to 
consumers in Alaska and Hawaii relative to that provided in other 
states.

Key Industry Inputs

    52. Video Content Creators. Because MVPDs and broadcast television 
stations increasingly negotiate directly with content creators for non-
linear forms of content distribution, including video on demand and 
online video distribution, we plan to look more closely at content 
creators in our 14th Report. Creators of video programming include 
major studios that are subsidiaries of entertainment conglomerates and 
independent companies. We request data, information, and comment that 
will help us analyze the number and size of content creators and the 
evolving relationship between content creators and the firms that 
distribute video content. Are there barriers for independent production 
entities to access the audiences of all delivery systems (including 
broadcast and online)--not just MVPDs? In addition, we are interested 
in information regarding entities, local and national, that create 
news, public interest programming and/or sports and the relationships 
between the content creators and those that deliver video programming.
    53. We seek data, information, and comment on the business 
strategies of content creators regarding the selling and licensing of 
video content and the effect on video distribution. How have changes in 
the creation of content affected the distribution of video programming? 
Have changes in content creation increased investment in the 
distribution of video programming? Have changes in the business 
strategies of content creators regarding the type of video content 
created, the timing of release of specific video content through the 
various delivery systems (i.e., the order of delivery technologies used 
to distribute the programming, a process also called windowing), and 
the prices charged for content in each window affected competition 
between distributors of video programming? Have there been significant 
changes in the bargaining power between content creators and 
distributors of video programming? How do the windowing strategies of 
video content creators affect the distribution of video programming 
through VOD and over the Internet? Have business strategies changed for 
creators of news programming, especially local news programming? Are 
there specific strategies that affect the delivery of sports 
programming that differ from those of creators of other types of video 
content? We seek data, information, and comment to analyze each of 
these issues.
    54. Video Content Aggregators. We plan to continue to look at 
traditional video programming and seek data, information, and comment 
regarding the impact of changes in the aggregation of content on the 
delivery of video programming. Video content aggregators are entities 
that combine video content into packages of video programming for 
distribution. Have changes in the business models of content 
aggregators affected competition among distributors of video 
programming? Have there been significant changes in the bargaining 
power between content aggregators and distributors of video 
programming? Has entry by new video content aggregators or increased 
programming channels offered by existing content aggregators lead to an 
expanded number of channels offered by MVPDs or additional programming 
offered by broadcast television stations on their multiple digital 
streams? Have changes in the business models of content aggregators 
affected the growth of OVDs? Are existing video content aggregators 
creating additional programming networks and packages, or are new 
aggregators creating video programming packages? What factors do video 
content aggregators, including broadcast networks, cable networks, and 
broadcast stations, consider when deciding the terms of distributing 
their content?
    55. Consumer Premises Equipment. In the 14th Report, we plan to 
discuss the devices--current and forthcoming--that facilitate the 
delivery of video programming and examine how these inputs affect 
competition in the delivery of video programming. We request 
information on developments relating to consumer premises equipment and 
services that provide options to consumers for viewing video 
programming. Further, we seek information on the retail market for set-
top boxes, including set-top boxes that do not use CableCARDs such as 
those sold at retail for use with DBS services. What are the challenges 
that manufacturers face in investing and innovating in consumer 
equipment? Can

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consumers easily compare prices to lease smart video devices from their 
MVPDs and/or purchase them in retail outlets? Therefore, we request 
information regarding the different types of consumer premises 
equipment--both MVPD supplied and non-MVPD supplied--used to access 
video content and the capabilities thereof. We also seek information 
and comment on how competition among video programming distributors is 
affected by developments related to consumer premises equipment, such 
as electronic programming guides, two-way functionality, and CableCARDs 
that permit the reception of secured programming services without a 
leased set-top box, and developments in the regulatory environment for 
consumer premises equipment. We also request information regarding 
digital rights management technology and issues that affect the 
availability of video programming to consumers. We seek information to 
analyze the relationships between MVPDs that deliver video programming 
and manufacturers of consumer premises equipment, especially cable and 
DBS set-top boxes and devices that enable consumers to move video 
delivered over the Internet to televisions.

Consumer Behavior

    56. We seek information about how trends in consumer behavior 
affect the products and services of providers of delivered video 
programming. We seek data on trends that compare consumer viewing of 
regularly scheduled video programming with viewing of time-shifted 
programming using DVRs, VOD content, and OVD content. Are consumers who 
are not ``cutting'' the MVPD cord ``shaving'' their subscriptions by, 
for example, substituting Netflix for premium channels or VOD services? 
Do consumers view OVD service in conjunction with over-the-air 
broadcast television service as a potential substitute for MVPD 
service?
    57. We seek data, information, and comment on the development of 
consumer information sources for delivered video programming services 
and equipment. Do consumers have sufficient information to compare the 
prices, services, and equipment that video distributors offer? What do 
consumers consider most important when choosing a provider? What do 
consumers say are the main reasons for switching providers (e.g., 
price, quantity, quality)?

Procedural Matters

    58. Ex Parte Rules. There are no ex parte or disclosure 
requirements applicable to this proceeding pursuant to 47 CFR 
1.204(b)(1).
    59. Comment Information. Pursuant to Sec. Sec.  1.415 and 1.419 of 
the Commission's rules, 47 CFR 1.415, 1.419, interested parties may 
file comments and reply comments on or before the dates indicated on 
the first page of this document. Comments may be filed using: (1) The 
Commission's Electronic Comment Filing System (ECFS), (2) the Federal 
Government's eRulemaking Portal, or (3) by filing paper copies. See 
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 
(1998).
     Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/ or the Federal eRulemaking Portal: https://www.regulations.gov.
     For ECFS filers, if multiple docket or rulemaking numbers 
appear in the caption of this proceeding, filers must transmit one 
electronic copy of the comments for each docket or rulemaking number 
referenced in the caption. In completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing address, 
and the applicable docket or rulemaking number. Parties may also submit 
an electronic comment by Internet e-mail. To get filing instructions, 
filers should send an e-mail to ecfs@fcc.gov, and include the following 
words in the body of the message ``get form.'' A Sample form and 
directions will be sent in response.
     Paper Filers: Parties who choose to file by paper must 
file an original and four copies of each filing. If more than one 
docket or rulemaking number appears in the caption of this proceeding, 
filers must submit two additional copies for each additional docket or 
rulemaking number.
    Filings can be sent by hand or messenger delivery, by commercial 
overnight courier, or by first-class or overnight U.S. Postal Service 
mail. All filings must be addressed to the Commission's Secretary, 
Office of the Secretary, Federal Communications Commission.
     All hand-delivered or messenger-delivered paper filings 
for the Commission's Secretary must be delivered to FCC Headquarters at 
445 12th St., SW, Room TW-A325, Washington, DC 20554. The filing hours 
are 8 a.m. to 7 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes must be disposed of before 
entering the building.
     Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9300 East Hampton 
Drive, Capitol Heights, MD 20743.
     U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 445 12th Street, SW., Washington DC 20554.
     People with Disabilities: Contact the FCC to request 
materials in accessible formats for people with disabilities (braille, 
large print, electronic files, audio format), send an e-mail to 
fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 
202-418-0530 (voice), 202-418-0432 (TTY).

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2011-10782 Filed 5-3-11; 8:45 am]
BILLING CODE 6712-01-P