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CONTACT: Amy Smorodin
January 30, 2009
(202) 289-8928
Video Competition Negates Need for FCC Intervention
Even Belated Video Competition Report Shows Greater Consumer Choice

WASHINGTON D.C. - Conclusions in the 2006 annual video competition report released by the Federal Communications Commission undercut the rationale for additional regulation of cable providers, states PFF Senior Fellow Barbara Esbin in "A Tale of Two Reports," released today by The Progress & Freedom Foundation.  Although the data used in the report is 30 months out-of-date, she explains, it illustrates a steady trend of increasing competition among video service providers and increasing sources of diverse information and video programming.

Esbin, Director of PFF's Center for Communications and Competition Policy, concludes the most important finding of the recently released Thirteenth Annual Video Competition Report "is the continuation of trends discussed in previous reports: cable competition is growing, consumer choice of diverse sources of video programming and information is increasing and cable operators are offering an ever-increasing array of video and non-video services."  These results, explains the author, undermine the arguments for both increased regulation and sustaining the current level of regulation of cable in two ways.    First, the report indicates even as of June 2006, cable penetration is unlikely to have surpassed 70% of the market, the threshold in which cable would be open to further regulation.  Second, the report reveals that as of that date, the vertical integration of video programming and distribution channels was decreasing, and the video market was successfully providing consumers with a "diversity of information sources," included new distribution methods, such as the Internet.  More importantly, recent reports from other sources indicate that these trend lines have not only continued, but are accelerating.

Esbin laments the 14 month delay in the release of the Thirteenth Annual Video Competition Report, stating it kept vital statistics about the video marketplace out of the hands of both Congress and consumers.  She concludes, "Had the FCC been up to date with its annual video competition reports, it might have discovered that the answer to... [the perceived twin problems of] cable pricing and the inability of consumers to buy programming on a per-channel basis -- are already being addressed through technological innovation and market forces without the expenditure of a single "full time equivalent" federal employee man or woman hour."

"A Tale of Two Reports" is available on the PFF website.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation