Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  | MM Docket No. 92-266         |
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| Implementation of Section 3 of   | ** |                              |
| the Cable Television Consumer    |    |                              |
| Protection and Competition Act   | *  |                              |
| of 1992                          | *) |                              |
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| Statistical Report on Average    |    |                              |
| Rates for Basic Service, Cable   | *  |                              |
| Programming Service, and         | *) |                              |
| Equipment                        | ** |                              |
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**REPORT ON CABLE INDUSTRY PRICES**

> **Adopted: January 14, 2005 Released: February 4, 2005**
>
> By the Commission: Commissioners Copps and Adelstein concurring and
> issuing a joint statement. 

# Introduction

1.  Section 623(k) of the Communications Act, as amended by the Cable
    Television Consumer Protection and Competition Act of 1992 ("1992
    Cable Act"),[^1] requires the Commission to publish a statistical
    report on cable prices, or more specifically, average rates for the
    delivery of basic cable service, cable programming service, and
    equipment.[^2] The Act also requires the Commission to compare the
    average rates of cable operators subject to effective competition
    with those of operators not subject to effective competition. This
    2004 Report is issued in compliance with those statutory
    obligations.

2.  The information and analysis provided in this Report are based on
    the Commission's 2004 Survey of cable industry prices
    ("Survey").[^3] The Survey requested data from cable operators
    pertaining to monthly cable rates in communities selected as part of
    a random sample. We requested data as of January 1, 2004, and
    limited amounts of data as of January 1, 2003, and January 1, 2002.
    The Survey enables the Commission to examine the change in cable
    rates nationwide. In addition, the Survey enables the Commission to
    compare cable rates charged by cable operators in two groups of
    cable communities: (1) communities where operators do not face
    effective competition (herein referred to as the "noncompetitive
    group"); and (2) communities where operators are deemed to face
    effective competition (the "competitive group"). The competitive
    group is limited to those communities where a cable operator has
    sought and obtained a Commission finding of effective
    competition.[^4]

3.  We rely on the Commission's formal legal decisions regarding
    effective competition, based on the statutory definition of that
    term, in order to compile our list of communities in which cable
    operators face effective competition. Because of this, we are unable
    to take into account those areas of the country where there may be
    sufficient competition to reach effective competition status, but no
    finding to that effect has been made. For example, there may be
    areas where sufficient direct broadcast satellite (DBS) competition
    exists to support a finding of effective competition, but if no
    formal ruling to that effect has been requested or obtained, we
    cannot include those areas in our list of communities facing
    effective competition.[^5] We also are unable to take into account
    situations where a finding of effective competition has been made
    but, although the criteria for effective competition no longer are
    satisfied, the local franchise authority has not filed for
    recertification.

4.  To compare average monthly rates of cable operators serving
    noncompetitive and competitive communities, we selected a sample
    from each group. Further, to gain more precise estimates, we divided
    the competitive group by type of cable "overbuild."[^6] We also
    included a category for communities in which a finding of effective
    competition was based on the low-penetration test. We selected a
    portion of the competitive sample from each subgroup. The
    competitive subgroups are: (1) wireline overbuilds (cable
    subscribers in this subgroup represent an estimated 39 percent of
    the total in the competitive group); (2) DBS (30 percent of
    subscribers); (3) wireless overbuild (27 percent of subscribers);
    and (4) findings of effective competition through the low
    penetration test (4 percent of subscribers). The wireline overbuild
    subgroup contains the incumbent cable operator as well as the rival
    cable operator. The other subgroups include only the incumbent cable
    operator because DBS and wireless operators are not part of the
    Survey, and because the low-penetration test depends on market share
    rather than the existence of a rival operator.

5.  The Survey collected information about monthly cable rates for the
    basic service tier and the major cable programming service tier
    ("expanded basic service").[^7] Basic service includes local
    broadcast stations and any public, educational and governmental
    (PEG) access channels. In addition, cable operators usually elect to
    include a few additional local or satellite channels in basic
    service.[^8] Expanded basic service consists of channels other than
    basic service, premium, pay-per-view including video on demand, or
    mini-tier channels. Subscribers must purchase basic service in order
    to subscribe to expanded basic service. About 90 percent of cable
    subscribers take both basic and expanded basic services; the
    remaining 10 percent take basic service only. A small percentage of
    cable operators offer basic service but not expanded basic service,
    locating all cable programming services on the basic service tier
    except for premium and pay-per-view channels. Finally, basic and
    expanded basic services refer predominately to analog service, but
    may be digital when the cable system is a fully-digital system.

6.  In addition to monthly cable rates for basic and expanded basic
    services, the Survey sought information on number of channels in
    order to determine how much subscribers pay on a per channel basis.
    The Survey also collected information on monthly charges for
    equipment, consisting of a television set-top converter and remote
    control. The Survey, further, gathered information at the cable
    system level on other factors that may affect cable rates and
    competition in the multi-channel video programming distribution
    market, including: (1) number of cable subscribers; (2) number of
    digital cable service subscribers; (3) number of cable Internet
    access subscribers; (4) number of telephony subscribers; (5) cable
    system capacity in MHz; (6) cable programming revenues; (7) cable
    programming costs; and (8) system operating costs. Below, we
    summarize the major findings of the Survey.

# Summary of findings

7.  *Average rate changes for all communities.* The Survey shows that
    the average monthly rate for cable service increased by 5.4 percent,
    from \$42.99 to \$45.32, over the 12 months ending January 1, 2004.
    This increase is lower than the 7.8 percent increase for the year
    ending January 1, 2003, and the 7.5 percent 5-year average annual
    rate of change over the period beginning July 1, 1998 and ending on
    January 1, 2004.[^9] The average number of channels on basic and
    expanded basic increased from 67.5 to 70.3 channels, a 4.1 percent
    increase for the year ending January 1, 2004, which is lower than
    the 6.3 percent 5-year average. To account for changes in the number
    of channels, we calculated average price per channel.[^10] The price
    per channel increased by 1.2 percent, from 65.2 cents per channel to
    66.0 cents per channel, compared with the 5-year average of 0.4
    percent.

8.  The monthly cable rate consists of both programming and equipment
    charges and the measured annual rate of increase reflects individual
    changes in these components. Examining the overall 5.4 percent
    increase as a breakdown of its components, we observe: (1) a 5.4
    percent increase in the programming charge, from \$38.95 to \$41.04,
    which is lower than the 7.4 percent 5-year average; and (2) a 5.9
    percent increase in the equipment charge, from \$4.04 to \$4.28,
    which is lower than the 9.1 percent 5-year average. Regarding
    individual programming tiers, the charge for basic service increased
    2.6 percent, from \$13.45 to \$13.80 (compared with a 5-year average
    of 2.6 percent), and the expanded basic charge increased 6.8
    percent, from \$25.50 to \$27.24 (compared with a 5-year average of
    10.4 percent).

9.  The Bureau of Labor Statistics ("BLS") publishes a Consumer Price
    Index ("CPI") that measures price inflation related to all goods and
    services for all urban consumers.[^11] By this measure, inflation
    increased by 1.1 percent over the 12 months ending January 2004, and
    by an average of 2.1 percent over the past five years. BLS also
    publishes price indices for many components of the overall CPI,
    including a price index for a basket of cable services ("cable
    CPI").[^12] The cable CPI increased by 3.8 percent over the year
    ending January 2004, and by an average of 4.6 percent over the past
    five years. Because it covers a different mix of services, the cable
    CPI cannot be compared directly with the results of our Survey.[^13]

10. *Average rate changes for noncompetitive communities.* For the
    noncompetitive group (communities without an effective competition
    finding), the monthly cable rate increased by 5.6 percent, from
    \$43.14 to \$45.56, for the year ending January 1, 2004.[^14] This
    increase is lower than the increases of 7.9 percent and 7.5 percent,
    respectively, for the prior year and the 5-year average. The number
    of channels on basic and expanded basic increased from 67.3 to 70.1
    channels, a 4.2 percent increase for the year ending January 1,
    2004, which is lower than the 6.3 percent 5-year average. The price
    per channel increased by 1.2 percent, from 65.7 cents per channel to
    66.5 cents per channel, compared with a 5-year average increase of
    0.4 percent.

11. *Average rate changes for competitive communities.* For the
    competitive group (the communities where effective competition was
    found to be present), the monthly cable rate increased by 3.6
    percent, from \$40.99 to \$42.48, for the year ending January
    1, 2004. This increase is lower than the 5.3 percent annual increase
    for the prior year and the 7.4 percent 5-year average. The number of
    channels on basic and expanded basic increased from 69.7 to 72.5
    channels, a 4.0 percent increase for the year ending January 1,
    2004, compared with the 5.5 percent 5-year average. The monthly
    price per channel decreased from 60.1 cents per channel to 59.9
    cents per channel, a decrease of 0.3 percent, compared with the
    5-year average increase of 0.9 percent.

12. *Competitive differential.* The competitive differential in monthly
    cable rates (the percentage difference between the noncompetitive
    group and the competitive group) was 7.3 percent on January 1, 2004.
    The competitive differential in the price per channel was 11.0
    percent. The degree of difference varied by competitive subgroup.
    The highest differentials were associated with wireline overbuild
    competition. For communities in this subgroup, the monthly cable
    rate and price per channel were, respectively, 15.7 percent lower
    and 27.2 percent lower than those averages for the noncompetitive
    group.

13. Section III discusses the survey methodology. Section IV describes
    survey findings and provides summary tables. These findings include
    average monthly cable rates and other averages as of January 1,
    2004, as well as the annual rate of change in those averages.
    Section V presents additional analysis. Section VI presents our
    conclusions. Attachment 1 provides details on the communities in
    each sample group and subgroup. Other detailed statistics can be
    found in Attachments 2 through 19.

# SuRVEY methodOLOGY

## Sampling Procedure

14. Attachment 1 provides information related to the sample selection
    process. To estimate the levels of monthly cable rates, we selected
    a random sample of cable communities. We divided communities into
    two groups -- the noncompetitive group (those without a finding of
    effective competition) and the competitive group (those deemed to
    face effective competition) \-- and selected a sample from each
    group. To determine the number of observations needed for
    statistical precision in our samples, we applied a statistical
    formula.[^15] Based on this formula, the noncompetitive sample size
    equals 415 of the 32,510 noncompetitive communities, and the
    competitive sample size equals 250 of the 997 competitive
    communities.[^16] To make these samples representative with respect
    to the typical subscriber and to gain statistical precision, we used
    subscriber weights in selecting the samples. In addition, to
    represent all types of competition, we divided or 'stratified' the
    competitive sample into subgroups or 'strata'.[^17]

15. To select the 415 observations from the group of noncompetitive
    communities, we assigned each community a weight depending on the
    size of the cable system serving the community.[^18] A sample that
    was not stratified by system size would have placed a
    disproportionately greater emphasis on small cable systems that
    serve a small percentage of subscribers nationwide. Each system was
    given a weight equal to its percentage of the total of all cable
    subscribers nationwide. Because a system may serve more than one
    community, we also assigned a weight to each community within the
    cable system. Each community's weight depended on the number of
    subscribers in the community relative to the other communities in
    the cable system. Therefore, the selection probability for any
    community depended on both the system weight and community weight.

16. In the competitive sample, we included each category of effective
    competition. From the wireline overbuild category we chose one
    community from each effective competition filing, and we selected
    both the incumbent and rival cable operators. If the finding
    involved multiple communities, we selected one community at random
    depending on the number of subscribers relative to all communities
    in the filing. We used this same procedure to select for the DBS
    stratum. The remaining observations were allocated among the
    wireless overbuild and low-penetration test categories, in a manner
    that produced the smallest standard error considering historical
    price variance in each subgroup.[^19] Because communities in the
    wireless overbuild category tend to have similar prices, the
    sampling formula requires few sample observations. We adjusted this
    allocation upward, however, to 30 selections to ensure that we had a
    sufficient number of observations for statistical precision. Of the
    250 competitive sample observations, we selected: (a) 66 of the 122
    wireline overbuild incumbent cable operators; (b) 58 of the 114
    rivals among the wireline overbuild rival cable operators; (c) 56 of
    the 474 DBS communities; (d) 30 of the 175 wireless overbuild
    communities; and (e) 40 of the 112 low-penetration test communities.

17. We asked cable operators to download, complete, and return a Survey
    questionnaire via the Internet for each of their communities in the
    sample. We requested data as of January 1, 2004, and limited amounts
    of data as of January 1, 2003 and January 1, 2002.[^20] Cable
    operators returned 641 of the 665 questionnaires, a response rate of
    96 percent. Of the 24 non-responses, one-half resulted from the
    cable operator having discontinued service in the community as a
    result of merger, sale, or transfer of operation. Cable operators
    returned questionnaires for 406 of the 415 communities in the
    noncompetitive sample and 235 of the 250 communities in the
    competitive sample for response rates of 98 percent and 94 percent,
    respectively. We reviewed the questionnaires for completeness and
    apparent accuracy of data. When a response to a question was
    incomplete or out-of-trend, we asked that cable operator to check
    its answer and revise the response if necessary.

18. Using these Survey responses, we calculated statistical averages for
    each question on the questionnaire. First, we calculated averages
    for each competitive category. Second, to compute averages for the
    competitive group, we assigned each competitive category a weight
    corresponding to our estimates of its share of total subscribers.
    Third, we calculated averages for the noncompetitive group. Weights
    were not needed to calculate these averages as the sampling
    probability was on the basis of number of subscribers. Finally, to
    compute the weighted average of both groups combined, we assigned
    weights according to each group's share of total subscribers.[^21]

## Survey Accuracy

19. Sample statistics are subject to both sampling and non-sampling
    error. Statistical sampling is a way of estimating the unknown
    characteristics of an entire population by examining a random sample
    that is representative of that population. Because this Report is
    based on a sample of cable operators, the averages we report
    probably do not match exactly the averages that would result if we
    had surveyed all cable operators. If it were possible to survey all
    cable operators we might increase the accuracy of the report, but we
    would also increase the cost of the Survey. The number of cable
    communities we selected for our sample strikes a reasonable balance
    between accuracy and cost.

20. The difference between the true average and our sample average (or
    "standard error" of the mean) depends on both sample size and the
    degree of variability inherent in the statistics being studied, in
    this case monthly rates that cable operators charge. We can estimate
    this standard error from the Survey data, and use it to express a
    degree of confidence that the true average falls within a range
    around our sample average. This degree of confidence is usually
    expressed as assurance that in 95 out of 100 similar samples, the
    true average will fall within the stated range (the
    "95-percent-confidence interval").[^22] We report standard errors
    for our estimates of average monthly rates in the Attachments, which
    can be used to calculate the 95-percent confidence interval for
    specific averages. In addition, these standard errors can be used to
    identify whether percent differences in monthly cable rates, either
    over time or between the competitive and noncompetitive groups, are
    statistically significant at a 95-percent confidence level.

21. In addition to error inherent in the process of sampling,
    non-sampling errors may occur from various sources. Non-sampling
    error can occur for various reasons including errors made by survey
    respondents, and errors in the survey methodology, data collection,
    and data processing. As in previous surveys, we weighted each
    community using FCC Form 325 as of 1994, the most recent data
    available on subscribers in all communities, together with
    information gathered from effective competition filings. Because it
    is likely that the percentage growth in subscribers tends to be
    evenly distributed across all systems, the 1994 weights serve as a
    reasonable, although imperfect, approximation of current weights.

22. Our sampling methodology may change from survey to survey in order
    to improve design and to reflect changes in industry conditions.
    Even though we made several changes to our methodology for this
    Survey, we believe that results across surveys as reported in
    Attachment 4 are comparable in terms of the trends they show. This
    is particularly true for the 5-year compound average rates of
    change. In previous surveys, in any stratum we selected communities
    by simple random sampling. In this Survey, the probability of
    selection depended on the size of the community relative to other
    communities. Also, in previous surveys, we defined equipment as an
    analog converter and remote control unit. In this Survey, for cable
    operators that no longer offer an analog converter, equipment is
    defined as a digital converter and remote control.[^23]

## Variables

23. From the Survey responses, we calculated averages for monthly cable
    rates and price per channel, as described below:

[Average monthly rate for basic service and expanded basic
service]{.underline}. This is the average monthly rate for programming
services. It excludes additional charges that subscribers may incur for
mini-tiers of programming, premium channels, pay-per-view including
video on demand, digital programming, cable equipment, and installation
charges.

[Average monthly charge for equipment]{.underline}. This is the monthly
charge paid by subscribers for an analog addressable converter plus a
remote control. If the cable operator does not offer an analog
converter, it is the price of a digital converter and remote control.
[^24]

[Average monthly rate]{.underline}. This is the sum of the average
monthly rate for programming and equipment. It represents the rate that
a typical subscriber pays on average for basic service, expanded basic
service, and a converter and remote control.

[Average number of channels]{.underline}. This variable is the average
number of channels on the basic and expanded basic tiers. This variable
excludes channels on mini-tiers, as well as premium channels,
pay-per-view including video on demand, and digital programming.

[Average monthly rate per channel]{.underline}. This variable is the
average monthly rate divided by the average number of channels.[^25]

# Survey results

## Average Monthly Rates

24. Table 1 shows that between January 1, 2003 and January 1, 2004 the
    average monthly rate for programming and equipment increased by 5.4
    percent, from \$42.99 to \$45.32. This rate of increase was lower
    than the 5-year average of 7.5 percent. The combined number of
    channels on the basic and expanded basic tiers increased by 4.1
    percent, compared with the 5-year average increase of 6.3 percent.
    The average rate per channel increased by 1.2 percent, slightly
    higher than the 5-year average of 0.4 percent.

+-------------------+---------+---------+--------+---------+----------+
| **Table 1**       |         |         |        |         |          |
|                   |         |         |        |         |          |
| **Monthly Cable   |         |         |        |         |          |
| Rates and Price   |         |         |        |         |          |
| Per Channel**     |         |         |        |         |          |
+-------------------+---------+---------+--------+---------+----------+
| Service Elements  | Average |         | Annual |         |          |
|                   |         |         | P      |         |          |
|                   |         |         | ercent |         |          |
|                   |         |         | Change |         |          |
+-------------------+---------+---------+--------+---------+----------+
|                   | Jan. 1, | Jan. 1, | Jan.   | Jan. 1, | 5-Year   |
|                   | 2004    | 2003    | 1,     | 2003    | Average  |
|                   |         |         | 2004   |         |          |
+-------------------+---------+---------+--------+---------+----------+
| Basic Service     | \$13.80 | \$13.45 | 2.6%   | 2.6%    | 2.6%     |
+-------------------+---------+---------+--------+---------+----------+
| Expanded basic    | \$27.24 | \$25.50 | 6.8%   | 10.8%   | 10.4%    |
| service           |         |         |        |         |          |
+-------------------+---------+---------+--------+---------+----------+
| Basic and         | \$41.04 | \$38.95 | 5.4%   | 7.8%    | 7.4%     |
| expanded basic    |         |         |        |         |          |
+-------------------+---------+---------+--------+---------+----------+
| Converter &       | \$4.28  | \$4.04  | 5.9%   | 7.2%    | 9.1%     |
| remote control    |         |         |        |         |          |
+-------------------+---------+---------+--------+---------+----------+
| Programming &     | \$45.32 | \$42.99 | 5.4%   | 7.8%    | 7.5%     |
| equipment         |         |         |        |         |          |
+-------------------+---------+---------+--------+---------+----------+
| Number of         | 70.3    | 67.5    | 4.1%   | \-\--   | 6.3%     |
| channels          |         |         |        |         |          |
+-------------------+---------+---------+--------+---------+----------+
| Average rate per  | \$0.660 | \$0.652 | 1.2%   | \-\--   | 0.4%     |
| channel           |         |         |        |         |          |
+-------------------+---------+---------+--------+---------+----------+
| *Source:*         |         |         |        |         |          |
| Attachments 2, 3, |         |         |        |         |          |
| and 4. Annual     |         |         |        |         |          |
| percent change is |         |         |        |         |          |
| the change as of  |         |         |        |         |          |
| the date shown    |         |         |        |         |          |
| compared to one   |         |         |        |         |          |
| year earlier.     |         |         |        |         |          |
+-------------------+---------+---------+--------+---------+----------+

25. The above changes reflect the price of basic service, expanded basic
    service, and equipment consisting of a converter and remote control.
    Between January 1, 2003 and January 1, 2004, the average rate for
    basic service increased by 2.6 percent, from \$13.45 to \$13.80. The
    average rate for expanded basic service increased by 6.8 percent,
    from \$25.50 to \$27.24. The average rate for equipment increased by
    5.9 percent, from \$4.04 to \$4.28.

26. Table 2 compares general consumer price indices with the average
    monthly rate for programming and equipment as well as changes in the
    price per channel. BLS publishes the CPI which measures price
    inflation related to all goods and services.[^26] By this measure,
    inflation increased by 1.1 percent over the 12 months ending January
    2004, and by an average of 2.1 percent over the past five years. BLS
    also publishes price indices for many components of the overall CPI
    including a cable CPI.[^27] The cable CPI increased by 3.8 percent
    over the 12 months ending January 2004, and by an average of 4.6
    percent over the past five years. Because it covers a different mix
    of services, the cable CPI cannot be compared directly with the
    results of our Survey.[^28]

+----------------------+-----------+-----------+----------+----------+
| **Table 2**          |           |           |          |          |
|                      |           |           |          |          |
| **Percent Change in  |           |           |          |          |
| Monthly Cable Rate   |           |           |          |          |
| and Consumer Price   |           |           |          |          |
| Index**              |           |           |          |          |
+----------------------+-----------+-----------+----------+----------+
| Annual Percent       | FCC Cable |           | Consumer |          |
| Changes              | Price     |           | Price    |          |
|                      | Survey    |           | Index    |          |
+----------------------+-----------+-----------+----------+----------+
|                      | Monthly   | Price Per | CPI      | Cable    |
|                      | Cable     | Channel   |          | CPI      |
|                      | Rate      |           |          |          |
+----------------------+-----------+-----------+----------+----------+
| January 1, 2004      | 5.4%      | 1.1%      | 1.1%     | 3.8%     |
+----------------------+-----------+-----------+----------+----------+
| 5-year average       | 7.5%      | 0.4%      | 2.1%     | 4.6%     |
+----------------------+-----------+-----------+----------+----------+
| *Source:* Table 1    |           |           |          |          |
| and Attachment 4.    |           |           |          |          |
+----------------------+-----------+-----------+----------+----------+

## Comparison between Noncompetitive and Competitive Groups

27. For the noncompetitive group (communities without an effective
    competition finding), as shown in Table 3, the monthly cable rate
    increased by 5.6 percent, to \$45.56, for the year ending January
    1, 2004. This increase is lower than the 5-year average increase of
    7.5 percent. The number of channels on basic and expanded basic
    increased to 70.1 channels, a 4.2 percent increase for the year
    ending January 1, 2004, which is lower than the 6.3 percent 5-year
    average. The price per channel increased by 1.2 percent, to 66.5
    cents per channel, compared with a 5-year average increase of 0.4
    percent.

+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
| **Table 3** |     |     |     |        |     |     |     |         |
|             |     |     |     |        |     |     |     |         |
| **Monthly   |     |     |     |        |     |     |     |         |
| Cable       |     |     |     |        |     |     |     |         |
| Rates, by   |     |     |     |        |     |     |     |         |
| Sample      |     |     |     |        |     |     |     |         |
| Group**     |     |     |     |        |     |     |     |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
| Service     | No  |     |     |        | Co  |     |     |         |
| Elements    | nco |     |     |        | mpe |     |     |         |
|             | mpe |     |     |        | tit |     |     |         |
|             | tit |     |     |        | ive |     |     |         |
|             | ive |     |     |        | Gr  |     |     |         |
|             | Gr  |     |     |        | oup |     |     |         |
|             | oup |     |     |        |     |     |     |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
|             | J   | Ann |     |        | J   | Ann |     |         |
|             | an. | ual |     |        | an. | ual |     |         |
|             | 1,  | P   |     |        | 1,  | P   |     |         |
|             | 2   | erc |     |        | 2   | erc |     |         |
|             | 004 | ent |     |        | 004 | ent |     |         |
|             |     | Cha |     |        |     | Cha |     |         |
|             |     | nge |     |        |     | nge |     |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
|             |     | Jan | J   | 5-Yr.  |     | Jan | J   | 5-Yr.   |
|             |     | '04 | an. | A      |     | '04 | an. | Average |
|             |     |     | '03 | verage |     |     | '03 |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
| Basic       | \   | 2   | 2   | 2.4%   | \   | 2   | 4   | 5.0%    |
| Service     | $13 | .6% | .5% |        | $14 | .3% | .0% |         |
|             | .73 |     |     |        | .58 |     |     |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
| Expanded    | \   | 7   | 11  | 10.6%  | \   | 4   | 5   | 8.6%    |
| basic       | $27 | .1% | .1% |        | $23 | .3% | .9% |         |
|             | .56 |     |     |        | .59 |     |     |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
| Programming | \   | 5   | 8   | 7.4%   | \   | 3   | 5   | 7.1%    |
| total       | $41 | .6% | .0% |        | $38 | .6% | .1% |         |
|             | .29 |     |     |        | .17 |     |     |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
| Equipment   | \$4 | 6   | 6   | 9.1%   | \$4 | 4   | 6   | 9.7%    |
|             | .27 | .0% | .9% |        | .31 | .4% | .4% |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
| Monthly     | \   | 5   | 7   | 7.5%   | \   | 3   | 5   | 7.4%    |
| cable rate  | $45 | .6% | .9% |        | $42 | .6% | .3% |         |
|             | .56 |     |     |        | .48 |     |     |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
| Number of   | 7   | 4   | \-  | 6.3%   | 7   | 4   | \-  | 5.5%    |
| channels    | 0.1 | .2% | \-- |        | 2.5 | .0% | \-- |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
| Price per   | \   | 1   | \-  | 0.4%   | \   | -0  | \-  | 0.9%    |
| channel     | $0. | .2% | \-- |        | $0. | .3% | \-- |         |
|             | 665 |     |     |        | 599 |     |     |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+
| *Source:*   |     |     |     |        |     |     |     |         |
| Attachments |     |     |     |        |     |     |     |         |
| 2, 3, and   |     |     |     |        |     |     |     |         |
| 5.          |     |     |     |        |     |     |     |         |
+-------------+-----+-----+-----+--------+-----+-----+-----+---------+

28. For the competitive group (communities where effective competition
    was found to be present), the monthly cable rate increased by 3.6
    percent, to \$42.48, for the year ending January 1, 2004. This
    increase is lower than the 7.4 percent 5-year average. The number of
    channels on basic and expanded basic increased to 72.5 channels, a
    4.0 percent increase for the year ending January 1, 2004, which is
    lower than the 5.5 percent 5-year average. The monthly price per
    channel decreased by -0.3 percent, to 59.9 cents, compared with a
    0.9 percent 5-year average rate of increase.

29. Table 4 shows the percentage difference in monthly cable rates
    between the noncompetitive group and the competitive group
    ("competitive differential") as of January 1, 2004. The competitive
    differential in monthly cable rates is 7.3 percent (this is the
    difference in monthly cable rates shown in Table 3, equal to \$45.56
    and \$42.48, respectively, for the noncompetitive and competitive
    groups, expressed as a percentage of rates for the competitive
    group). The competitive differential in price per channel equals
    11.0 percent. The degree of difference varied by competitive
    subgroup. The highest differentials were associated with wireline
    overbuild competition. For communities in this subgroup, the monthly
    cable rate and price per channel were, respectively, 15.7 percent
    lower and 27.2 percent lower than those averages for the
    noncompetitive group.

+------------+---------+---------+----------+-----------+------------+
| **Table    |         |         |          |           |            |
| 4**        |         |         |          |           |            |
|            |         |         |          |           |            |
| **C        |         |         |          |           |            |
| ompetitive |         |         |          |           |            |
| Diff       |         |         |          |           |            |
| erentials, |         |         |          |           |            |
| as of      |         |         |          |           |            |
| January 1, |         |         |          |           |            |
| 2004 \***  |         |         |          |           |            |
+------------+---------+---------+----------+-----------+------------+
| Service    | Comp    | Comp    |          |           |            |
| Elements   | etitive | etitive |          |           |            |
|            | Su      | Su      |          |           |            |
|            | bgroups | bgroups |          |           |            |
|            | C       |         |          |           |            |
|            | ombined |         |          |           |            |
+------------+---------+---------+----------+-----------+------------+
|            |         | DBS     | Low      | Wireline  | Wireless   |
|            |         | \*\*    | Pen      | Overbuild | Overbuild  |
|            |         |         | etration |           | \*\*       |
+------------+---------+---------+----------+-----------+------------+
| Monthly    | 7.3%    | 3.7%    | 7.5%     | 15.7%     | -1.0%      |
| cable rate |         |         |          |           |            |
+------------+---------+---------+----------+-----------+------------+
| Number of  | -3.3%   | -0.6%   | 12.8%    | -5.6%     | -1.4%      |
| channels   |         |         |          |           |            |
+------------+---------+---------+----------+-----------+------------+
| Price per  | 11.0%   | 2.6%    | -5.7%    | 27.2%     | 4.6%       |
| channel    |         |         |          |           |            |
+------------+---------+---------+----------+-----------+------------+
| **\***     |         |         |          |           |            |
| Percent    |         |         |          |           |            |
| that the   |         |         |          |           |            |
| nonc       |         |         |          |           |            |
| ompetitive |         |         |          |           |            |
| group is   |         |         |          |           |            |
| higher or  |         |         |          |           |            |
| lower than |         |         |          |           |            |
| the        |         |         |          |           |            |
| c          |         |         |          |           |            |
| ompetitive |         |         |          |           |            |
| group in   |         |         |          |           |            |
| price.     |         |         |          |           |            |
| \*\* These |         |         |          |           |            |
| averages   |         |         |          |           |            |
| include    |         |         |          |           |            |
| cable      |         |         |          |           |            |
| system     |         |         |          |           |            |
| prices in  |         |         |          |           |            |
| c          |         |         |          |           |            |
| ommunities |         |         |          |           |            |
| with an    |         |         |          |           |            |
| Effective  |         |         |          |           |            |
| C          |         |         |          |           |            |
| ompetition |         |         |          |           |            |
| finding    |         |         |          |           |            |
| based on   |         |         |          |           |            |
| DBS or     |         |         |          |           |            |
| wireless   |         |         |          |           |            |
| co         |         |         |          |           |            |
| mpetition, |         |         |          |           |            |
| but not    |         |         |          |           |            |
| the prices |         |         |          |           |            |
| charged by |         |         |          |           |            |
| the        |         |         |          |           |            |
| competing  |         |         |          |           |            |
| DBS or     |         |         |          |           |            |
| wireless   |         |         |          |           |            |
| system.    |         |         |          |           |            |
| *Source:*  |         |         |          |           |            |
| A          |         |         |          |           |            |
| ttachments |         |         |          |           |            |
| 2, 3, and  |         |         |          |           |            |
| 6.         |         |         |          |           |            |
+------------+---------+---------+----------+-----------+------------+

##  {#section .unnumbered}

## Change in Monthly Revenue and Expense per Subscriber 

30. The Survey collected information on cable system operating revenues
    and expenses related to all cable services for years 2002 and 2003.
    These services include cable television, cable Internet access,
    cable telephony, installation charges, advertising, and
    miscellaneous revenues and expenses. The Survey also collected
    information on programming expenses for basic and expanded basic
    service as a component of total operating expense. This includes
    changes in fees for existing programming as well as additional fees
    for new programming paid to network programmers and broadcasters.
    The Survey did not include separate revenue and expense questions
    for cable television service because it would have required
    assumptions regarding how to distribute common costs across cable
    system products. For the same reason, information on corporate
    overhead and capital expenses is not included.[^29]

31. In this report we have not attempted to associate rate changes with
    specific cost changes.  The nature of cable service has changed
    significantly in recent years with the emergence of digital cable,
    Internet access, and telephony as important new services so that
    these new services now represent significant sources of cable system
    revenues and costs. A substantial portion of these costs are
    incurred to support all system services jointly and, therefore,
    cannot be attributed directly to basic and expanded basic cable
    service. In the absence of a uniform system of accounts and cost
    allocation standards, there is no uniform way to allocate these
    joint costs to specific lines of business or service for purposes of
    statistical analysis.  Moreover, to provide a complete picture, it
    would be necessary to take into account revenue changes that might
    offset increases in costs. Thus, from a survey of this nature, there
    is no way to determine which costs are driving rate increases.

32. Table 5 reports cable system operating revenue and expense per month
    on a per subscriber basis. Monthly revenue increased by \$5.88 on
    average. Monthly operating expense per subscriber increased by
    \$3.24. As noted above, total revenue and expense are not
    specifically attributed to cable television service. However, the
    Survey collected information on programming expense, one of the
    components of total operating expense. Of the \$3.24 increase in
    operating expense per subscriber, \$1.06 or one-third of the total
    was attributable to programming expense for basic and expanded basic
    cable television service. Of this \$1.06 increase in basic and
    expanded basic programming expense per subscriber, \$0.39, or about
    one-third of the total, is a result of increased sports programming
    expenses. Finally, Table 5 shows that relative to the changes for
    the noncompetitive group, the competitive group experienced a
    relatively low increase in revenue and a relatively high increase in
    expense.

+---------------+----------+----------+-------+-------+-------+-------+
| **Table 5**   |          |          |       |       |       |       |
|               |          |          |       |       |       |       |
| **Change in   |          |          |       |       |       |       |
| Monthly       |          |          |       |       |       |       |
| Operating     |          |          |       |       |       |       |
| Revenue and   |          |          |       |       |       |       |
| Expense per   |          |          |       |       |       |       |
| Subscriber**  |          |          |       |       |       |       |
|               |          |          |       |       |       |       |
| **Excluding   |          |          |       |       |       |       |
| Corporate     |          |          |       |       |       |       |
| Overhead and  |          |          |       |       |       |       |
| Capital       |          |          |       |       |       |       |
| Expenses**    |          |          |       |       |       |       |
|               |          |          |       |       |       |       |
| **All Cable   |          |          |       |       |       |       |
| Services,     |          |          |       |       |       |       |
| 2002 to       |          |          |       |       |       |       |
| 2003**        |          |          |       |       |       |       |
+---------------+----------+----------+-------+-------+-------+-------+
| Sample Groups | All      |          | C     |       |       |       |
|               | Cable    |          | hange |       |       |       |
|               | System   |          | in    |       |       |       |
|               | Services |          | Mo    |       |       |       |
|               | i        |          | nthly |       |       |       |
|               | ncluding |          | P     |       |       |       |
|               | Tel      |          | rogra |       |       |       |
|               | evision, |          | mming |       |       |       |
|               | Internet |          | Ex    |       |       |       |
|               | Access,  |          | pense |       |       |       |
|               | and      |          | per   |       |       |       |
|               | Other    |          | Subsc |       |       |       |
|               |          |          | riber |       |       |       |
|               |          |          |       |       |       |       |
|               |          |          | for   |       |       |       |
|               |          |          | Basic |       |       |       |
|               |          |          | and   |       |       |       |
|               |          |          | Exp   |       |       |       |
|               |          |          | anded |       |       |       |
|               |          |          | Basic |       |       |       |
|               |          |          | Ser   |       |       |       |
|               |          |          | vice, |       |       |       |
|               |          |          | as a  |       |       |       |
|               |          |          |       |       |       |       |
|               |          |          | Comp  |       |       |       |
|               |          |          | onent |       |       |       |
|               |          |          | of    |       |       |       |
|               |          |          | S     |       |       |       |
|               |          |          | ystem |       |       |       |
|               |          |          | Ex    |       |       |       |
|               |          |          | pense |       |       |       |
|               |          |          | in    |       |       |       |
|               |          |          | C     |       |       |       |
|               |          |          | olumn |       |       |       |
|               |          |          | C     |       |       |       |
+---------------+----------+----------+-------+-------+-------+-------+
|               | Change   | Change   | News  | S     | Other | Total |
|               | in       | in       |       | ports |       |       |
|               | Monthly  | Monthly  |       |       |       |       |
|               | Revenue  | Expense  |       |       |       |       |
|               | per      | per      |       |       |       |       |
|               | Su       | Su       |       |       |       |       |
|               | bscriber | bscriber |       |       |       |       |
|               |          | \*       |       |       |       |       |
+---------------+----------+----------+-------+-------+-------+-------+
| A             | B        | C        | D     | E     | F     | G     |
+---------------+----------+----------+-------+-------+-------+-------+
| Sample groups | \$5.88   | \$3.24   | \     | \     | \     | \     |
| combined      |          |          | $0.05 | $0.39 | $0.62 | $1.06 |
+---------------+----------+----------+-------+-------+-------+-------+
| N             | \$5.92   | \$3.22   | \     | \     | \     | \     |
| oncompetitive |          |          | $0.05 | $0.38 | $0.62 | $1.05 |
| group         |          |          |       |       |       |       |
+---------------+----------+----------+-------+-------+-------+-------+
| Competitive   | \$5.43   | \$3.48   | \     | \     | \     | \     |
| group         |          |          | $0.07 | $0.44 | $0.70 | $1.21 |
+---------------+----------+----------+-------+-------+-------+-------+
| *Source:*     |          |          |       |       |       |       |
| Attachments 1 |          |          |       |       |       |       |
| and 10. \*    |          |          |       |       |       |       |
| Column C does |          |          |       |       |       |       |
| not include   |          |          |       |       |       |       |
| the following |          |          |       |       |       |       |
| expenses:     |          |          |       |       |       |       |
| Corporate     |          |          |       |       |       |       |
| overhead,     |          |          |       |       |       |       |
| depreciation  |          |          |       |       |       |       |
| and           |          |          |       |       |       |       |
| amortization, |          |          |       |       |       |       |
| interest      |          |          |       |       |       |       |
| expense,      |          |          |       |       |       |       |
| losses from   |          |          |       |       |       |       |
| sale or       |          |          |       |       |       |       |
| disposition   |          |          |       |       |       |       |
| of property,  |          |          |       |       |       |       |
| and           |          |          |       |       |       |       |
| extraordinary |          |          |       |       |       |       |
| expenses.     |          |          |       |       |       |       |
+---------------+----------+----------+-------+-------+-------+-------+

## Installation Charges for Cable Television Service

33. ^Table\ 6\ shows\ installation\ charges\ for\ cable\ television\ service.\ For\ an\ unwired\ residence,\ the\ average\ installation\ charge\ was\ \$45.03,\ a\ 2.5\ percent\ increase\ during\ the\ year\ ending\ January\ 1,\ 2004.\ For\ a\ pre-wired\ residence,\ the\ average\ charge\ was\ \$31.25,\ representing\ a\ 1.0\ percent\ annual\ increase.\ For\ service\ reconnection,\ the\ average\ charge\ was\ \$28.60,\ representing\ a\ 2.8\ percent\ annual\ increase.^

+---------------+--------+--------+--------+--------+--------+--------+
| **Table 6**   |        |        |        |        |        |        |
|               |        |        |        |        |        |        |
| *             |        |        |        |        |        |        |
| *Installation |        |        |        |        |        |        |
| Charges**     |        |        |        |        |        |        |
+---------------+--------+--------+--------+--------+--------+--------+
| Sample Groups | U      |        | Pre    |        | Reconn |        |
|               | nwired |        | -Wired |        | ection |        |
|               | Res    |        | Res    |        | of     |        |
|               | idence |        | idence |        | S      |        |
|               |        |        |        |        | ervice |        |
+---------------+--------+--------+--------+--------+--------+--------+
|               | Jan.   | P      | Jan.   | P      | Jan.   | P      |
|               | 1,     | ercent | 1,     | ercent | 1,     | ercent |
|               | 2004   | Change | 2004   | Change | 2004   | Change |
+---------------+--------+--------+--------+--------+--------+--------+
| Sample groups | \      | 2.5%   | \      | 1.0%   | \      | 2.8%   |
| combined      | $45.03 |        | $31.25 |        | $28.60 |        |
+---------------+--------+--------+--------+--------+--------+--------+
| N             | \      | 2.5%   | \      | 1.0%   | \      | 3.0%   |
| oncompetitive | $45.19 |        | $31.24 |        | $28.71 |        |
| group         |        |        |        |        |        |        |
+---------------+--------+--------+--------+--------+--------+--------+
| Competitive   | \      | 3.9%   | \      | 2.5%   | \      | 1.3%   |
| group         | $43.25 |        | $31.47 |        | $27.43 |        |
+---------------+--------+--------+--------+--------+--------+--------+
| *Source:*     |        |        |        |        |        |        |
| Attachment    |        |        |        |        |        |        |
| 11. Percent   |        |        |        |        |        |        |
| change is the |        |        |        |        |        |        |
| compound      |        |        |        |        |        |        |
| annual change |        |        |        |        |        |        |
| from July 1,  |        |        |        |        |        |        |
| 2002 to       |        |        |        |        |        |        |
| January 1,    |        |        |        |        |        |        |
| 2004.         |        |        |        |        |        |        |
+---------------+--------+--------+--------+--------+--------+--------+

34. Table 7 shows the competitive differential in installation charges,
    in terms of the percentage that the noncompetitive group may exceed
    each competitive group and subgroup. For an unwired residence, the
    noncompetitive group charged 4.5 percent higher, ranging from 5.1
    percent higher than the subgroup facing wireline overbuilds to 0.9
    percent less than the subgroup facing wireless overbuilds. For a
    pre-wired residence, the noncompetitive group charged 0.7 percent
    less, ranging from 0.3 percent higher than wireless overbuilds to
    10.5 percent less than the low penetration subgroup. For service
    reconnection, the noncompetitive group charged 4.7 percent higher,
    ranging from 7.3 percent higher than the subgroup facing wireline
    overbuilds to 5.4 percent less than the low penetration subgroup.

+------------+--------+-------+-------+-------+------+------+------+
| **Table    |        |       |       |       |      |      |      |
| 7**        |        |       |       |       |      |      |      |
|            |        |       |       |       |      |      |      |
| **C        |        |       |       |       |      |      |      |
| ompetitive |        |       |       |       |      |      |      |
| Dif        |        |       |       |       |      |      |      |
| ferentials |        |       |       |       |      |      |      |
| in         |        |       |       |       |      |      |      |
| In         |        |       |       |       |      |      |      |
| stallation |        |       |       |       |      |      |      |
| Charges    |        |       |       |       |      |      |      |
| \***       |        |       |       |       |      |      |      |
+------------+--------+-------+-------+-------+------+------+------+
| Ins        | Compe  | C     |       |       |      |      |      |
| tallations | titive | ompet |       |       |      |      |      |
|            | Sub    | itive |       |       |      |      |      |
|            | groups | Sub   |       |       |      |      |      |
|            | Co     | group |       |       |      |      |      |
|            | mbined |       |       |       |      |      |      |
+------------+--------+-------+-------+-------+------+------+------+
|            |        | Wir   |       |       | DBS  | Wire | Low  |
|            |        | eline |       |       | O    | less | Pen  |
|            |        | Over  |       |       | verb | O    | etra |
|            |        | build |       |       | uild | verb | tion |
|            |        |       |       |       | \*\* | uild |      |
|            |        |       |       |       |      | \*\* |      |
+------------+--------+-------+-------+-------+------+------+------+
|            |        | Wei   | Incu  | Rival |      |      |      |
|            |        | ghted | mbent |       |      |      |      |
|            |        | Av    |       |       |      |      |      |
|            |        | erage |       |       |      |      |      |
+------------+--------+-------+-------+-------+------+------+------+
| Unwired    | 4.5%   | 5.1%  | 1.8%  | 22.8% | 9.7% | -    | 0.3% |
| residence  |        |       |       |       |      | 0.9% |      |
+------------+--------+-------+-------+-------+------+------+------+
| Pre-wired  | -0.7%  | -1.0% | 0.3%  | -6.4% | -    | 5.1% | -1   |
| residence  |        |       |       |       | 3.6% |      | 0.5% |
+------------+--------+-------+-------+-------+------+------+------+
| Service    | 4.7%   | 7.3%  | 7.7%  | 5.7%  | -    | 1    | -    |
| re         |        |       |       |       | 2.2% | 1.3% | 5.4% |
| connection |        |       |       |       |      |      |      |
+------------+--------+-------+-------+-------+------+------+------+
| **\***     |        |       |       |       |      |      |      |
| Percent    |        |       |       |       |      |      |      |
| that the   |        |       |       |       |      |      |      |
| nonc       |        |       |       |       |      |      |      |
| ompetitive |        |       |       |       |      |      |      |
| price is   |        |       |       |       |      |      |      |
| higher or  |        |       |       |       |      |      |      |
| lower than |        |       |       |       |      |      |      |
| the        |        |       |       |       |      |      |      |
| c          |        |       |       |       |      |      |      |
| ompetitive |        |       |       |       |      |      |      |
| price as   |        |       |       |       |      |      |      |
| of January |        |       |       |       |      |      |      |
| 1, 2004.   |        |       |       |       |      |      |      |
| \*\* These |        |       |       |       |      |      |      |
| averages   |        |       |       |       |      |      |      |
| include    |        |       |       |       |      |      |      |
| cable      |        |       |       |       |      |      |      |
| system     |        |       |       |       |      |      |      |
| prices in  |        |       |       |       |      |      |      |
| c          |        |       |       |       |      |      |      |
| ommunities |        |       |       |       |      |      |      |
| with an    |        |       |       |       |      |      |      |
| Effective  |        |       |       |       |      |      |      |
| C          |        |       |       |       |      |      |      |
| ompetition |        |       |       |       |      |      |      |
| finding    |        |       |       |       |      |      |      |
| based on   |        |       |       |       |      |      |      |
| DBS or     |        |       |       |       |      |      |      |
| wireless   |        |       |       |       |      |      |      |
| co         |        |       |       |       |      |      |      |
| mpetition, |        |       |       |       |      |      |      |
| but not    |        |       |       |       |      |      |      |
| the prices |        |       |       |       |      |      |      |
| charged by |        |       |       |       |      |      |      |
| the        |        |       |       |       |      |      |      |
| competing  |        |       |       |       |      |      |      |
| DBS or     |        |       |       |       |      |      |      |
| wireless   |        |       |       |       |      |      |      |
| system.    |        |       |       |       |      |      |      |
| *Source:*  |        |       |       |       |      |      |      |
| Derived    |        |       |       |       |      |      |      |
| from       |        |       |       |       |      |      |      |
| Attachment |        |       |       |       |      |      |      |
| 11.        |        |       |       |       |      |      |      |
+------------+--------+-------+-------+-------+------+------+------+

##  {#section-1 .unnumbered}

## Average Monthly Rates for Digital Programming Service

35. Table 8 shows the monthly price of the major digital tier and a
    digital converter and remote control as of January 1, 2004. Total
    price increased by 5.6 percent, from \$15.20 to \$16.05. The number
    of channels on the major digital tier increased by 15.3 percent,
    from 27.4 channels to 31.6 channels, and the price per channel
    declined by 14.5 percent, from 68.2 cents to 58.3 cents. Prices for
    the noncompetitive group and competitive group, respectively, were
    \$16.09 and \$15.58, representing a percentage difference of 3.4
    percent. On a price per channel basis, the respective prices for the
    noncompetitive group and the competitive group were 58.8 cents and
    52.4 cents, representing a competitive differential of 12.2 percent.

<table style="width:100%;">
<colgroup>
<col style="width: 21%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><p><strong>Table 8</strong></p>
<p><strong>Average Monthly Rates for Major Digital
Tier</strong></p></td>
</tr>
<tr class="even">
<td rowspan="2">Sample Groups</td>
<td colspan="2">Digital Tier<a href="#fn1" class="footnote-ref"
id="fnref1" role="doc-noteref"><sup>1</sup></a></td>
<td colspan="2">Digital Converter &amp; Remote</td>
<td colspan="2">Total Monthly Rate</td>
<td colspan="2">Number of Channels</td>
<td colspan="2">Price Per Channel</td>
</tr>
<tr class="odd">
<td>Jan. 1, 2004</td>
<td>Percent Change</td>
<td>Jan. 1, 2004</td>
<td>Percent Change</td>
<td>Jan. 1, 2004</td>
<td>Percent Change</td>
<td>Jan. 1, 2004</td>
<td>Percent Change</td>
<td>Jan. 1, 2004</td>
<td>Percent Change</td>
</tr>
<tr class="even">
<td>Sample groups combined</td>
<td>$10.72</td>
<td>6.3%</td>
<td>$5.33</td>
<td>4.1%</td>
<td>$16.05</td>
<td>5.6%</td>
<td>31.6</td>
<td>15.3%</td>
<td>$0.583</td>
<td>-14.5%</td>
</tr>
<tr class="odd">
<td>Noncompetitive group</td>
<td>$10.79</td>
<td>5.7%</td>
<td>$5.30</td>
<td>4.3%</td>
<td>$16.09</td>
<td>5.2%</td>
<td>31.4</td>
<td>15.0%</td>
<td>$0.588</td>
<td>-14.3%</td>
</tr>
<tr class="even">
<td>Competitive group</td>
<td>$9.93</td>
<td>15.5%</td>
<td>$5.66</td>
<td>1.3%</td>
<td>$15.58</td>
<td>9.8%</td>
<td>33.9</td>
<td>19.4%</td>
<td>$0.524</td>
<td>-17.6%</td>
</tr>
<tr class="odd">
<td colspan="11"><em>Source:</em> Attachments 12 and 13. Percent change
compares averages on January 1, 2003 with those on January 1, 2004.</td>
</tr>
</tbody>
</table>
<aside id="footnotes" class="footnotes footnotes-end-of-document"
role="doc-endnotes">
<hr />
<ol>
<li id="fn1"><p>Some communities were not included in the 2003 averages,
not offering a digital tier as of that date. Limiting the results to
only those communities that offered service in both years, the percent
change in the digital tier charge was 2.7 percent for the sample groups
combined and 2.8 percent and 4.7 percent, respectively, for the
noncompetitive and competitive groups.<a href="#fnref1"
class="footnote-back" role="doc-backlink">↩︎</a></p></li>
</ol>
</aside>

## Operating Capacity, Digital Programming, and Advanced Services

36. As of January 1, 2004, the average cable system had a capacity of
    734 MHz for the noncompetitive and competitive groups combined and
    for each of these groups individually. This represents a 7.3 percent
    increase over a 5-year period and a 1.3 percent increase over the
    previous year. Only 14 percent of subscribers were served by systems
    below 750 MHz, down from 54 percent on July 1, 1999. About 60
    percent of subscribers were served by systems at 750 MHz, and 26
    percent of subscribers were served by systems above 750 MHz, with
    most of those reporting a capacity of 870 MHz.

+--------------+---+-------+-------+----------+----------+----------+
| **Table 9**  |   |       |       |          |          |          |
|              |   |       |       |          |          |          |
| **Cable      |   |       |       |          |          |          |
| System       |   |       |       |          |          |          |
| Operating    |   |       |       |          |          |          |
| Capacity**   |   |       |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
| **Sample     | * |       |       | *        |          |          |
| Groups**     | * |       |       | *Percent |          |          |
|              | C |       |       | of       |          |          |
|              | a |       |       | Sub      |          |          |
|              | p |       |       | scribers |          |          |
|              | a |       |       | Served** |          |          |
|              | c |       |       |          |          |          |
|              | i |       |       | **by     |          |          |
|              | t |       |       | Systems  |          |          |
|              | y |       |       | With     |          |          |
|              | * |       |       | Capacity |          |          |
|              | * |       |       | of**     |          |          |
+--------------+---+-------+-------+----------+----------+----------+
|              | M | A     |       | 212 to   | 750 MHz  | 751 to   |
|              | H | nnual |       | 749 MHz  |          | 870 MHz  |
|              | z | Pe    |       |          |          |          |
|              |   | rcent |       |          |          |          |
|              |   | C     |       |          |          |          |
|              |   | hange |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
|              |   | Jan.  | 5     |          |          |          |
|              |   | 1,    | -Year |          |          |          |
|              |   | 2004  | Av    |          |          |          |
|              |   |       | erage |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
| January 1,   |   |       |       |          |          |          |
| 2004         |   |       |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
| Sample       | 7 | 1.3%  | 7.3%  | 14.3%    | 59.6%    | 26.1%    |
| groups       | 3 |       |       |          |          |          |
| combined     | 4 |       |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
| No           | 7 | 1.2%  | 7.4%  | 14.3%    | 59.3%    | 26.4%    |
| ncompetitive | 3 |       |       |          |          |          |
| group        | 4 |       |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
| Competitive  | 7 | 1.8%  | 3.9%  | 14.5%    | 62.4%    | 23.1%    |
| group        | 3 |       |       |          |          |          |
|              | 4 |       |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
| July 1, 1999 |   |       |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
| Sample       | 5 | \-\-- | \-\-- | 53.9%    | 44.4%    | 1.7%     |
| groups       | 3 |       |       |          |          |          |
| combined     | 4 |       |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
| No           | 5 | \-\-- | \-\-- | 54.2%    | 44.0%    | 1.8%     |
| ncompetitive | 3 |       |       |          |          |          |
| group        | 2 |       |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
| Competitive  | 6 | \-\-- | \-\-- | 44.1%    | 55.9%    | 0.0%     |
| group        | 1 |       |       |          |          |          |
|              | 9 |       |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+
| *Source:*    |   |       |       |          |          |          |
| Attachment   |   |       |       |          |          |          |
| 15.          |   |       |       |          |          |          |
+--------------+---+-------+-------+----------+----------+----------+

37. ^Cable\ system\ upgrades\ enable\ cable\ operators\ to\ provide\ more\ channels\ and\ also\ facilitate\ the\ offering\ of\ digital\ programming,\ Internet\ access,\ and\ telephony.^[^30]
    ^As\ of\ January\ 1,\ 2004,\ 97\ percent\ of\ subscribers\ were\ served\ by\ systems\ offering\ digital\ programming,\ with\ digital\ subscribers\ equal\ to\ 35\ percent\ of\ basic\ cable\ subscribers\ in\ those\ systems.\ Ninety-five\ percent\ of\ subscribers\ were\ served\ by\ systems\ offering\ cable\ Internet\ access,\ with\ cable\ Internet\ subscribers\ equal\ to\ 26\ percent\ of\ basic\ cable\ subscribers\ in\ those\ systems.\ Twenty-nine\ percent\ of\ subscribers\ were\ served\ by\ systems\ offering\ telephony,\ with\ telephone\ subscribers\ equal\ to\ 13\ percent\ of\ basic\ cable\ subscribers\ in\ those\ systems.^

+-----------------+-------+-------+-------+-------+-------+-------+
| **Table 10**    |       |       |       |       |       |       |
|                 |       |       |       |       |       |       |
| **Percent of    |       |       |       |       |       |       |
| Cable           |       |       |       |       |       |       |
| Subscribers     |       |       |       |       |       |       |
| Offered Digital |       |       |       |       |       |       |
| Programming and |       |       |       |       |       |       |
| Advanced        |       |       |       |       |       |       |
| Services**      |       |       |       |       |       |       |
|                 |       |       |       |       |       |       |
| **and Percent   |       |       |       |       |       |       |
| of Those        |       |       |       |       |       |       |
| Subscribers     |       |       |       |       |       |       |
| Taking          |       |       |       |       |       |       |
| Services**[^31] |       |       |       |       |       |       |
| **as of January |       |       |       |       |       |       |
| 1, 2004**       |       |       |       |       |       |       |
+-----------------+-------+-------+-------+-------+-------+-------+
| Sample Group    | Di    |       | Cable |       | Tele  |       |
|                 | gital |       | Int   |       | phony |       |
|                 | P     |       | ernet |       |       |       |
|                 | rogra |       | A     |       |       |       |
|                 | mming |       | ccess |       |       |       |
+-----------------+-------+-------+-------+-------+-------+-------+
|                 | Pe    | Of    | Pe    | Of    | Pe    | Of    |
|                 | rcent | T     | rcent | T     | rcent | T     |
|                 | Of    | hose, | Of    | hose, | Of    | hose, |
|                 | fered | Pe    | fered | Pe    | fered | Pe    |
|                 |       | rcent |       | rcent |       | rcent |
|                 |       | S     |       | S     |       | S     |
|                 |       | ubscr |       | ubscr |       | ubscr |
|                 |       | ibing |       | ibing |       | ibing |
+-----------------+-------+-------+-------+-------+-------+-------+
| Sample groups   | 97.3% | 35.2% | 94.8% | 26.1% | 28.5% | 12.9% |
| combined        |       |       |       |       |       |       |
+-----------------+-------+-------+-------+-------+-------+-------+
| Noncompetitive  | 97.3% | 34.9% | 94.8% | 26.0% | 28.8% | 12.1% |
| group           |       |       |       |       |       |       |
+-----------------+-------+-------+-------+-------+-------+-------+
| Competitive     | 96.9% | 37.7% | 93.9% | 26.7% | 24.9% | 22.0% |
| group           |       |       |       |       |       |       |
+-----------------+-------+-------+-------+-------+-------+-------+
| *Source:*       |       |       |       |       |       |       |
| Attachment 16.  |       |       |       |       |       |       |
+-----------------+-------+-------+-------+-------+-------+-------+

## Cable Television Channels

38. Table 11 shows that the total number of analog channels increased by
    only 0.3 percent, from 73.1 channels to 73.3 channels, while digital
    channels increased by 10.0 percent, from 136.4 channels to 150.1
    channels. Many cable operators offered fewer analog premium,
    pay-per-view, and mini-tier channels, shown by the number of analog
    channels in those categories declining by almost half, from 5.6
    channels to 3.0 channels. Correspondingly, the number of digital
    premium, pay-per-view (including video on demand), and mini-tier
    channels increased by 8.7 percent, from 109.0 channels to 118.5
    channels.

+--------------+-----------+------+------+------+-----+-------+-----+
| **Table 11** |           |      |      |      |     |       |     |
|              |           |      |      |      |     |       |     |
| **Number of  |           |      |      |      |     |       |     |
| Channels**   |           |      |      |      |     |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
| Sample Group | Date      | An   |      |      | D   |       |     |
|              |           | alog |      |      | igi |       |     |
|              |           | Chan |      |      | tal |       |     |
|              |           | nels |      |      | Ch  |       |     |
|              |           |      |      |      | ann |       |     |
|              |           |      |      |      | els |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
|              |           | B    | Prem | T    | Ma  | Pre   | To  |
|              |           | asic | ium, | otal | jor | mium, | tal |
|              |           | &    | Pay, |      | D   | Pay,  |     |
|              |           | Expa | &    |      | igi | &     |     |
|              |           | nded | Mini |      | tal | Mini  |     |
|              |           | B    | T    |      | T   | Tiers |     |
|              |           | asic | iers |      | ier |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
| January 1,   |           |      |      |      |     |       |     |
| 2004         |           |      |      |      |     |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
| Sample       | January   | 70.3 | 3.0  | 73.3 | 3   | 118.5 | 15  |
| groups       | 1, 2004   |      |      |      | 1.6 |       | 0.1 |
| combined     |           |      |      |      |     |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
|              | January   | 67.5 | 5.6  | 73.1 | 2   | 109.0 | 13  |
|              | 1, 2003   |      |      |      | 7.4 |       | 6.4 |
+--------------+-----------+------+------+------+-----+-------+-----+
|              | Percent   | 4.1% | -4   | 0.3% | 15  | 8.7%  | 10  |
|              | change    |      | 6.4% |      | .3% |       | .0% |
+--------------+-----------+------+------+------+-----+-------+-----+
| Source:      |           |      |      |      |     |       |     |
| Attachments  |           |      |      |      |     |       |     |
| 17 and 18.   |           |      |      |      |     |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+

39. Table 12 compares the number of channels by sample group as of
    January 1, 2004. The competitive group averaged 2.0 percent more
    analog channels and 5.6 percent more digital channels, compared to
    the noncompetitive group.

+--------------+-----------+------+------+------+-----+-------+-----+
| **Table 12** |           |      |      |      |     |       |     |
|              |           |      |      |      |     |       |     |
| **Number of  |           |      |      |      |     |       |     |
| Channels**   |           |      |      |      |     |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
| Sample Group | Date      | An   |      |      | D   |       |     |
|              |           | alog |      |      | igi |       |     |
|              |           | Chan |      |      | tal |       |     |
|              |           | nels |      |      | Ch  |       |     |
|              |           |      |      |      | ann |       |     |
|              |           |      |      |      | els |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
|              |           | B    | Prem | T    | Ma  | Pre   | To  |
|              |           | asic | ium, | otal | jor | mium, | tal |
|              |           | &    | Pay, |      | D   | Pay,  |     |
|              |           | Expa | &    |      | igi | &     |     |
|              |           | nded | Mini |      | tal | Mini  |     |
|              |           | B    | T    |      | T   | Tiers |     |
|              |           | asic | iers |      | ier |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
| Comparison   |           |      |      |      |     |       |     |
| between      |           |      |      |      |     |       |     |
| Sample       |           |      |      |      |     |       |     |
| Groups       |           |      |      |      |     |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
| Competitive  | January   | 72.5 | 2.2  | 74.7 | 3   | 123.8 | 15  |
| group        | 1, 2004   |      |      |      | 3.9 |       | 7.7 |
+--------------+-----------+------+------+------+-----+-------+-----+
| No           | January   | 70.1 | 3.1  | 73.2 | 3   | 118.0 | 14  |
| ncompetitive | 1, 2004   |      |      |      | 1.4 |       | 9.4 |
| group        |           |      |      |      |     |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
| Difference   | Percent   | 3.4% | -2   | 2.0% | 8   | 4.9%  | 5   |
| as of 1/1/04 | d         |      | 9.0% |      | .0% |       | .6% |
|              | ifference |      |      |      |     |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+
| Source:      |           |      |      |      |     |       |     |
| Attachments  |           |      |      |      |     |       |     |
| 17 and 18.   |           |      |      |      |     |       |     |
+--------------+-----------+------+------+------+-----+-------+-----+

40. Table 13 shows that as of January 1, 2004, cable operators offered
    an average of 17 local channels, with the noncompetitive and
    competitive groups offering the same number of channels. This total
    consists of 12.2 local broadcast stations; 2.7 public, educational,
    and governmental channels; 0.8 local leased access channels; and 1.3
    other channels of local origin.

+---------------+---+-------+---+--------+--------+--------+--------+--------+
| **Table 13**  |   |       |   |        |        |        |        |        |
|               |   |       |   |        |        |        |        |        |
| **Number of   |   |       |   |        |        |        |        |        |
| Local         |   |       |   |        |        |        |        |        |
| Channels On   |   |       |   |        |        |        |        |        |
| Basic &       |   |       |   |        |        |        |        |        |
| Expanded      |   |       |   |        |        |        |        |        |
| Basic**       |   |       |   |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+
| Sample Group  | L |       | P |        | Local  | Total  | Other  | Total  |
|               | o |       | u |        | Comm   | of     | Local  | Local  |
|               | c |       | b |        | ercial | Local  | Ch     | Ch     |
|               | a |       | l |        | Leased | Access | annels | annels |
|               | l |       | i |        | Access | Ch     |        |        |
|               | B |       | c |        |        | annels |        |        |
|               | r |       | , |        |        |        |        |        |
|               | o |       | E |        |        |        |        |        |
|               | a |       | d |        |        |        |        |        |
|               | d |       | u |        |        |        |        |        |
|               | c |       | c |        |        |        |        |        |
|               | a |       | a |        |        |        |        |        |
|               | s |       | t |        |        |        |        |        |
|               | t |       | i |        |        |        |        |        |
|               | S |       | o |        |        |        |        |        |
|               | t |       | n |        |        |        |        |        |
|               | a |       | a |        |        |        |        |        |
|               | t |       | l |        |        |        |        |        |
|               | i |       | , |        |        |        |        |        |
|               | o |       | & |        |        |        |        |        |
|               | n |       | G |        |        |        |        |        |
|               | s |       | o |        |        |        |        |        |
|               |   |       | v |        |        |        |        |        |
|               |   |       | e |        |        |        |        |        |
|               |   |       | r |        |        |        |        |        |
|               |   |       | n |        |        |        |        |        |
|               |   |       | m |        |        |        |        |        |
|               |   |       | e |        |        |        |        |        |
|               |   |       | n |        |        |        |        |        |
|               |   |       | t |        |        |        |        |        |
|               |   |       | a |        |        |        |        |        |
|               |   |       | l |        |        |        |        |        |
|               |   |       | A |        |        |        |        |        |
|               |   |       | c |        |        |        |        |        |
|               |   |       | c |        |        |        |        |        |
|               |   |       | e |        |        |        |        |        |
|               |   |       | s |        |        |        |        |        |
|               |   |       | s |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+
| January 1,    |   |       |   |        |        |        |        |        |
| 2004          |   |       |   |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+
| Sample groups |   | 12.2  |   | 2.7    | 0.8    | 3.5    | 1.3    | 16.9   |
| combined      |   |       |   |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+
| N             |   | 12.2  |   | 2.7    | 0.8    | 3.5    | 1.3    | 16.9   |
| oncompetitive |   |       |   |        |        |        |        |        |
| group         |   |       |   |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+
| Competitive   |   | 12.3  |   | 2.5    | 0.8    | 3.3    | 1.3    | 16.9   |
| group         |   |       |   |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+
| July 1, 1998  |   |       |   |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+
| Sample groups |   | 11.0  |   | n/a    | n/a    | 3.3    | n/a    | n/a    |
| combined      |   |       |   |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+
| N             |   | 12.2  |   | n/a    | n/a    | 3.3    | n/a    | n/a    |
| oncompetitive |   |       |   |        |        |        |        |        |
| group         |   |       |   |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+
| Competitive   |   | 11.0  |   | n/a    | n/a    | 2.7    | n/a    | n/a    |
| group         |   |       |   |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+
| *Source:*     |   |       |   |        |        |        |        |        |
| Attachment    |   |       |   |        |        |        |        |        |
| 19. PEG:      |   |       |   |        |        |        |        |        |
| Public,       |   |       |   |        |        |        |        |        |
| educational,  |   |       |   |        |        |        |        |        |
| and           |   |       |   |        |        |        |        |        |
| governmental  |   |       |   |        |        |        |        |        |
| access        |   |       |   |        |        |        |        |        |
| channels. n/a |   |       |   |        |        |        |        |        |
| \-- not       |   |       |   |        |        |        |        |        |
| available.    |   |       |   |        |        |        |        |        |
+---------------+---+-------+---+--------+--------+--------+--------+--------+

# Additional Analysis

41. In addition to comparing cable rates in areas with effective
    competition to those without, as defined by the statute, we have
    looked at other ways of measuring the impact of competition. One
    additional way is to examine whether consumers move to competitors
    in reaction to increases in cable rates. If they do, then
    competition should be a viable means of controlling cable rate
    increases. Commission staff recently examined this question using
    our cable price survey data. That study (Wise and Duwadi
    (2005))[^32] showed that consumers do react to cable rate increases
    if they are of a sufficient size. However, not surprisingly, there
    is some hesitancy among consumers to switch providers in reaction to
    modest price increases.

42. To evaluate the role that price changes play in consumers' decisions
    to switch providers, Wise and Duwadi examined DBS penetration,
    concentrating on how DBS penetration varies in relation to cable
    rate changes.[^33] Consumers can be expected to switch from cable to
    a comparable DBS service if cable prices rise relative to the price
    of DBS service. However, switching service providers is not costless
    to consumers. Both cable and DBS charge installation fees, and DBS
    charges for equipment in some cases. Additionally, there is the time
    and inconvenience required to research alternative services and to
    have one installed.[^34] DBS operators sometime offer long-term
    contracts in exchange for reduced installation or equipment fees and
    the long-term nature of these contracts often is viewed by the
    consumer as a cost of switching. Thus, the potential benefit
    consumers may gain by switching providers may be offset by these
    additional costs, which are called "switching costs."

43. Consumers will not switch between comparable products if they
    perceive the cost of switching to be greater than the differential
    in price. Wise and Duwadi found evidence that consumers switched
    from cable to DBS when faced with large cable rate increases, but
    not when faced with small increases. This finding indicates that
    consumers are switching to DBS in reaction to increases in cable
    rates. The study also indicates, however, that switching costs play
    an important role in consumers' decisions to change MVPDs and may
    limit or eliminate their willingness to switch providers where the
    price differential between cable and DBS is less than the perceived
    switching costs.[^35]

# Conclusion

44. Cable operators in the communities belonging to the noncompetitive
    group increased their monthly cable rates by 5.6 percent on average
    during the time period surveyed. Cable operators in the competitive
    group increased their monthly cable rates by 3.6 percent. Monthly
    cable rates for the competitive group were 7.3 percent lower on
    average than those for the noncompetitive group. The degree of
    difference varied by competitive subgroup. The highest differentials
    were associated with wireline overbuild competition.

# VII. administrative matters {#vii.-administrative-matters .unnumbered}

45. It is ORDERED that this Report be issued pursuant to authority
    contained in Section 623(k) of the Communications Act of 1934, as
    amended, 47 U.S.C. § 543(k).

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

    Secretary

+-------------------+-------+-------+-------+-------+-------+-------+
| **ATTACHMENT 1**  |       |       |       |       |       |       |
|                   |       |       |       |       |       |       |
| **Cable           |       |       |       |       |       |       |
| Communities**     |       |       |       |       |       |       |
|                   |       |       |       |       |       |       |
| **in the Survey** |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Sample Groups & | **N   | **M   | **N   | **Pe  | **N   | **N   |
| Subgroups of      | umber | edian | umber | rcent | umber | umber |
| Cable             | of    | N     | of    | of    | of    | of    |
| Communities**     | Cable | umber | Cable | S     | C     | S     |
|                   | Syst  | of    | Com   | ubscr | ommun | urvey |
|                   | ems** | Sub   | munit | ibers | ities | R     |
|                   |       | scrib | ies** | Na    | Samp  | espon |
|                   |       | ers** |       | tionw | led** | ses** |
|                   |       |       |       | ide** |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| \(A\)             | \(B\) | \(C\) | \(D\) | \(E\) | \(F\) | \(G\) |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Sample          | **8,  | **73, | **33, | **1   | **    | **    |
| Universe**        | 859** | 366** | 507** | 00%** | 665** | 641** |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Noncompetitive  | **8,  | **78, | **32, | **92. | **    | **    |
| Communities**     | 793** | 475** | 510** | 07%** | 415** | 406** |
+-------------------+-------+-------+-------+-------+-------+-------+
| Large systems     | 312   | 13    | 7,178 | 5     | 225   | 223   |
|                   |       | 9,312 |       | 1.75% |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| Medium systems    | 728   | 3     | 8,176 | 2     | 127   | 126   |
|                   |       | 8.737 |       | 6.98% |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| Small systems     | 7,753 | 6,383 | 1     | 1     | 63    | 57    |
|                   |       |       | 7,156 | 3.34% |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| **Competitive     | **    | **41, | **    | **7.  | **    | **    |
| Communities**     | 296** | 116** | 997** | 93%** | 250** | 235** |
+-------------------+-------+-------+-------+-------+-------+-------+
| Wireline          | 56    | 5     | 122   | 2.51% | 66    | 65    |
| competition:      |       | 6,362 |       |       |       |       |
| incumbents        |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| Wireline          | 33    | 2     | 114   | 0.58% | 58    | 50    |
| competition:      |       | 1,696 |       |       |       |       |
| rivals            |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| DBS competition   | 117   | 3     | 474   | 2.35% | 56    | 52    |
|                   |       | 7,515 |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| Wireless          | 25    | 17    | 175   | 2.14% | 30    | 29    |
| competition       |       | 4,918 |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| Low penetration   | 65    | 7,234 | 112   | 0.35% | 40    | 39    |
| test              |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
|                   |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+
| *Source:* Survey. |       |       |       |       |       |       |
+-------------------+-------+-------+-------+-------+-------+-------+

Notes \--

Column A divides cable communities, as defined by FCC-assigned CUID
identifiers, into two groups: (1) communities where operators do not
face effective competition (noncompetitive group); and (2) communities
where operators are deemed to face effective competition (competitive
group). The noncompetitive group is subdivided by size of the cable
system serving the community, and the competitive group is subdivided by
category of competition. Wireline competition is further divided into
subscribers of incumbent cable operators (that petitioned for effective
competition status) and subscribers of rival cable-overbuild operators
that compete with the incumbents.

Column B is the number of cable systems, as defined by FCC-assigned PSID
identifiers, where each cable system may serve more than one cable
community. The number of systems in the sample universe is lower than
the number derived by adding together the noncompetitive and competitive
communities, because some cable systems serve both noncompetitive and
competitive communities and are, therefore, counted twice in this table.

Column C shows the median size of systems in each group and subgroup,
calculated from Survey data. The median is the number of subscribers for
the system in the middle, where half the systems have fewer subscribers
and half the systems have more subscribers. The competitive group median
is derived by summing the medians of the competitive subgroups after
weighting each subgroup by the percentages in Column E. The sample
universe median is derived by summing the medians of the noncompetitive
group and competitive group after weighting each of those groups by the
percentages in Column E.

Column D is the number of cable communities. (Cable systems in Column A
may serve more than one community).

Column E is an estimate of cable subscribers in each group and subgroup
as a percent of the sample universe total. These percents are the
weights used to derive weighted averages of the Survey data for the
competitive group, and for the noncompetitive and competitive groups
combined.

Column F is the number of communities sampled.

Column G is the number of communities sampled for which cable operators
returned a Survey questionnaire.

+-----------------+------------+-----------+---+-----------+------+------+
| **ATTACHMENT    |            |           |   |           |      |      |
| 2**             |            |           |   |           |      |      |
|                 |            |           |   |           |      |      |
| **Monthly Cable |            |           |   |           |      |      |
| Rates**         |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Service       | **Weighted | **Sample  |   |           | **Di |      |
| Elements**      | Average of | Groups**  |   |           | ffer |      |
|                 | Sample     |           |   |           | ence |      |
|                 | Groups**   |           |   |           | Bet  |      |
|                 |            |           |   |           | ween |      |
|                 |            |           |   |           | Sa   |      |
|                 |            |           |   |           | mple |      |
|                 |            |           |   |           | Grou |      |
|                 |            |           |   |           | ps** |      |
+-----------------+------------+-----------+---+-----------+------+------+
|                 |            | **Noncomp | * |           | **D  | **P  |
|                 |            | etitive** | * |           | olla | erce |
|                 |            |           | C |           | rs** | nt** |
|                 |            |           | o |           |      |      |
|                 |            |           | m |           |      |      |
|                 |            |           | p |           |      |      |
|                 |            |           | e |           |      |      |
|                 |            |           | t |           |      |      |
|                 |            |           | i |           |      |      |
|                 |            |           | t |           |      |      |
|                 |            |           | i |           |      |      |
|                 |            |           | v |           |      |      |
|                 |            |           | e |           |      |      |
|                 |            |           | * |           |      |      |
|                 |            |           | * |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Jan. 1,       |            |           |   |           |      |      |
| 2004**          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Basic         | *          | **        |   | **        | -\$  | -    |
| Service**       | *\$13.80** | \$13.73** |   | \$14.58** | 0.85 | 5.8% |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.33*     | *0.29*    |   | *0.72*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Expanded      | *          | **        |   | **        | \$   | 1    |
| basic service** | *\$27.24** | \$27.56** |   | \$23.59** | 3.97 | 6.8% |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.43*     | *0.38*    |   | *1.01*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Programming   | *          | **        |   | **        | \$   | 8.2% |
| total**         | *\$41.04** | \$41.29** |   | \$38.17** | 3.12 |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.26*     | *0.21*    |   | *0.78*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Converter &   | **\$4.28** | *         |   | *         | -\$  | -    |
| remote          |            | *\$4.27** |   | *\$4.31** | 0.04 | 0.1% |
| control**       |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.12*     | *0.11*    |   | *0.30*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Programming & | *          | **        |   | **        | \$   | 7.3% |
| equipment**     | *\$45.32** | \$45.56** |   | \$42.48** | 3.08 |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.30*     | *0.26*    |   | *0.86*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Jan. 1,       |            |           |   |           |      |      |
| 2003**          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Basic         | *          | **        |   | **        | -\$  | -    |
| service**       | *\$13.45** | \$13.38** |   | \$14.25** | 0.87 | 6.1% |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.33*     | *0.29*    |   | *0.74*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Expanded      | *          | **        |   | **        | \$   | 1    |
| basic service** | *\$25.50** | \$25.73** |   | \$22.61** | 3.12 | 3.8% |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.42*     | *0.36*    |   | *1.03*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Programming   | *          | **        |   | **        | \$   | 6.1% |
| total**         | *\$38.95** | \$39.11** |   | \$36.86** | 2.25 |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.25*     | *0.21*    |   | *0.75*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Converter &   | **\$4.04** | *         |   | *         | \$   | -    |
| remote          |            | *\$4.03** |   | *\$4.13** | 0.29 | 2.4% |
| control**       |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.12*     | *0.10*    |   | *0.29*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Programming & | *          | **        |   | **        | \$   | 5.2% |
| equipment**     | *\$42.99** | \$43.14** |   | \$40.99** | 2.15 |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.29*     | *0.24*    |   | *0.81*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Jan. 1,       |            |           |   |           |      |      |
| 2002**          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Basic         | *          | **        |   | **        | -\$  | -    |
| Service**       | *\$13.11** | \$13.06** |   | \$13.70** | 0.64 | 4.7% |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.32*     | *0.29*    |   | *0.70*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Expanded      | *          | **        |   | **        | \$   | 8.3% |
| basic service** | *\$23.01** | \$23.15** |   | \$21.36** | 1.79 |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.40*     | *0.35*    |   | *1.00*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Programming   | *          | **        |   | **        | \$   | 3.4% |
| total**         | *\$36.12** | \$36.21** |   | \$35.06** | 1.15 |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.24*     | *0.20*    |   | *0.72*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Converter &   | **\$3.77** | *         |   | *         | \$   | 2.8% |
| remote          |            | *\$3.77** |   | *\$3.88** | 0.11 |      |
| control**       |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.11*     | *009*     |   | *0.27*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Programming & | *          | **        |   | **        | \$   | 2.7% |
| equipment**     | *\$39.89** | \$39.98** |   | \$38.94** | 1.04 |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.29*     | *0.23*    |   | *0.79*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Source:*       |            |           |   |           |      |      |
| Survey.         |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+

+-----------------+------------+-----------+---+-----------+------+------+
| **ATTACHMENT    |            |           |   |           |      |      |
| 3**             |            |           |   |           |      |      |
|                 |            |           |   |           |      |      |
| **Number of     |            |           |   |           |      |      |
| Channels**      |            |           |   |           |      |      |
|                 |            |           |   |           |      |      |
| **And Price per |            |           |   |           |      |      |
| Channel**       |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Service       | **Weighted | **Sample  |   |           | **Di |      |
| Elements**      | Average of | Groups**  |   |           | ffer |      |
|                 | Sample     |           |   |           | ence |      |
|                 | Groups**   |           |   |           | Bet  |      |
|                 |            |           |   |           | ween |      |
|                 |            |           |   |           | Sa   |      |
|                 |            |           |   |           | mple |      |
|                 |            |           |   |           | Grou |      |
|                 |            |           |   |           | ps** |      |
+-----------------+------------+-----------+---+-----------+------+------+
|                 |            | **Noncomp | * |           | **   | **P  |
|                 |            | etitive** | * |           | Doll | erce |
|                 |            |           | C |           | ar** | nt** |
|                 |            |           | o |           |      |      |
|                 |            |           | m |           |      |      |
|                 |            |           | p |           |      |      |
|                 |            |           | e |           |      |      |
|                 |            |           | t |           |      |      |
|                 |            |           | i |           |      |      |
|                 |            |           | t |           |      |      |
|                 |            |           | i |           |      |      |
|                 |            |           | v |           |      |      |
|                 |            |           | e |           |      |      |
|                 |            |           | * |           |      |      |
|                 |            |           | * |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Jan. 1,       |            |           |   |           |      |      |
| 2004**          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Basic service | **25.7**   | **25.7**  |   | **25.2**  | 0.5  | 2.0% |
| channels**      |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.6*      | *0.5*     |   | *1.4*     |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Expanded      | **44.6**   | **44.4**  |   | **47.3**  | -2.9 | -    |
| basic           |            |           |   |           |      | 6.1% |
| channels**      |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.7*      | *0.7*     |   | *1.7*     |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Channels      | **70.3**   | **70.1**  |   | **72.5**  | -2.4 | -    |
| total**         |            |           |   |           |      | 3.3% |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.6*      | *0.55*    |   | *0.86*    |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Price per     | *          | **        |   | **        | \$0  | 1    |
| channel**       | *\$0.660** | \$0.665** |   | \$0.599** | .066 | 1.0% |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.007*    | *0.006*   |   | *0.016*   |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Jan. 1,       |            |           |   |           |      |      |
| 2003**          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Basic service | **24.4**   | **24.4**  |   | **24.7**  | -0.3 | -    |
| channels**      |            |           |   |           |      | 1.2% |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.6*      | *0.5*     |   | *1.3*     |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Expanded      | **43.1**   | **42.9**  |   | **45.0**  | -2.1 | -    |
| basic           |            |           |   |           |      | 4.7% |
| channels**      |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.7*      | *0.6*     |   | *1.8*     |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Channels      | **67.5**   | **67.3**  |   | **69.7**  | -2.4 | -    |
| total**         |            |           |   |           |      | 3.4% |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.6*      | *0.5*     |   | *0.9*     |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| **Price per     | *          | **        |   | **        | \$0  | 5.2% |
| channel**       | *\$0.652** | \$0.657** |   | \$0.601** | .031 |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Standard       | *0.007*    | *0.006*   |   | *0.016*   |      |      |
| error*          |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+
| *Source:*       |            |           |   |           |      |      |
| Survey.         |            |           |   |           |      |      |
+-----------------+------------+-----------+---+-----------+------+------+

<table style="width:100%;">
<colgroup>
<col style="width: 17%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="12"><p><strong>ATTACHMENT 4</strong></p>
<p><strong>Averages for Basic and Expanded Basic Service, 1995 –
2004</strong></p>
<p><strong>Monthly Rates in Dollars, and Number of Channels</strong></p>
<p><strong>in Comparison to Consumer Price Index</strong></p></td>
</tr>
<tr class="even">
<td><strong>Service Elements</strong></td>
<td><strong>July 1995</strong></td>
<td><strong>July 1996</strong></td>
<td><strong>July 1997</strong></td>
<td><strong>July 1998</strong></td>
<td><strong>July 1999</strong></td>
<td><strong>July 2000</strong></td>
<td><strong>July 2001</strong></td>
<td><p><strong>Jan.</strong></p>
<p><strong>2002</strong></p></td>
<td><strong>Jan. 2003</strong></td>
<td><strong>Jan. 2004</strong></td>
<td><strong>5-Year Average Change *</strong></td>
</tr>
<tr class="odd">
<td colspan="12"><strong>Weighted Average of Sample Groups</strong></td>
</tr>
<tr class="even">
<td><strong>Basic service</strong></td>
<td>---</td>
<td>---</td>
<td>11.57</td>
<td>12.00</td>
<td>12.47</td>
<td>12.57</td>
<td>12.84</td>
<td>13.11</td>
<td>13.45</td>
<td>13.80</td>
<td>2.6%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>2.6%</td>
<td>2.6%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>Expanded basic</strong></td>
<td>---</td>
<td>---</td>
<td>14.49</td>
<td>15.77</td>
<td>16.93</td>
<td>18.88</td>
<td>20.91</td>
<td>23.01</td>
<td>25.50</td>
<td>27.24</td>
<td>10.4%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>10.8%</td>
<td>6.8%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>Programming</strong></td>
<td>---</td>
<td>---</td>
<td>26.06</td>
<td>27.77</td>
<td>29.40</td>
<td>31.45</td>
<td>33.75</td>
<td>36.12</td>
<td>38.95</td>
<td>41.04</td>
<td>7.4%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td></td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>7.8%</td>
<td>5.4%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>Equipment</strong></td>
<td>---</td>
<td>---</td>
<td>2.42</td>
<td>2.65</td>
<td>2.74</td>
<td>2.97</td>
<td>3.24</td>
<td>3.77</td>
<td>4.04</td>
<td>4.28</td>
<td>9.1%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td></td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>7.2%</td>
<td>5.9%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>Total</strong></td>
<td>24.34</td>
<td>26.16</td>
<td>28.48</td>
<td>30.42</td>
<td>32.14</td>
<td>34.42</td>
<td>36.99</td>
<td>39.89</td>
<td>42.99</td>
<td>45.32</td>
<td>7.5%</td>
</tr>
<tr class="odd">
<td>Annual % Change</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>7.8%</td>
<td>5.4%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>No. of channels</strong></td>
<td>43.6</td>
<td>46.3</td>
<td>48.2</td>
<td>50.3</td>
<td>52.4</td>
<td>56.3</td>
<td>59.4</td>
<td>---</td>
<td>67.5</td>
<td>70.3</td>
<td>6.3%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>4.1%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>Price per channel</strong></td>
<td>0.604</td>
<td>0.618</td>
<td>0.635</td>
<td>0.645</td>
<td>0.64</td>
<td>0.647</td>
<td>0.658</td>
<td>---</td>
<td>0.65</td>
<td>0.66</td>
<td>0.4%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>1.2%</td>
<td>---</td>
</tr>
<tr class="even">
<td colspan="12"><strong>Consumer Price Index (CPI)</strong></td>
</tr>
<tr class="odd">
<td><strong>CPI</strong></td>
<td>161.1</td>
<td>165.5</td>
<td>169.5</td>
<td>173.3</td>
<td>176.9</td>
<td>181.3</td>
<td>186.2</td>
<td>190.3</td>
<td>191.8</td>
<td>194.0</td>
<td>2.1%</td>
</tr>
<tr class="even">
<td>Annual Change</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>0.8%</td>
<td>1.1%</td>
<td>---</td>
</tr>
<tr class="odd">
<td><strong>Cable CPI</strong></td>
<td>201.1</td>
<td>214.9</td>
<td>231.1</td>
<td>246.5</td>
<td>255.4</td>
<td>267.3</td>
<td>279.7</td>
<td>297.3</td>
<td>303.6</td>
<td>315.2</td>
<td>4.6%</td>
</tr>
<tr class="even">
<td>Annual Change</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>2.1%</td>
<td>3.8%</td>
<td>---</td>
</tr>
</tbody>
</table>

\* Refers to the compounded annual rate of change during the five and
one-half year period starting July 1, 1998 and ending on January 1,
2004. \*\* The annual percent change based on results from the Survey.

*Sources:* Years 2002, 2003, and 2004 are results from the Survey. Years
1995 through 2001 are from previous cable price surveys including:
*Statistical Report on Average Rates for Basic Service, Cable
Programming Service, and Equipment,* 18 FCC Rcd 13284 (2003); 17 FCC Rcd
6301 (2002); 16 FCC Rcd 4346 (2001); 15 FCC Rcd 10927 (2000); 14 FCC Rcd
8331 (1999); 12 FCC Rcd 22756 (1997); and 12 FCC Rcd 3239 (1997). CPI
information: Bureau of Labor Statistics, All Urban Consumers, U.S. City
Average (data extracted August 17, 2004), Series ID CUUR0000SA0, All
Items Less Food and Energy, Base Period 1982-84=100 (CPI); Series ID
CUUR0000SERA02, Cable and Satellite Television and Radio Service, Base
Period December 1983=100 (Cable CPI).

<table style="width:100%;">
<colgroup>
<col style="width: 17%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="12"><p><strong>ATTACHMENT 5</strong></p>
<p><strong>Averages for Basic and Expanded Basic Service, 1995 –
2004</strong></p>
<p><strong>Monthly Rates in Dollars, and Number of Channels</strong></p>
<p><strong>by Sample Group</strong></p></td>
</tr>
<tr class="even">
<td><strong>Service Elements</strong></td>
<td><strong>July 1995</strong></td>
<td><strong>July 1996</strong></td>
<td><strong>July 1997</strong></td>
<td><strong>July 1998</strong></td>
<td><strong>July 1999</strong></td>
<td><strong>July 2000</strong></td>
<td><strong>July 2001</strong></td>
<td><p><strong>Jan.</strong></p>
<p><strong>2002</strong></p></td>
<td><strong>Jan. 2003</strong></td>
<td><strong>Jan. 2004</strong></td>
<td><strong>5-Year Average Change *</strong></td>
</tr>
<tr class="odd">
<td colspan="12"><strong>Noncompetitive Group</strong></td>
</tr>
<tr class="even">
<td><strong>Basic service</strong></td>
<td>---</td>
<td>---</td>
<td>11.63</td>
<td>12.06</td>
<td>12.55</td>
<td>12.62</td>
<td>12.87</td>
<td>13.06</td>
<td>13.38</td>
<td>13.73</td>
<td>2.4%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>2.5%</td>
<td>2.6%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>Expanded basic</strong></td>
<td>---</td>
<td>---</td>
<td>14.51</td>
<td>15.82</td>
<td>16.97</td>
<td>18.95</td>
<td>21.02</td>
<td>23.15</td>
<td>25.73</td>
<td>27.56</td>
<td>10.6%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>11.1%</td>
<td>7.1%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>Programming</strong></td>
<td>---</td>
<td>---</td>
<td>26.14</td>
<td>27.88</td>
<td>29.52</td>
<td>31.57</td>
<td>33.89</td>
<td>36.21</td>
<td>39.11</td>
<td>41.29</td>
<td>7.4%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>8.0%</td>
<td>5.6%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>Equipment</strong></td>
<td>---</td>
<td>---</td>
<td>2.42</td>
<td>2.65</td>
<td>2.73</td>
<td>2.97</td>
<td>3.24</td>
<td>3.77</td>
<td>4.03</td>
<td>4.27</td>
<td>9.1%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>6.9%</td>
<td>6.0%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>Total</strong></td>
<td>24.43</td>
<td>26.21</td>
<td>28.56</td>
<td>30.53</td>
<td>32.25</td>
<td>34.54</td>
<td>37.13</td>
<td>39.98</td>
<td>43.14</td>
<td>45.56</td>
<td>7.5%</td>
</tr>
<tr class="odd">
<td>Annual % Change</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>7.9%</td>
<td>5.6%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>No. of channels</strong></td>
<td>44.0</td>
<td>46.1</td>
<td>47.9</td>
<td>50.1</td>
<td>52.0</td>
<td>56.2</td>
<td>59.2</td>
<td>---</td>
<td>67.3</td>
<td>70.1</td>
<td>6.3%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>4.2%</td>
<td>---</td>
</tr>
<tr class="even">
<td><strong>Price per channel</strong></td>
<td>0.600</td>
<td>0.620</td>
<td>0.640</td>
<td>0.650</td>
<td>0.650</td>
<td>0.650</td>
<td>0.661</td>
<td>---</td>
<td>0.657</td>
<td>0.665</td>
<td>0.4%</td>
</tr>
<tr class="odd">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>1.2%</td>
<td>---</td>
</tr>
<tr class="even">
<td colspan="12"><strong>Competitive Group</strong></td>
</tr>
<tr class="odd">
<td><strong>Basic service</strong></td>
<td>---</td>
<td>---</td>
<td>10.69</td>
<td>11.12</td>
<td>11.34</td>
<td>11.95</td>
<td>12.43</td>
<td>13.70</td>
<td>14.25</td>
<td>14.58</td>
<td>5.0%</td>
</tr>
<tr class="even">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>4.0%</td>
<td>2.3%</td>
<td>---</td>
</tr>
<tr class="odd">
<td><strong>Expanded basic</strong></td>
<td>---</td>
<td>---</td>
<td>14.11</td>
<td>15.00</td>
<td>16.44</td>
<td>17.41</td>
<td>19.23</td>
<td>21.36</td>
<td>22.61</td>
<td>23.59</td>
<td>8.6%</td>
</tr>
<tr class="even">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>5.9%</td>
<td>4.3%</td>
<td>---</td>
</tr>
<tr class="odd">
<td><strong>Programming</strong></td>
<td>---</td>
<td>---</td>
<td>24.80</td>
<td>26.12</td>
<td>27.78</td>
<td>29.59</td>
<td>31.66</td>
<td>35.06</td>
<td>36.86</td>
<td>38.17</td>
<td>7.1%</td>
</tr>
<tr class="even">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>5.1%</td>
<td>3.6%</td>
<td>---</td>
</tr>
<tr class="odd">
<td><strong>Equipment</strong></td>
<td>---</td>
<td>---</td>
<td>2.35</td>
<td>2.59</td>
<td>2.85</td>
<td>2.90</td>
<td>3.27</td>
<td>3.88</td>
<td>4.13</td>
<td>4.31</td>
<td>9.7%</td>
</tr>
<tr class="even">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>6.4%</td>
<td>4.4%</td>
<td>---</td>
</tr>
<tr class="odd">
<td><strong>Total</strong></td>
<td>22.88</td>
<td>25.42</td>
<td>27.15</td>
<td>28.71</td>
<td>30.63</td>
<td>32.49</td>
<td>34.93</td>
<td>38.94</td>
<td>40.99</td>
<td>42.48</td>
<td>7.4%</td>
</tr>
<tr class="even">
<td>Annual % Change</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>5.3%</td>
<td>3.6%</td>
<td>---</td>
</tr>
<tr class="odd">
<td><strong>No. of channels</strong></td>
<td>38</td>
<td>48.8</td>
<td>53.2</td>
<td>54</td>
<td>57.6</td>
<td>57.5</td>
<td>60.9</td>
<td>---</td>
<td>69.7</td>
<td>72.5</td>
<td>5.5%</td>
</tr>
<tr class="even">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>4.0%</td>
<td>---</td>
</tr>
<tr class="odd">
<td><strong>Price per channel</strong></td>
<td>0.670</td>
<td>0.580</td>
<td>0.550</td>
<td>0.570</td>
<td>0.570</td>
<td>0.605</td>
<td>0.608</td>
<td>---</td>
<td>0.601</td>
<td>0.599</td>
<td>0.9%</td>
</tr>
<tr class="even">
<td>Annual Change **</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>---</td>
<td>-0.3%</td>
<td>---</td>
</tr>
</tbody>
</table>

\* Refers to the compounded annual rate of change during the five and
one-half year period starting July 1, 1998 and ending on January 1,
2004. \*\* The annual percent change based on results from the Survey.

*Source:* Years 2002, 2003, and 2004 are results from the Survey: Years
1995 through 2001 are from previous cable price surveys including
*Statistical Report on Average Rates for Basic Service, Cable
Programming Service, and Equipment,* 18 FCC Rcd 13284 (2003); 17 FCC Rcd
6301 (2002); 16 FCC Rcd 4346 (2001); 15 FCC Rcd 10927 (2000); 14 FCC Rcd
8331 (1999); 12 FCC Rcd 22756 (1997); and 12 FCC Rcd 3239 (1997).

+-------------+---------+----------+----------+----------+----------+
| *           |         |          |          |          |          |
| *ATTACHMENT |         |          |          |          |          |
| 6**         |         |          |          |          |          |
|             |         |          |          |          |          |
| *           |         |          |          |          |          |
| *Comparison |         |          |          |          |          |
| between     |         |          |          |          |          |
| Non         |         |          |          |          |          |
| competitive |         |          |          |          |          |
| Group**     |         |          |          |          |          |
|             |         |          |          |          |          |
| **and       |         |          |          |          |          |
| Competitive |         |          |          |          |          |
| Subgroups** |         |          |          |          |          |
|             |         |          |          |          |          |
| **January   |         |          |          |          |          |
| 1, 2004**   |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Service   | **      | **Com    |          |          |          |
| Elements**  | Noncomp | petitive |          |          |          |
|             | etitive | Sub      |          |          |          |
|             | Group** | groups** |          |          |          |
+-------------+---------+----------+----------+----------+----------+
|             |         | **DBS    | **Low    | **       | **       |
|             |         | \***     | Penet    | Wireline | Wireless |
|             |         |          | ration** | Ove      | O        |
|             |         |          |          | rbuild** | verbuild |
|             |         |          |          |          | \***     |
+-------------+---------+----------+----------+----------+----------+
| *           |         |          |          |          |          |
| *Averages** |         |          |          |          |          |
|             |         |          |          |          |          |
| **January   |         |          |          |          |          |
| 1, 2004**   |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Pr        | \$41.29 | \$40.37  | \$38.80  | \$35.13  | \$40.87  |
| ogramming** |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **          | \$4.27  | 3.57     | \$3.59   | \$4.24   | \$5.35   |
| Equipment** |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Monthly   | \$45.56 | \$43.94  | \$42.39  | \$39.37  | \$46.22  |
| cable       |         |          |          |          |          |
| rate**      |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Number of | 70.1    | 70.5     | 62.1     | 74.2     | 72.9     |
| channels**  |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Price per | \$0.665 | \$0.648  | \$0.705  | \$0.523  | \$0.636  |
| channel**   |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Percent   |         |          |          |          |          |
| Difference  |         |          |          |          |          |
| Between**   |         |          |          |          |          |
|             |         |          |          |          |          |
| **Non       |         |          |          |          |          |
| competitive |         |          |          |          |          |
| Compared to |         |          |          |          |          |
| Co          |         |          |          |          |          |
| mpetitive** |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Pr        | \-\--   | 2.3%     | 6.4%     | 17.5%    | 1.0%     |
| ogramming** |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **          | \-\--   | 19.6%    | 18.9%    | 0.7%     | -20.2%   |
| Equipment** |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Monthly   | \-\--   | 3.7%     | 7.5%     | 15.7%    | -1.0%    |
| cable       |         |          |          |          |          |
| rate**      |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Number of | \-\--   | -0.6%    | 12.8%    | -5.6%    | -1.4%    |
| channels**  |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Price per | \-\--   | 2.6%     | -5.7%    | 27.2%    | 4.6%     |
| channel**   |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Standard  |         |          |          |          |          |
| Error of    |         |          |          |          |          |
| Averages**  |         |          |          |          |          |
|             |         |          |          |          |          |
| **January   |         |          |          |          |          |
| 1, 2004**   |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Pr        | 0.21    | 0.86     | 0.89     | 0.59     | 0.66     |
| ogramming** |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **          | 0.10    | 0.23     | 0.42     | 0.19     | 0.22     |
| Equipment** |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Monthly   | 0.26    | 0.96     | 1.11     | 0.64     | 0.77     |
| cable       |         |          |          |          |          |
| rate**      |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Number of | 0.55    | 2.00     | 2.44     | 0.92     | 0.51     |
| channels**  |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| **Price per | 0.01    | 0.02     | 0.02     | 0.01     | 0.01     |
| channel**   |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+
| \* These    |         |          |          |          |          |
| averages    |         |          |          |          |          |
| include     |         |          |          |          |          |
| cable       |         |          |          |          |          |
| system      |         |          |          |          |          |
| prices in   |         |          |          |          |          |
| communities |         |          |          |          |          |
| with an     |         |          |          |          |          |
| Effective   |         |          |          |          |          |
| Competition |         |          |          |          |          |
| finding     |         |          |          |          |          |
| based on    |         |          |          |          |          |
| DBS or      |         |          |          |          |          |
| wireless    |         |          |          |          |          |
| c           |         |          |          |          |          |
| ompetition, |         |          |          |          |          |
| but not the |         |          |          |          |          |
| prices      |         |          |          |          |          |
| charged by  |         |          |          |          |          |
| the         |         |          |          |          |          |
| competing   |         |          |          |          |          |
| DBS or      |         |          |          |          |          |
| wireless    |         |          |          |          |          |
| system.     |         |          |          |          |          |
| *Source:*   |         |          |          |          |          |
| Survey.     |         |          |          |          |          |
+-------------+---------+----------+----------+----------+----------+

+----------------+-----------+-------+-------+-------+-------+-------+
| **Attachment   |           |       |       |       |       |       |
| 7**            |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **Monthly      |           |       |       |       |       |       |
| Cable Rates    |           |       |       |       |       |       |
| and Price Per  |           |       |       |       |       |       |
| Channel**      |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **by Sample    |           |       |       |       |       |       |
| Group and      |           |       |       |       |       |       |
| Subgroup**     |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **January 1,   |           |       |       |       |       |       |
| 2004**         |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | **Sta     | **    | **E   | **Mo  | **    | **    |
| Groups &       | tistics** | Basic | quipm | nthly | Basic | Price |
| Subgroups**    |           | &     | ent** | Cable | &     | Per   |
|                |           | Exp   |       | R     | Exp   | Chan  |
|                |           | anded |       | ate** | anded | nel** |
|                |           | Basic |       |       | Basic |       |
|                |           | Serv  |       |       | Chann |       |
|                |           | ice** |       |       | els** |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | Average   | *     | **\$4 | *     | **7   | *     |
| groups         |           | *\$41 | .28** | *\$45 | 0.3** | *\$0. |
| combined**     |           | .04** |       | .32** |       | 660** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | 641   | 641   | 641   | 641   | *641* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | 0.26  | 0.12  | 0.31  | 0.6   | *0    |
|                | error*    |       |       |       |       | .007* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **             | Average   | *     | **\$4 | *     | **7   | *     |
| Noncompetitive |           | *\$41 | .27** | *\$45 | 0.1** | *\$0. |
| group**        |           | .29** |       | .56** |       | 665** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | 406   | 406   | 406   | 406   | *406* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | 0.21  | 0.10  | 0.26  | 0.5   | *0    |
|                | error*    |       |       |       |       | .006* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Competitive  | Average   | *     | **\$4 | *     | **7   | *     |
| group**        |           | *\$38 | .31** | *\$42 | 2.5** | *\$0. |
|                |           | .17** |       | .48** |       | 599** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | 235   | 235   | 235   | 235   | *235* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | 0.78  | 0.27  | 0.88  | 1.3   | *0    |
|                | error*    |       |       |       |       | .016* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | *     | **\$4 | *     | **7   | *     |
| competition    |           | *\$34 | .24** | *\$38 | 4.9** | *\$0. |
|                |           | .56** |       | .80** |       | 523** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | 115   | 115   | 115   | 115   | *115* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | 0.79  | 0.27  | 0.88  | 1.2   | *0    |
|                | error*    |       |       |       |       | .014* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | *     | **\$4 | *     | **7   | *     |
| incumbent      |           | *\$34 | .52** | *\$38 | 5.3** | *\$0. |
|                |           | .15** |       | .67** |       | 518** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | 65    | 65    | 65    | 65    | *65*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | 0.77  | 0.28  | 0.85  | 1.1   | *0    |
|                | error*    |       |       |       |       | .013* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline rival | Average   | *     | **\$3 | *     | **7   | *     |
|                |           | *\$36 | .00** | *\$39 | 2.8** | *\$0. |
|                |           | .40** |       | .40** |       | 545** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | 50    | 50    | 50    | 50    | *50*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | 0.88  | 0.25  | 1.04  | 1.5   | *0    |
|                | error*    |       |       |       |       | .015* |
+----------------+-----------+-------+-------+-------+-------+-------+
| DBS            | Average   | *     | **\$3 | *     | **7   | *     |
| competition \* |           | *\$40 | .57** | *\$43 | 0.5** | *\$0. |
|                |           | .37** |       | .95** |       | 648** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | 52    | 52    | 52    | 52    | *52*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | 0.86  | 0.28  | 0.95  | 2.0   | *0    |
|                | error*    |       |       |       |       | .020* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireless       | Average   | *     | **\$5 | *     | **7   | *     |
| competition \* |           | *\$40 | .35** | *\$46 | 2.9** | *\$0. |
|                |           | .87** |       | .22** |       | 636** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | 29    | 29    | 29    | 29    | *29*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | 0.66  | 0.22  | 0.77  | 0.5   | *0    |
|                | error*    |       |       |       |       | .012* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Low            | Average   | *     | **\$3 | *     | **6   | *     |
| penetration    |           | *\$38 | .59** | *\$42 | 2.2** | *\$0. |
| test           |           | .80** |       | .39** |       | 705** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | 39    | 39    | 39    | 39    | *39*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | 0.89  | 0.42  | 1.08  | 2.4   | *0    |
|                | error*    |       |       |       |       | .020* |
+----------------+-----------+-------+-------+-------+-------+-------+
| \* These       |           |       |       |       |       |       |
| averages       |           |       |       |       |       |       |
| include cable  |           |       |       |       |       |       |
| system prices  |           |       |       |       |       |       |
| in communities |           |       |       |       |       |       |
| with an        |           |       |       |       |       |       |
| Effective      |           |       |       |       |       |       |
| Competition    |           |       |       |       |       |       |
| finding based  |           |       |       |       |       |       |
| on DBS or      |           |       |       |       |       |       |
| wireless       |           |       |       |       |       |       |
| competition,   |           |       |       |       |       |       |
| but not the    |           |       |       |       |       |       |
| prices charged |           |       |       |       |       |       |
| by the         |           |       |       |       |       |       |
| competing DBS  |           |       |       |       |       |       |
| or wireless    |           |       |       |       |       |       |
| system.        |           |       |       |       |       |       |
| *Source:*      |           |       |       |       |       |       |
| Survey.        |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+

+----------------+-----------+-------+-------+-------+-------+-------+
| **Attachment   |           |       |       |       |       |       |
| 8**            |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **Monthly      |           |       |       |       |       |       |
| Cable Rates    |           |       |       |       |       |       |
| and Price Per  |           |       |       |       |       |       |
| Channel**      |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **by Sample    |           |       |       |       |       |       |
| Group and      |           |       |       |       |       |       |
| Subgroup**     |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **January 1,   |           |       |       |       |       |       |
| 2003**         |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | **Sta     | **    | **E   | **Mo  | **    | **    |
| Groups &       | tistics** | Basic | quipm | nthly | Basic | Price |
| Subgroups**    |           | &     | ent** | Cable | &     | Per   |
|                |           | Exp   |       | R     | Exp   | Chan  |
|                |           | anded |       | ate** | anded | nel** |
|                |           | Basic |       |       | Basic |       |
|                |           | Serv  |       |       | Chann |       |
|                |           | ice** |       |       | els** |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | Average   | *     | **\$4 | *     | **6   | *     |
| groups         |           | *\$38 | .04** | *\$42 | 7.5** | *\$0. |
| combined**     |           | .95** |       | .99** |       | 652** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *641* | *641* | *641* | *641* | *641* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *0.6* | *0    |
|                | error*    | 0.25* | 0.11* | 0.29* |       | .007* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **             | Average   | *     | **\$4 | *     | **6   | *     |
| Noncompetitive |           | *\$39 | .03** | *\$43 | 7.3** | *\$0. |
| group**        |           | .11** |       | .14** |       | 657** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *406* | *406* | *406* | *406* | *406* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *0.5* | *0    |
|                | error*    | 0.21* | 0.09* | 0.25* |       | .006* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Competitive  | Average   | *     | **\$4 | *     | **6   | *     |
| group**        |           | *\$36 | .13** | *\$40 | 9.7** | *\$0. |
|                |           | .86** |       | .99** |       | 601** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *235* | *235* | *235* | *235* | *235* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *1.3* | *0    |
|                | error*    | 0.75* | 0.25* | 0.81* |       | .015* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | *     | **\$4 | *     | **7   | *     |
| competition    |           | *\$33 | .06** | *\$37 | 1.2** | *\$0. |
|                |           | .16** |       | .22** |       | 528** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *115* | *115* | *115* | *115* | *115* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *0.9* | *0    |
|                | error*    | 0.71* | 0.24* | 0.76* |       | .014* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | *     | **\$4 | *     | **7   | *     |
| incumbent      |           | *\$32 | .31** | *\$37 | 1.5** | *\$0. |
|                |           | .83** |       | .14** |       | 525** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *65*  | *65*  | *65*  | *65*  | *65*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *0.8* | *0    |
|                | error*    | 0.69* | 0.24* | 0.72* |       | .013* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline rival | Average   | *     | **\$2 | *     | **6   | *     |
|                |           | *\$34 | .91** | *\$37 | 9.9** | *\$0. |
|                |           | .63** |       | .54** |       | 543** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *50*  | *50*  | *50*  | *50*  | *50*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *1.5* | *0    |
|                | error*    | 0.81* | 0.25* | 0.94* |       | .015* |
+----------------+-----------+-------+-------+-------+-------+-------+
| DBS            | Average   | *     | **\$3 | *     | **6   | *     |
| competition \* |           | *\$38 | .37** | *\$42 | 7.7** | *\$0. |
|                |           | .96** |       | .32** |       | 651** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *52*  | *52*  | *52*  | *52*  | *52*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *2.0* | *0    |
|                | error*    | 0.90* | 0.26* | 0.96* |       | .020* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireless       | Average   | *     | **\$5 | *     | **7   | *     |
| competition \* |           | *\$39 | .19** | *\$45 | 1.2** | *\$0. |
|                |           | .84** |       | .02** |       | 635** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *29*  | *29*  | *29*  | *29*  | *29*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *0.7* | *0    |
|                | error*    | 0.61* | 0.21* | 0.67* |       | .012* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Low            | Average   | *     | **\$3 | *     | **6   | *     |
| penetration    |           | *\$37 | .39** | *\$40 | 0.1** | *\$0. |
| test           |           | .17** |       | .56** |       | 695** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *39*  | *39*  | *39*  | *39*  | *39*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *2.3* | *0    |
|                | error*    | 0.87* | 0.39* | 1.05* |       | .020* |
+----------------+-----------+-------+-------+-------+-------+-------+
| \* These       |           |       |       |       |       |       |
| averages       |           |       |       |       |       |       |
| include cable  |           |       |       |       |       |       |
| system prices  |           |       |       |       |       |       |
| in communities |           |       |       |       |       |       |
| with an        |           |       |       |       |       |       |
| Effective      |           |       |       |       |       |       |
| Competition    |           |       |       |       |       |       |
| finding based  |           |       |       |       |       |       |
| on DBS or      |           |       |       |       |       |       |
| wireless       |           |       |       |       |       |       |
| competition,   |           |       |       |       |       |       |
| but not the    |           |       |       |       |       |       |
| prices charged |           |       |       |       |       |       |
| by the         |           |       |       |       |       |       |
| competing DBS  |           |       |       |       |       |       |
| or wireless    |           |       |       |       |       |       |
| system.        |           |       |       |       |       |       |
| *Source:*      |           |       |       |       |       |       |
| Survey.        |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+

+----------------+-----------+-------+-------+-------+-------+-------+
| **Attachment   |           |       |       |       |       |       |
| 9**            |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **Monthly      |           |       |       |       |       |       |
| Cable Rates    |           |       |       |       |       |       |
| and Price Per  |           |       |       |       |       |       |
| Channel**      |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **by Sample    |           |       |       |       |       |       |
| Group and      |           |       |       |       |       |       |
| Subgroup**     |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **January 1,   |           |       |       |       |       |       |
| 2002**         |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | **Sta     | **    | **E   | **Mo  | **    | **    |
| Groups &       | tistics** | Basic | quipm | nthly | Basic | Price |
| Subgroups**    |           | &     | ent** | Cable | &     | Per   |
|                |           | Exp   |       | R     | Exp   | Chan  |
|                |           | anded |       | ate** | anded | nel** |
|                |           | Basic |       |       | Basic |       |
|                |           | Serv  |       |       | Chann |       |
|                |           | ice** |       |       | els** |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | Average   | *     | **\$3 | *     | *\    | *\    |
| groups         |           | *\$36 | .77** | *\$39 | -\--* | -\--* |
| combined**     |           | .12** |       | .89** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *641* | *641* | *641* | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.24* | 0.10* | 0.28* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **             | Average   | *     | **\$3 | *     | *\    | *\    |
| Noncompetitive |           | *\$36 | .77** | *\$39 | -\--* | -\--* |
| group**        |           | .21** |       | .97** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *406* | *406* | *406* | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.20* | 0.09* | 0.24* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Competitive  | Average   | *     | **\$3 | *     | *\    | *\    |
| group**        |           | *\$35 | .88** | *\$38 | -\--* | -\--* |
|                |           | .06** |       | .94** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *235* | *235* | *235* | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.72* | 0.23* | 0.79* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | *     | **\$3 | *     | *\    | *\    |
| competition    |           | *\$31 | .67** | *\$34 | -\--* | -\--* |
|                |           | .22** |       | .89** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *115* | *115* | *115* | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.66* | 0.21* | 0.73* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | *     | **\$3 | *     | *\    | *\    |
| incumbent      |           | *\$31 | .85** | *\$34 | -\--* | -\--* |
|                |           | .01** |       | .86** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *65*  | *65*  | *65*  | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.64* | 0.20* | 0.70* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline rival | Average   | *     | **\$2 | *     | *\    | *\    |
|                |           | *\$32 | .89** | *\$35 | -\--* | -\--* |
|                |           | .13** |       | .02** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *50*  | *50*  | *50*  | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.74* | 0.27* | 0.86* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| DBS            | Average   | *     | **\$3 | *     | **\-  | **\-  |
| competition \* |           | *\$36 | .57** | *\$40 | \--** | \--** |
|                |           | .72** |       | .29** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *52*  | *52*  | *52*  | *     | *     |
|                | rvations* |       |       |       | **\-\ | **\-\ |
|                |           |       |       |       | --*** | --*** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *     | *     |
|                | error*    | 0.85* | 0.27* | 0.91* | **\-\ | **\-\ |
|                |           |       |       |       | --*** | --*** |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireless       | Average   | *     | **\$4 | *     | **\-  | **\-  |
| competition \* |           | *\$38 | .64** | *\$43 | \--** | \--** |
|                |           | .80** |       | .44** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *29*  | *29*  | *29*  | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.67* | 0.19* | 0.73* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Low            | Average   | *     | **\$3 | *     | **\-  | **\-  |
| penetration    |           | *\$34 | .18** | *\$38 | \--** | \--** |
| test           |           | .95** |       | .12** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *39*  | *39*  | *39*  | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.81* | 0.39* | 0.99* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| \* These       |           |       |       |       |       |       |
| averages       |           |       |       |       |       |       |
| include cable  |           |       |       |       |       |       |
| system prices  |           |       |       |       |       |       |
| in communities |           |       |       |       |       |       |
| with an        |           |       |       |       |       |       |
| Effective      |           |       |       |       |       |       |
| Competition    |           |       |       |       |       |       |
| finding based  |           |       |       |       |       |       |
| on DBS or      |           |       |       |       |       |       |
| wireless       |           |       |       |       |       |       |
| competition,   |           |       |       |       |       |       |
| but not the    |           |       |       |       |       |       |
| prices charged |           |       |       |       |       |       |
| by the         |           |       |       |       |       |       |
| competing DBS  |           |       |       |       |       |       |
| or wireless    |           |       |       |       |       |       |
| system.        |           |       |       |       |       |       |
| *Source:*      |           |       |       |       |       |       |
| Survey.        |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+

+------------------+---------+-----+-------+--------+--------+--------+
| **Attachment     |         |     |       |        |        |        |
| 10**             |         |     |       |        |        |        |
|                  |         |     |       |        |        |        |
| **Change in      |         |     |       |        |        |        |
| Monthly Revenue  |         |     |       |        |        |        |
| and Operating    |         |     |       |        |        |        |
| Expense per      |         |     |       |        |        |        |
| Subscriber**     |         |     |       |        |        |        |
|                  |         |     |       |        |        |        |
| **Excluding      |         |     |       |        |        |        |
| Corporate        |         |     |       |        |        |        |
| Overhead and     |         |     |       |        |        |        |
| Capital          |         |     |       |        |        |        |
| Expenses**       |         |     |       |        |        |        |
|                  |         |     |       |        |        |        |
| **All Cable      |         |     |       |        |        |        |
| Services, 2002   |         |     |       |        |        |        |
| to 2003**        |         |     |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
| **Sample Groups  | **Stati | **  | **    | *      |        |        |
| & Subgroups**    | stics** | Rev | Total | *Basic |        |        |
|                  |         | enu | Oper  | &      |        |        |
|                  |         | e** | ating | Ex     |        |        |
|                  |         |     | Ex    | panded |        |        |
|                  |         |     | pense | Basic  |        |        |
|                  |         |     | \***  | Progr  |        |        |
|                  |         |     |       | amming |        |        |
|                  |         |     |       | as a   |        |        |
|                  |         |     |       | Com    |        |        |
|                  |         |     |       | ponent |        |        |
|                  |         |     |       | of     |        |        |
|                  |         |     |       | Ope    |        |        |
|                  |         |     |       | rating |        |        |
|                  |         |     |       | Exp    |        |        |
|                  |         |     |       | ense** |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  |         |     |       | **T    | **Sp   | **     |
|                  |         |     |       | otal** | orts** | News** |
+------------------+---------+-----+-------+--------+--------+--------+
| **Sample groups  | Average | \$5 | \     | \$1.10 | \$0.41 | \$0.06 |
| combined**       |         | .88 | $3.49 |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *Observ | *5  | *589* | *589*  | *589*  | *589*  |
|                  | ations* | 89* |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *S      | *0. | *     | *0.07* | *0.03* | *0.01* |
|                  | tandard | 37* | 0.24* |        |        |        |
|                  | error*  |     |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | 5%      | *   | **\$3 | **\$   | **\$   | **\$   |
|                  | Trimmed | *\$ | .24** | 1.06** | 0.39** | 0.05** |
|                  |         | 5.8 |       |        |        |        |
|                  |         | 8** |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
| **Noncompetitive | Average | \$5 | \     | \$1.09 | \$0.41 | \$0.06 |
| group**          |         | .92 | $3.50 |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *Observ | *3  | *376* | *376*  | *376*  | *376*  |
|                  | ations* | 76* |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *S      | *0. | *     | *0.06* | *0.02* | *0.01* |
|                  | tandard | 28* | 0.18* |        |        |        |
|                  | error*  |     |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | 5%      | *   | **\$3 | **\$   | **\$   | **\$   |
|                  | Trimmed | *\$ | .22** | 1.05** | 0.38** | 0.05** |
|                  |         | 5.9 |       |        |        |        |
|                  |         | 2** |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
| **Competitive    | Average | \$5 | \     | \$1.19 | \$0.42 | \$0.07 |
| group**          |         | .40 | $3.40 |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *Observ | *2  | *213* | *213*  | *213*  | *213*  |
|                  | ations* | 13* |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *S      | *1. | *     | *0.21* | *0.08* | *0.02* |
|                  | tandard | 37* | 0.93* |        |        |        |
|                  | error*  |     |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | 5%      | *   | **\$3 | **\$   | **\$   | **\$   |
|                  | Trimmed | *\$ | .48** | 1.21** | 0.44** | 0.07** |
|                  |         | 5.4 |       |        |        |        |
|                  |         | 3** |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
| Wireline         | Average | \$5 | \     | \$1.12 | \$0.38 | \$0.06 |
| competition      |         | .14 | $2.68 |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *Observ | *1  | *103* | *103*  | *103*  | *103*  |
|                  | ations* | 03* |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *S      | *1. | *     | *0.26* | *0.11* | *0.03* |
|                  | tandard | 67* | 1.07* |        |        |        |
|                  | error*  |     |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | 5%      | *   | **\$2 | **\$   | **\$   | **\$   |
|                  | Trimmed | *\$ | .77** | 1.22** | 0.44** | 0.06** |
|                  |         | 5.5 |       |        |        |        |
|                  |         | 5** |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
| DBS competition  | Average | \$8 | \     | \$1.62 | \$0.61 | \$0.14 |
| \*\*             |         | .34 | $5.61 |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *Observ | *   | *45*  | *45*   | *45*   | *45*   |
|                  | ations* | 45* |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *S      | *1. | *     | *0.20* | *0.06* | *0.03* |
|                  | tandard | 15* | 0.84* |        |        |        |
|                  | error*  |     |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | 5%      | *   | **\$5 | **\$   | **\$   | **\$   |
|                  | Trimmed | *\$ | .59** | 1.58** | 0.61** | 0.13** |
|                  |         | 8.0 |       |        |        |        |
|                  |         | 7** |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
| Wireless         | Average | \$2 | \     | \$0.81 | \$0.23 | \$0.02 |
| competition \*\* |         | .12 | $2.58 |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *Observ | *   | *29*  | *29*   | *29*   | *29*   |
|                  | ations* | 29* |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *S      | *1. | *     | *0.17* | *0.05* | *0.01* |
|                  | tandard | 16* | 0.61* |        |        |        |
|                  | error*  |     |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | 5%      | *   | **\$2 | **\$   | **\$   | **\$   |
|                  | Trimmed | *\$ | .49** | 0.79** | 0.22** | 0.02** |
|                  |         | 2.0 |       |        |        |        |
|                  |         | 7** |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
| Low penetration  | Average | \$7 | -\    | \$1.25 | \$0.55 | \$0.09 |
| test             |         | .96 | $0.14 |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *Observ | *   | *36*  | *36*   | *36*   | *36*   |
|                  | ations* | 36* |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | *S      | *1. | *     | *0.15* | *0.08* | *0.03* |
|                  | tandard | 43* | 2.19* |        |        |        |
|                  | error*  |     |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
|                  | 5%      | *   | **\$1 | **\$   | **\$   | **\$   |
|                  | Trimmed | *\$ | .52** | 1.26** | 0.53** | 0.06** |
|                  |         | 7.1 |       |        |        |        |
|                  |         | 0** |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+
| \* Operating     |         |     |       |        |        |        |
| Expense does not |         |     |       |        |        |        |
| include the      |         |     |       |        |        |        |
| following        |         |     |       |        |        |        |
| expenses:        |         |     |       |        |        |        |
| Corporate        |         |     |       |        |        |        |
| overhead,        |         |     |       |        |        |        |
| depreciation and |         |     |       |        |        |        |
| amortization,    |         |     |       |        |        |        |
| interest         |         |     |       |        |        |        |
| expense, losses  |         |     |       |        |        |        |
| from sale or     |         |     |       |        |        |        |
| disposition of   |         |     |       |        |        |        |
| property, and    |         |     |       |        |        |        |
| extraordinary    |         |     |       |        |        |        |
| expenses.        |         |     |       |        |        |        |
|                  |         |     |       |        |        |        |
| \*\* These       |         |     |       |        |        |        |
| averages include |         |     |       |        |        |        |
| cable system     |         |     |       |        |        |        |
| prices in        |         |     |       |        |        |        |
| communities with |         |     |       |        |        |        |
| an Effective     |         |     |       |        |        |        |
| Competition      |         |     |       |        |        |        |
| finding based on |         |     |       |        |        |        |
| DBS or wireless  |         |     |       |        |        |        |
| competition, but |         |     |       |        |        |        |
| not the prices   |         |     |       |        |        |        |
| charged by the   |         |     |       |        |        |        |
| competing DBS or |         |     |       |        |        |        |
| wireless system. |         |     |       |        |        |        |
|                  |         |     |       |        |        |        |
| *Source:*        |         |     |       |        |        |        |
| Survey.          |         |     |       |        |        |        |
+------------------+---------+-----+-------+--------+--------+--------+

+---------------------+---------------+---------+---------+----------+
| **Attachment 11**   |               |         |         |          |
|                     |               |         |         |          |
| **Service           |               |         |         |          |
| Installation        |               |         |         |          |
| Charges**           |               |         |         |          |
+---------------------+---------------+---------+---------+----------+
| **Sample Groups &   | **Statistic** | **      | **      | **Reco   |
| Subgroups**         |               | Service | Service | nnection |
|                     |               | Instal  | Instal  | of Cable |
|                     |               | lation: | lation: | S        |
|                     |               | Unwired | Pr      | ervice** |
|                     |               | Resi    | e-Wired |          |
|                     |               | dence** | Resi    |          |
|                     |               |         | dence** |          |
+---------------------+---------------+---------+---------+----------+
| **January 1, 2004   |               |         |         |          |
| \***                |               |         |         |          |
+---------------------+---------------+---------+---------+----------+
| **Sample groups     | Average       | **\$    | **\$    | **\      |
| combined**          |               | 45.03** | 31.25** | $28.60** |
+---------------------+---------------+---------+---------+----------+
|                     | *             | *641*   | *641*   | *641*    |
|                     | Observations* |         |         |          |
+---------------------+---------------+---------+---------+----------+
|                     | *Standard     | *0.49*  | *0.43*  | *0.40*   |
|                     | error*        |         |         |          |
+---------------------+---------------+---------+---------+----------+
| **Noncompetitive    | Average       | **\$    | **\$    | **\      |
| group**             |               | 45.19** | 31.24** | $28.71** |
+---------------------+---------------+---------+---------+----------+
|                     | *             | *406*   | *406*   | *406*    |
|                     | Observations* |         |         |          |
+---------------------+---------------+---------+---------+----------+
|                     | *Standard     | *0.43*  | *0.36*  | *0.36*   |
|                     | error*        |         |         |          |
+---------------------+---------------+---------+---------+----------+
| **Competitive       | Average       | **\$    | **\$    | **\      |
| group**             |               | 43.25** | 31.47** | $27.43** |
+---------------------+---------------+---------+---------+----------+
|                     | *             | *235*   | *235*   | *235*    |
|                     | Observations* |         |         |          |
+---------------------+---------------+---------+---------+----------+
|                     | *Standard     | *1.19*  | *1.30*  | *0.88*   |
|                     | error*        |         |         |          |
+---------------------+---------------+---------+---------+----------+
| Wireline            | Average       | **\$    | **\$    | **\      |
| competition         |               | 43.00** | 31.57** | $26.76** |
+---------------------+---------------+---------+---------+----------+
|                     | *             | *115*   | *115*   | *115*    |
|                     | Observations* |         |         |          |
+---------------------+---------------+---------+---------+----------+
|                     | *Standard     | *1.22*  | *1.31*  | *0.88*   |
|                     | error*        |         |         |          |
+---------------------+---------------+---------+---------+----------+
| Wireline incumbent  | Average       | **\$    | **\$    | **\      |
|                     |               | 44.40** | 31.16** | $26.66** |
+---------------------+---------------+---------+---------+----------+
|                     | *             | *65*    | *65*    | *65*     |
|                     | Observations* |         |         |          |
+---------------------+---------------+---------+---------+----------+
|                     | *Standard     | *0.71*  | *0.87*  | *0.66*   |
|                     | error*        |         |         |          |
+---------------------+---------------+---------+---------+----------+
| Wireline rival      | Average       | **\$    | **\$    | **\      |
|                     |               | 36.79** | 33.36** | $27.17** |
+---------------------+---------------+---------+---------+----------+
|                     | *             | *50*    | *50*    | *50*     |
|                     | Observations* |         |         |          |
+---------------------+---------------+---------+---------+----------+
|                     | *Standard     | *3.46*  | *3.28*  | *1.84*   |
|                     | error*        |         |         |          |
+---------------------+---------------+---------+---------+----------+
| DBS competition     | Average       | **\$    | **\$    | **\      |
| \*\*\*              |               | 41.20** | 32.41** | $29.36** |
+---------------------+---------------+---------+---------+----------+
|                     | *             | *52*    | *52*    | *52*     |
|                     | Observations* |         |         |          |
+---------------------+---------------+---------+---------+----------+
|                     | *Standard     | *1.28*  | *1.19*  | *0.84*   |
|                     | error*        |         |         |          |
+---------------------+---------------+---------+---------+----------+
| Wireless            | Average       | **\$    | **\$    | **\      |
| competition \*\*\*  |               | 45.58** | 29.73** | $25.80** |
+---------------------+---------------+---------+---------+----------+
|                     | *             | *29*    | *29*    | *29*     |
|                     | Observations* |         |         |          |
+---------------------+---------------+---------+---------+----------+
|                     | *Standard     | *0.86*  | *1.26*  | *0.74*   |
|                     | error*        |         |         |          |
+---------------------+---------------+---------+---------+----------+
| Low penetration     | Average       | **\$    | **\$    | **\      |
| test                |               | 45.04** | 34.90** | $30.34** |
+---------------------+---------------+---------+---------+----------+
|                     | *             | *39*    | *39*    | *39*     |
|                     | Observations* |         |         |          |
+---------------------+---------------+---------+---------+----------+
|                     | *Standard     | *2.42*  | *2.15*  | *1.99*   |
|                     | error*        |         |         |          |
+---------------------+---------------+---------+---------+----------+
| **July 1, 2002      |               |         |         |          |
| \*\***              |               |         |         |          |
+---------------------+---------------+---------+---------+----------+
| Sample groups       | Average       | \$41.30 | \$29.09 | \$26.03  |
| combined            |               |         |         |          |
+---------------------+---------------+---------+---------+----------+
| Noncompetitive      | Average       | \$41.85 | \$29.44 | \$26.28  |
| group               |               |         |         |          |
+---------------------+---------------+---------+---------+----------+
| Competitive group   | Average       | \$37.95 | \$27.23 | \$25.10  |
+---------------------+---------------+---------+---------+----------+
| \* *Source:*        |               |         |         |          |
| Survey.             |               |         |         |          |
|                     |               |         |         |          |
| \*\* From previous  |               |         |         |          |
| survey for          |               |         |         |          |
| comparison.         |               |         |         |          |
| *Source:* Survey    |               |         |         |          |
| *and* *Statistical  |               |         |         |          |
| Report on Average   |               |         |         |          |
| Rates for Basic     |               |         |         |          |
| Service, Cable      |               |         |         |          |
| Programming         |               |         |         |          |
| Service, and        |               |         |         |          |
| Equipment,* 17 FCC  |               |         |         |          |
| Rcd 6301 (2002).    |               |         |         |          |
|                     |               |         |         |          |
| \*\*\* These        |               |         |         |          |
| averages include    |               |         |         |          |
| cable system prices |               |         |         |          |
| in communities with |               |         |         |          |
| an Effective        |               |         |         |          |
| Competition finding |               |         |         |          |
| based on DBS or     |               |         |         |          |
| wireless            |               |         |         |          |
| competition, but    |               |         |         |          |
| not the prices      |               |         |         |          |
| charged by the      |               |         |         |          |
| competing DBS or    |               |         |         |          |
| wireless system.    |               |         |         |          |
+---------------------+---------------+---------+---------+----------+

+----------------+-----------+-------+-------+-------+-------+-------+
| **Attachment   |           |       |       |       |       |       |
| 12**           |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **Digital      |           |       |       |       |       |       |
| Television     |           |       |       |       |       |       |
| Service**      |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **Monthly      |           |       |       |       |       |       |
| Cable Rate &   |           |       |       |       |       |       |
| Price Per      |           |       |       |       |       |       |
| Channel**      |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **January 1,   |           |       |       |       |       |       |
| 2004**         |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | **St      | **    | **Di  | **Mo  | **Cha | **    |
| Groups &       | atistic** | Major | gital | nthly | nnels | Price |
| Subgroups**    |           | Di    | Conv  | Pr    | on    | Per   |
|                |           | gital | erter | ice** | Major | Di    |
|                |           | T     | &     |       | Di    | gital |
|                |           | ier** | R     |       | gital | Chan  |
|                |           |       | emote |       | T     | nel** |
|                |           |       | Cont  |       | ier** |       |
|                |           |       | rol** |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | Average   | *     | **\$5 | *     | **3   | *     |
| groups         |           | *\$10 | .33** | *\$16 | 1.6** | *\$0. |
| combined**     |           | .72** |       | .05** |       | 583** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *600* | *600* | *600* | *600* | *599* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *0.7* | *0    |
|                | error*    | 0.33* | 0.10* | 0.30* |       | .016* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **             | Average   | *     | **\$5 | *     | **3   | *     |
| Noncompetitive |           | *\$10 | .30** | *\$16 | 1.4** | *\$0. |
| group**        |           | .79** |       | .09** |       | 588** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *393* | *393* | *393* | *393* | *392* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *0.6* | *0    |
|                | error*    | 0.29* | 0.09* | 0.27* |       | .015* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Competitive  | Average   | **\$9 | **\$5 | *     | **3   | *     |
| group**        |           | .93** | .66** | *\$15 | 3.9** | *\$0. |
|                |           |       |       | .58** |       | 524** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *207* | *207* | *207* | *207* | *207* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *1.8* | *0    |
|                | error*    | 0.81* | 0.24* | 0.72* |       | .035* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | **\$9 | **\$5 | *     | **3   | *     |
| competition    |           | .96** | .68** | *\$15 | 3.8** | *\$0. |
|                |           |       |       | .64** |       | 513** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *99*  | *99*  | *99*  | *99*  | *99*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *1.4* | *0    |
|                | error*    | 0.61* | 0.22* | 0.58* |       | .029* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | **\$8 | **\$5 | *     | **3   | *     |
| incumbent      |           | .70** | .55** | *\$14 | 3.5** | *\$0. |
|                |           |       |       | .26** |       | 483** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *64*  | *64*  | *64*  | *64*  | *64*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *1.5* | *0    |
|                | error*    | 0.49* | 0.19* | 0.44* |       | .027* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline rival | Average   | *     | **\$6 | *     | **3   | *     |
|                |           | *\$15 | .24** | *\$21 | 5.0** | *\$0. |
|                |           | .54** |       | .78** |       | 645** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *35*  | *35*  | *35*  | *35*  | *35*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *1.3* | *0    |
|                | error*    | 1.11* | 0.38* | 1.21* |       | .037* |
+----------------+-----------+-------+-------+-------+-------+-------+
| DBS            | Average   | **\$9 | **\$5 | *     | **3   | *     |
| competition \* |           | .55** | .58** | *\$15 | 9.0** | *\$0. |
|                |           |       |       | .13** |       | 424** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *49*  | *49*  | *49*  | *49*  | *49*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *1.8* | *0    |
|                | error*    | 0.99* | 0.23* | 0.88* |       | .028* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireless       | Average   | *     | **\$5 | *     | **2   | *     |
| competition \* |           | *\$10 | .52** | *\$16 | 9.2** | *\$0. |
|                |           | .68** |       | .20** |       | 643** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *29*  | *29*  | *29*  | *29*  | *29*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *2.0* | *0    |
|                | error*    | 0.87* | 0.23* | 0.68* |       | .051* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Low            | Average   | **\$7 | **\$6 | *     | **2   | *     |
| penetration    |           | .49** | .78** | *\$14 | 9.1** | *\$0. |
| test           |           |       |       | .27** |       | 571** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *30*  | *30*  | *30*  | *30*  | *30*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *2.5* | *0    |
|                | error*    | 0.95* | 0.36* | 1.04* |       | .044* |
+----------------+-----------+-------+-------+-------+-------+-------+
| \* These       |           |       |       |       |       |       |
| averages       |           |       |       |       |       |       |
| include cable  |           |       |       |       |       |       |
| system prices  |           |       |       |       |       |       |
| in communities |           |       |       |       |       |       |
| with an        |           |       |       |       |       |       |
| Effective      |           |       |       |       |       |       |
| Competition    |           |       |       |       |       |       |
| finding based  |           |       |       |       |       |       |
| on DBS or      |           |       |       |       |       |       |
| wireless       |           |       |       |       |       |       |
| competition,   |           |       |       |       |       |       |
| but not the    |           |       |       |       |       |       |
| prices charged |           |       |       |       |       |       |
| by the         |           |       |       |       |       |       |
| competing DBS  |           |       |       |       |       |       |
| or wireless    |           |       |       |       |       |       |
| system.        |           |       |       |       |       |       |
| *Source:*      |           |       |       |       |       |       |
| Survey.        |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+

+----------------+-----------+-------+-------+-------+-------+-------+
| **Attachment   |           |       |       |       |       |       |
| 13**           |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **Digital      |           |       |       |       |       |       |
| Television     |           |       |       |       |       |       |
| Service**      |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **Monthly      |           |       |       |       |       |       |
| Cable Rate &   |           |       |       |       |       |       |
| Price Per      |           |       |       |       |       |       |
| Channel**      |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **January 1,   |           |       |       |       |       |       |
| 2003**         |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | **St      | **    | **Di  | **Mo  | **Cha | **    |
| Groups &       | atistic** | Major | gital | nthly | nnels | Price |
| Subgroups**    |           | Di    | Conv  | Pr    | on    | Per   |
|                |           | gital | erter | ice** | Major | Di    |
|                |           | T     | &     |       | Di    | gital |
|                |           | ier** | R     |       | gital | Chan  |
|                |           |       | emote |       | T     | nel** |
|                |           |       | Cont  |       | ier** |       |
|                |           |       | rol** |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | Average   | *     | **\$5 | *     | **2   | *     |
| groups         |           | *\$10 | .12** | *\$15 | 7.4** | *\$0. |
| combined**     |           | .08** |       | .20** |       | 682** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *561* | *561* | *561* | *561* | *557* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *0.8* | *0    |
|                | error*    | 0.30* | 0.10* | 0.27* |       | .022* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **             | Average   | *     | **\$5 | *     | **2   | *     |
| Noncompetitive |           | *\$10 | .08** | *\$15 | 7.3** | *\$0. |
| group**        |           | .21** |       | .29** |       | 686** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *370* | *370* | *370* | *370* | *366* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *0.7* | *0    |
|                | error*    | 0.27* | 0.09* | 0.24* |       | .019* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Competitive  | Average   | **\$8 | **\$5 | *     | **2   | *     |
| group**        |           | .60** | .59** | *\$14 | 8.4** | *\$0. |
|                |           |       |       | .19** |       | 636** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *191* | *191* | *191* | *191* | *191* |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *2.0* | *0    |
|                | error*    | 0.65* | 0.23* | 0.61* |       | .054* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | **\$9 | **\$5 | *     | **2   | *     |
| competition    |           | .13** | .43** | *\$14 | 8.8** | *\$0. |
|                |           |       |       | .56** |       | 641** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *95*  | *95*  | *95*  | *95*  | *95*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *1.8* | *0    |
|                | error*    | 0.66* | 0.22* | 0.66* |       | .050* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | **\$8 | **\$5 | *     | **2   | *     |
| incumbent      |           | .17** | .26** | *\$13 | 9.5** | *\$0. |
|                |           |       |       | .43** |       | 581** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *63*  | *63*  | *63*  | *63*  | *63*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *1.7* | *0    |
|                | error*    | 0.56* | 0.20* | 0.55* |       | .046* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline rival | Average   | *     | **\$6 | *     | **2   | *     |
|                |           | *\$13 | .20** | *\$19 | 5.5** | *\$0. |
|                |           | .38** |       | .59** |       | 906** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *32*  | *32*  | *32*  | *32*  | *32*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *2.2* | *0    |
|                | error*    | 1.08* | 0.34* | 1.17* |       | .068* |
+----------------+-----------+-------+-------+-------+-------+-------+
| DBS            | Average   | **\$6 | **\$5 | *     | **3   | *     |
| competition \* |           | .60** | .72** | *\$12 | 1.8** | *\$0. |
|                |           |       |       | .32** |       | 455** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *38*  | *38*  | *38*  | *38*  | *38*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *2.0* | *0    |
|                | error*    | 0.45* | 0.23* | 0.46* |       | .035* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireless       | Average   | *     | **\$5 | *     | **2   | *     |
| competition \* |           | *\$10 | .50** | *\$15 | 4.5** | *\$0. |
|                |           | .23** |       | .73** |       | 829** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *28*  | *28*  | *28*  | *28*  | *28*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *2.3* | *0    |
|                | error*    | 0.84* | 0.22* | 0.66* |       | .081* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Low            | Average   | **\$7 | **\$6 | *     | **2   | *     |
| penetration    |           | .44** | .60** | *\$14 | 5.8** | *\$0. |
| test           |           |       |       | .03** |       | 633** |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *30*  | *33*  | *30*  | *30*  | *30*  |
|                | rvations* |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *2.1* | *0    |
|                | error*    | 0.80* | 0.34* | 0.87* |       | .049* |
+----------------+-----------+-------+-------+-------+-------+-------+
| \* These       |           |       |       |       |       |       |
| averages       |           |       |       |       |       |       |
| include cable  |           |       |       |       |       |       |
| system prices  |           |       |       |       |       |       |
| in communities |           |       |       |       |       |       |
| with an        |           |       |       |       |       |       |
| Effective      |           |       |       |       |       |       |
| Competition    |           |       |       |       |       |       |
| finding based  |           |       |       |       |       |       |
| on DBS or      |           |       |       |       |       |       |
| wireless       |           |       |       |       |       |       |
| competition,   |           |       |       |       |       |       |
| but not the    |           |       |       |       |       |       |
| prices charged |           |       |       |       |       |       |
| by the         |           |       |       |       |       |       |
| competing DBS  |           |       |       |       |       |       |
| or wireless    |           |       |       |       |       |       |
| system.        |           |       |       |       |       |       |
| *Source:*      |           |       |       |       |       |       |
| Survey.        |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+

+----------------+-----------+-------+-------+-------+-------+-------+
| **Attachment   |           |       |       |       |       |       |
| 14**           |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **Digital      |           |       |       |       |       |       |
| Television     |           |       |       |       |       |       |
| Service**      |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **Monthly      |           |       |       |       |       |       |
| Cable Rate &   |           |       |       |       |       |       |
| Price Per      |           |       |       |       |       |       |
| Channel**      |           |       |       |       |       |       |
|                |           |       |       |       |       |       |
| **January 1,   |           |       |       |       |       |       |
| 2002**         |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | **St      | **    | **Di  | **Mo  | **Cha | **    |
| Groups &       | atistic** | Major | gital | nthly | nnels | Price |
| Subgroups**    |           | Di    | Conv  | Pr    | on    | Per   |
|                |           | gital | erter | ice** | Major | Di    |
|                |           | T     | &     |       | Di    | gital |
|                |           | ier** | R     |       | gital | Chan  |
|                |           |       | emote |       | T     | nel** |
|                |           |       | Cont  |       | ier** |       |
|                |           |       | rol** |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Sample       | Average   | **\$9 | **\$4 | *     | \-\-- | \-\-- |
| groups         |           | .61** | .87** | *\$14 |       |       |
| combined**     |           |       |       | .48** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *511* | *511* | *511* | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.30* | 0.11* | 0.28* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **             | Average   | **\$9 | **\$4 | *     | \-\-- | \-\-- |
| Noncompetitive |           | .72** | .84** | *\$14 |       |       |
| group**        |           |       |       | .56** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *335* | *335* | *335* | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.27* | 0.09* | 0.24* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| **Competitive  | Average   | **\$8 | **\$5 | *     | \-\-- | \-\-- |
| group**        |           | .29** | .24** | *\$13 |       |       |
|                |           |       |       | .54** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *176* | *176* | *176* | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.65* | 0.23* | 0.66* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | **\$8 | **\$5 | *     | \-\-- | \-\-- |
| competition    |           | .62** | .07** | *\$13 |       |       |
|                |           |       |       | .68** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *86*  | *86*  | *86*  | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.67* | 0.23* | 0.71* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline       | Average   | **\$7 | **\$4 | *     | \-\-- | \-\-- |
| incumbent      |           | .80** | .85** | *\$12 |       |       |
|                |           |       |       | .65** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *56*  | *56*  | *56*  | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.56* | 0.20* | 0.60* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireline rival | Average   | *     | **\$6 | *     | \-\-- | \-\-- |
|                |           | *\$12 | .04** | *\$18 |       |       |
|                |           | .24** |       | .27** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *30*  | *30*  | *30*  | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 1.16* | 0.36* | 1.22* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| DBS            | Average   | **\$6 | **\$5 | *     | \-\-- | \-\-- |
| competition \* |           | .33** | .70** | *\$12 |       |       |
|                |           |       |       | .03** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *35*  | *35*  | *35*  | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.39* | 0.27* | 0.41* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Wireless       | Average   | *     | **\$4 | *     | \-\-- | \-\-- |
| competition \* |           | *\$10 | .78** | *\$15 |       |       |
|                |           | .21** |       | .00** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *27*  | *27*  | *27*  | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.90* | 0.17* | 0.86* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| Low            | Average   | **\$6 | **\$6 | *     | \-\-- | \-\-- |
| penetration    |           | .86** | .57** | *\$13 |       |       |
| test           |           |       |       | .43** |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Obse     | *28*  | *28*  | *28*  | *\    | *\    |
|                | rvations* |       |       |       | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
|                | *Standard | *     | *     | *     | *\    | *\    |
|                | error*    | 0.72* | 0.39* | 0.83* | -\--* | -\--* |
+----------------+-----------+-------+-------+-------+-------+-------+
| \* These       |           |       |       |       |       |       |
| averages       |           |       |       |       |       |       |
| include cable  |           |       |       |       |       |       |
| system prices  |           |       |       |       |       |       |
| in communities |           |       |       |       |       |       |
| with an        |           |       |       |       |       |       |
| Effective      |           |       |       |       |       |       |
| Competition    |           |       |       |       |       |       |
| finding based  |           |       |       |       |       |       |
| on DBS or      |           |       |       |       |       |       |
| wireless       |           |       |       |       |       |       |
| competition,   |           |       |       |       |       |       |
| but not the    |           |       |       |       |       |       |
| prices charged |           |       |       |       |       |       |
| by the         |           |       |       |       |       |       |
| competing DBS  |           |       |       |       |       |       |
| or wireless    |           |       |       |       |       |       |
| system.        |           |       |       |       |       |       |
| *Source:*      |           |       |       |       |       |       |
| Survey.        |           |       |       |       |       |       |
+----------------+-----------+-------+-------+-------+-------+-------+

+----------------+-------------+-------+---------+---------+---------+
| **Attachment   |             |       |         |         |         |
| 15**           |             |       |         |         |         |
|                |             |       |         |         |         |
| **Cable System |             |       |         |         |         |
| Operating      |             |       |         |         |         |
| Capacity**     |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| **Sample       | **S         | **Cap | **      |         |         |
| Groups &       | tatistics** | acity | Percent |         |         |
| Subgroups**    |             | in    | of      |         |         |
|                |             | MHz** | Subs    |         |         |
|                |             |       | cribers |         |         |
|                |             |       | S       |         |         |
|                |             |       | erved** |         |         |
|                |             |       |         |         |         |
|                |             |       | **by    |         |         |
|                |             |       | Systems |         |         |
|                |             |       | With    |         |         |
|                |             |       | C       |         |         |
|                |             |       | apacity |         |         |
|                |             |       | of**    |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                |             |       | **212   | **750   | **751   |
|                |             |       | to 749  | MHz**   | to 870  |
|                |             |       | MHz**   |         | MHz**   |
+----------------+-------------+-------+---------+---------+---------+
| **January 1,   |             |       |         |         |         |
| 2004 \***      |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| **Sample       | Average     | **    | **      | **      | **      |
| groups         |             | 734** | 14.3%** | 59.6%** | 26.1%** |
| combined**     |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Ob         | *641* | *641*   | *641*   | *641*   |
|                | servations* |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Standard   | *7.0* | *0.020* | *0.028* | *0.024* |
|                | error*      |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| **             | Average     | **    | **      | **      | **      |
| Noncompetitive |             | 734** | 14.3%** | 59.3%** | 26.4%** |
| group**        |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Ob         | *406* | *406*   | *406*   | *406*   |
|                | servations* |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Standard   | *6.1* | *0.017* | *0.024* | *0.022* |
|                | error*      |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| **Competitive  | Average     | **    | **      | **      | **      |
| group**        |             | 734** | 14.5%** | 62.4%** | 23.1%** |
+----------------+-------------+-------+---------+---------+---------+
|                | *Ob         | *235* | *235*   | *235*   | *235*   |
|                | servations* |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Standard   | *     | *0.052* | *0.067* | *0.054* |
|                | error*      | 17.2* |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Wireline       | Average     | **    | **      | **      | **      |
| combined       |             | 745** | 10.6%** | 63.5%** | 25.9%** |
+----------------+-------------+-------+---------+---------+---------+
|                | *Ob         | *115* | *115*   | *115*   | *115*   |
|                | servations* |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Standard   | *     | *0.040* | *0.061* | *0.056* |
|                | error*      | 13.6* |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Wireline       | Average     | **    | **      | **      | **      |
| incumbent      |             | 746** | 10.8%** | 61.5%** | 27.7%** |
+----------------+-------------+-------+---------+---------+---------+
|                | *Ob         | *65*  | *65*    | *65*    | *65*    |
|                | servations* |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Standard   | *     | *0.039* | *0.061* | *0.056* |
|                | error*      | 13.0* |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Wireline rival | Average     | **    | **      | **      | **      |
|                |             | 739** | 10.0%** | 72.0%** | 18.0%** |
+----------------+-------------+-------+---------+---------+---------+
|                | *Ob         | *50*  | *50*    | *50*    | *50*    |
|                | servations* |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Standard   | *     | *0.043* | *0.064* | *0.055* |
|                | error*      | 15.9* |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| DBS            | Average     | **    | **      | **      | **      |
| Competition    |             | 750** | 15.4%** | 46.1%** | 38.5%** |
| \*\*\*         |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Ob         | *52*  | *52*    | *52*    | *52*    |
|                | servations* |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Standard   | *     | *0.051* | *0.070* | *0.068* |
|                | error*      | 19.3* |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Wireless       | Average     | **    | **      | **      | *       |
| Competition    |             | 718** | 13.8%** | 82.8%** | *3.4%** |
| \*\*\*         |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Ob         | *29*  | *29*    | *29*    | *29*    |
|                | servations* |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Standard   | *     | *0.065* | *0.071* | *0.034* |
|                | error*      | 18.2* |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Low            | Average     | **    | **      | **      | **      |
| penetration    |             | 627** | 46.2%** | 38.4%** | 15.4%** |
| test           |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Ob         | *39*  | *39*    | *39*    | *39*    |
|                | servations* |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
|                | *Standard   | *     | *0.081* | *0.079* | *0.059* |
|                | error*      | 29.2* |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| **July 1, 2002 |             |       |         |         |         |
| \*\***         |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Sample groups  | Average     | 694   | 26.6%   | 55.6%   | 17.8%   |
| combined       |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Noncompetitive | Average     | 696   | 26.6%   | 55.2%   | 18.2%   |
| group          |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Competitive    | Average     | 677   | 27.3%   | 61.1%   | 11.6%   |
| group          |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| **July 1, 1999 |             |       |         |         |         |
| \*\***         |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Sample groups  | Average     | 534   | 53.9%   | 44.4%   | 1.7%    |
| combined       |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Noncompetitive | Average     | 532   | 54.2%   | 44.0%   | 1.8%    |
| group          |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| Competitive    | Average     | 619   | 44.1%   | 55.9%   | 0.0%    |
| group          |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+
| \* *Source:*   |             |       |         |         |         |
| Survey.        |             |       |         |         |         |
|                |             |       |         |         |         |
| \*\* Results   |             |       |         |         |         |
| from previous  |             |       |         |         |         |
| surveys,       |             |       |         |         |         |
| presented for  |             |       |         |         |         |
| comparison.    |             |       |         |         |         |
| *Source:*      |             |       |         |         |         |
| Survey *and    |             |       |         |         |         |
| Statistical    |             |       |         |         |         |
| Report on      |             |       |         |         |         |
| Average Rates  |             |       |         |         |         |
| for Basic      |             |       |         |         |         |
| Service, Cable |             |       |         |         |         |
| Programming    |             |       |         |         |         |
| Service, and   |             |       |         |         |         |
| Equipment,* 17 |             |       |         |         |         |
| FCC Rcd 6301   |             |       |         |         |         |
| (2002); 15 FCC |             |       |         |         |         |
| Rcd 10927      |             |       |         |         |         |
| (2000).        |             |       |         |         |         |
|                |             |       |         |         |         |
| \*\*\* These   |             |       |         |         |         |
| averages       |             |       |         |         |         |
| include cable  |             |       |         |         |         |
| system prices  |             |       |         |         |         |
| in communities |             |       |         |         |         |
| with an        |             |       |         |         |         |
| Effective      |             |       |         |         |         |
| Competition    |             |       |         |         |         |
| finding based  |             |       |         |         |         |
| on DBS or      |             |       |         |         |         |
| wireless       |             |       |         |         |         |
| competition,   |             |       |         |         |         |
| but not the    |             |       |         |         |         |
| prices charged |             |       |         |         |         |
| by the         |             |       |         |         |         |
| competing DBS  |             |       |         |         |         |
| or wireless    |             |       |         |         |         |
| system.        |             |       |         |         |         |
+----------------+-------------+-------+---------+---------+---------+

+--------------+--------+------+-------+-----+-------+-----+-------+
| **Attachment |        |      |       |     |       |     |       |
| 16**         |        |      |       |     |       |     |       |
|              |        |      |       |     |       |     |       |
| **Percent of |        |      |       |     |       |     |       |
| Subscribers  |        |      |       |     |       |     |       |
| Offered      |        |      |       |     |       |     |       |
| Digital      |        |      |       |     |       |     |       |
| Programming  |        |      |       |     |       |     |       |
| and Advanced |        |      |       |     |       |     |       |
| Services**   |        |      |       |     |       |     |       |
|              |        |      |       |     |       |     |       |
| **and        |        |      |       |     |       |     |       |
| Percent of   |        |      |       |     |       |     |       |
| Those        |        |      |       |     |       |     |       |
| Subscribers  |        |      |       |     |       |     |       |
| Taking       |        |      |       |     |       |     |       |
| Services**   |        |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| **Sample     | *      | *    |       | *   |       | *   |       |
| Groups &     | *Stati | *Dig |       | *Ca |       | *Te |       |
| Subgroups**  | stic** | ital |       | ble |       | lep |       |
|              |        | P    |       | In  |       | hon |       |
|              |        | rogr |       | ter |       | y** |       |
|              |        | ammi |       | net |       |     |       |
|              |        | ng** |       | Ac  |       |     |       |
|              |        |      |       | ces |       |     |       |
|              |        |      |       | s** |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              |        | Per  | Of    | P   | Of    | P   | Of    |
|              |        | cent | T     | erc | T     | erc | T     |
|              |        | Off  | hose, | ent | hose, | ent | hose, |
|              |        | ered | Pe    | O   | Pe    | O   | Pe    |
|              |        |      | rcent | ffe | rcent | ffe | rcent |
|              |        |      | S     | red | Sub   | red | Sub   |
|              |        |      | ubscr |     | scrib |     | scrib |
|              |        |      | ibing |     | ing\* |     | ing\* |
+--------------+--------+------+-------+-----+-------+-----+-------+
| **January 1, |        |      |       |     |       |     |       |
| 2004**       |        |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| **Sample     | A      | *    | **35  | **9 | **26  | **2 | **12  |
| groups       | verage | *97. | .2%** | 4.8 | .1%** | 8.5 | .9%** |
| combined**   |        | 3%** |       | %** |       | %** |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *O     | 656  | 613   | 641 | 597   | 641 | 170   |
|              | bserva |      |       |     |       |     |       |
|              | tions* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *St    | 0.01 | 0.01  | 0   | 0.01  | 0   | 0.02  |
|              | andard |      |       | .01 |       | .03 |       |
|              | error* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | 5%     | 9    | 35.0% | 99  | 25.7% | 26  | 11.4% |
|              | T      | 9.9% |       | .6% |       | .1% |       |
|              | rimmed |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| **No         | A      | *    | **34  | **9 | **26  | **2 | **12  |
| ncompetitive | verage | *97. | .9%** | 4.8 | .0%** | 8.8 | .1%** |
| group**      |        | 3%** |       | %** |       | %** |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *O     | 406  | 395   | 406 | 385   | 406 | 117   |
|              | bserva |      |       |     |       |     |       |
|              | tions* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *St    | 0.01 | 0.01  | 0   | 0.01  | 0   | 0.01  |
|              | andard |      |       | .01 |       | .02 |       |
|              | error* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | 5%     | 10   | 34.7% | 99  | 25.7% | 26  | 10.5% |
|              | T      | 0.0% |       | .8% |       | .5% |       |
|              | rimmed |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| *            | A      | *    | **37  | **9 | **26  | **2 | **22  |
| *Competitive | verage | *96. | .7%** | 3.9 | .7%** | 4.9 | .0%** |
| group**      |        | 9%** |       | %** |       | %** |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *O     | 250  | 218   | 235 | 212   | 235 | 53    |
|              | bserva |      |       |     |       |     |       |
|              | tions* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *St    | 0.01 | 0.02  | 0   | 0.02  | 0   | 0.08  |
|              | andard |      |       | .03 |       | .06 |       |
|              | error* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | 5%     | 9    | 37.8% | 97  | 26.4% | 22  | 21.7% |
|              | T      | 8.5% |       | .6% |       | .5% |       |
|              | rimmed |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| Wireline     | A      | *    | **34  | **9 | **30  | **2 | **32  |
| combined     | verage | *97. | .8%** | 7.3 | .3%** | 3.1 | .9%** |
|              |        | 1%** |       | %** |       | %** |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *O     | 130  | 107   | 115 | 110   | 115 | 29    |
|              | bserva |      |       |     |       |     |       |
|              | tions* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *St    | 0.01 | 0.02  | 0   | 0.02  | 0   | 0.05  |
|              | andard |      |       | .02 |       | .05 |       |
|              | error* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | 5%     | 9    | 34.9% | 99  | 30.2% | 20  | 32.2% |
|              | T      | 7.8% |       | .4% |       | .1% |       |
|              | rimmed |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| Wireline     | A      | **   | **36  | **9 | **27  | **2 | **20  |
| incumbent    | verage | 100. | .7%** | 8.5 | .1%** | 1.5 | .4%** |
|              |        | 0%** |       | %** |       | %** |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *O     | 65   | 65    | 65  | 64    | 65  | 14    |
|              | bserva |      |       |     |       |     |       |
|              | tions* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *St    | 0.00 | 0.02  | 0   | 0.02  | 0   | 0.05  |
|              | andard |      |       | .02 |       | .05 |       |
|              | error* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | 5%     | 10   | 37.2% | 100 | 27.2% | 18  | 19.7% |
|              | T      | 0.0% |       | .0% |       | .4% |       |
|              | rimmed |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| Wireline     | A      | *    | **26  | **9 | **44  | **3 | **88  |
| rival        | verage | *84. | .4%** | 2.0 | .8%** | 0.0 | .2%** |
|              |        | 0%** |       | %** |       | %** |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *O     | 65   | 42    | 50  | 46    | 50  | 15    |
|              | bserva |      |       |     |       |     |       |
|              | tions* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *St    | 0.05 | 0.04  | 0   | 0.03  | 0   | 0.08  |
|              | andard |      |       | .04 |       | .07 |       |
|              | error* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | 5%     | 8    | 24.6% | 96  | 44.0% | 27  | 88.1% |
|              | T      | 7.8% |       | .7% |       | .8% |       |
|              | rimmed |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| DBS          | A      | *    | **40  | **9 | **25  | **  | **16  |
| competition  | verage | *96. | .5%** | 4.2 | .4%** | 3.8 | .5%** |
| \*\*         |        | 2%** |       | %** |       | %** |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *O     | 52   | 50    | 52  | 49    | 52  | 2     |
|              | bserva |      |       |     |       |     |       |
|              | tions* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *St    | 0.03 | 0.02  | 0   | 0.02  | 0   | 0.16  |
|              | andard |      |       | .03 |       | .03 |       |
|              | error* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | 5%     | 10   | 40.5% | 99  | 25.1% | 0   | 16.5% |
|              | T      | 0.0% |       | .1% |       | .0% |       |
|              | rimmed |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| Wireless     | A      | **   | **38  | **9 | **22  | **5 | **8   |
| competition  | verage | 100. | .4%** | 3.1 | .6%** | 1.7 | .6%** |
| \*\*         |        | 0%** |       | %** |       | %** |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *O     | 29   | 29    | 29  | 27    | 29  | 15    |
|              | bserva |      |       |     |       |     |       |
|              | tions* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *St    | 0.00 | 0.02  | 0   | 0.02  | 0   | 0.01  |
|              | andard |      |       | .05 |       | .09 |       |
|              | error* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | 5%     | 10   | 38.8% | 97  | 22.4% | 51  | 8.4%  |
|              | T      | 0.0% |       | .9% |       | .9% |       |
|              | rimmed |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| Low          | A      | *    | **40  | **6 | **27  | **1 | **45  |
| penetration  | verage | *82. | .2%** | 6.7 | .4%** | 7.9 | .1%** |
| test         |        | 1%** |       | %** |       | %** |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *O     | 39   | 32    | 39  | 26    | 39  | 7     |
|              | bserva |      |       |     |       |     |       |
|              | tions* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | *St    | 0.06 | 0.04  | 0   | 0.03  | 0   | 0.15  |
|              | andard |      |       | .08 |       | .06 |       |
|              | error* |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
|              | 5%     | 8    | 39.2% | 68  | 26.3% | 14  | 44.2% |
|              | T      | 5.6% |       | .5% |       | .4% |       |
|              | rimmed |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+
| \* While     |        |      |       |     |       |     |       |
| share is     |        |      |       |     |       |     |       |
| calculated   |        |      |       |     |       |     |       |
| in this      |        |      |       |     |       |     |       |
| attachment   |        |      |       |     |       |     |       |
| as the       |        |      |       |     |       |     |       |
| percent of   |        |      |       |     |       |     |       |
| Internet or  |        |      |       |     |       |     |       |
| telephony    |        |      |       |     |       |     |       |
| subscribers  |        |      |       |     |       |     |       |
| to basic     |        |      |       |     |       |     |       |
| service      |        |      |       |     |       |     |       |
| subscribers, |        |      |       |     |       |     |       |
| we note that |        |      |       |     |       |     |       |
| a small      |        |      |       |     |       |     |       |
| percentage   |        |      |       |     |       |     |       |
| of advanced  |        |      |       |     |       |     |       |
| services     |        |      |       |     |       |     |       |
| subscribers  |        |      |       |     |       |     |       |
| do not       |        |      |       |     |       |     |       |
| subscribe to |        |      |       |     |       |     |       |
| cable        |        |      |       |     |       |     |       |
| television   |        |      |       |     |       |     |       |
| service.     |        |      |       |     |       |     |       |
| This         |        |      |       |     |       |     |       |
| percentage   |        |      |       |     |       |     |       |
| was          |        |      |       |     |       |     |       |
| estimated as |        |      |       |     |       |     |       |
| of July 2002 |        |      |       |     |       |     |       |
| to be 3.4%   |        |      |       |     |       |     |       |
| regarding    |        |      |       |     |       |     |       |
| cable        |        |      |       |     |       |     |       |
| Internet     |        |      |       |     |       |     |       |
| access.      |        |      |       |     |       |     |       |
| *See*        |        |      |       |     |       |     |       |
| *Statistical |        |      |       |     |       |     |       |
| Report on    |        |      |       |     |       |     |       |
| Average      |        |      |       |     |       |     |       |
| Rates for    |        |      |       |     |       |     |       |
| Basic        |        |      |       |     |       |     |       |
| Service,     |        |      |       |     |       |     |       |
| Cable        |        |      |       |     |       |     |       |
| Programming  |        |      |       |     |       |     |       |
| Service, and |        |      |       |     |       |     |       |
| Equipment*,  |        |      |       |     |       |     |       |
| 18 FCC Rcd   |        |      |       |     |       |     |       |
| 13284 n.16   |        |      |       |     |       |     |       |
| (2003).      |        |      |       |     |       |     |       |
|              |        |      |       |     |       |     |       |
| \*\* These   |        |      |       |     |       |     |       |
| averages     |        |      |       |     |       |     |       |
| include      |        |      |       |     |       |     |       |
| cable system |        |      |       |     |       |     |       |
| prices in    |        |      |       |     |       |     |       |
| communities  |        |      |       |     |       |     |       |
| with an      |        |      |       |     |       |     |       |
| Effective    |        |      |       |     |       |     |       |
| Competition  |        |      |       |     |       |     |       |
| finding      |        |      |       |     |       |     |       |
| based on DBS |        |      |       |     |       |     |       |
| or wireless  |        |      |       |     |       |     |       |
| competition, |        |      |       |     |       |     |       |
| but not the  |        |      |       |     |       |     |       |
| prices       |        |      |       |     |       |     |       |
| charged by   |        |      |       |     |       |     |       |
| the          |        |      |       |     |       |     |       |
| competing    |        |      |       |     |       |     |       |
| DBS or       |        |      |       |     |       |     |       |
| wireless     |        |      |       |     |       |     |       |
| system.      |        |      |       |     |       |     |       |
|              |        |      |       |     |       |     |       |
| *Source:*    |        |      |       |     |       |     |       |
| Survey.      |        |      |       |     |       |     |       |
+--------------+--------+------+-------+-----+-------+-----+-------+

+---------------+-----------+------+------+-----+-----+------+-----+
| **Attachment  |           |      |      |     |     |      |     |
| 17**          |           |      |      |     |     |      |     |
|               |           |      |      |     |     |      |     |
| **Number of   |           |      |      |     |     |      |     |
| Channels**    |           |      |      |     |     |      |     |
|               |           |      |      |     |     |      |     |
| **January 1,  |           |      |      |     |     |      |     |
| 2004**        |           |      |      |     |     |      |     |
+---------------+-----------+------+------+-----+-----+------+-----+
| **Sample      | **St      | **An |      |     | **D |      |     |
| Groups &      | atistic** | alog |      |     | igi |      |     |
| Subgroups**   |           | Ch   |      |     | tal |      |     |
|               |           | anne |      |     | C   |      |     |
|               |           | ls** |      |     | han |      |     |
|               |           |      |      |     | nel |      |     |
|               |           |      |      |     | s** |      |     |
+---------------+-----------+------+------+-----+-----+------+-----+
|               |           | **B  | **   | **T | *   | **   | **T |
|               |           | asic | Prem | ota | *Ma | Prem | ota |
|               |           | &    | ium, | l** | jor | ium, | l** |
|               |           | Expa | Pay, |     | D   | Pay, |     |
|               |           | nded | &    |     | igi | &    |     |
|               |           | Bas  | Mini |     | tal | Mini |     |
|               |           | ic** | Tie  |     | Tie | Tie  |     |
|               |           |      | rs** |     | r** | rs** |     |
+---------------+-----------+------+------+-----+-----+------+-----+
| **Sample      | Average   | **70 | **3  | **  | **  | *    | **1 |
| groups        |           | .3** | .0** | 73. | 31. | *118 | 50. |
| combined**    |           |      |      | 3** | 6** | .5** | 1** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *    | *    | *6  | *6  | *    | *6  |
|               | rvations* | 641* | 641* | 41* | 00* | 600* | 00* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *0  | *0  | *    | *3  |
|               | error*    | 0.6* | 0.3* | .6* | .7* | 2.8* | .0* |
+---------------+-----------+------+------+-----+-----+------+-----+
| **N           | Average   | **70 | **3  | **  | **  | *    | **1 |
| oncompetitive |           | .1** | .1** | 73. | 31. | *118 | 49. |
| group**       |           |      |      | 2** | 4** | .0** | 4** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *    | *    | *4  | *3  | *    | *3  |
|               | rvations* | 406* | 406* | 06* | 93* | 393* | 93* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *0  | *0  | *    | *2  |
|               | error*    | 0.5* | 0.3* | .6* | .6* | 2.5* | .6* |
+---------------+-----------+------+------+-----+-----+------+-----+
| **Competitive | Average   | **72 | **2  | **  | **  | *    | **1 |
| group**       |           | .5** | .2** | 74. | 33. | *123 | 57. |
|               |           |      |      | 7** | 9** | .8** | 7** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *    | *    | *2  | *2  | *    | *2  |
|               | rvations* | 235* | 235* | 35* | 07* | 207* | 07* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *1  | *1  | *    | *7  |
|               | error*    | 1.3* | 0.5* | .4* | .8* | 7.0* | .7* |
+---------------+-----------+------+------+-----+-----+------+-----+
| Wireline      | Average   | **74 | **3  | **  | **  | *    | **1 |
| competition   |           | .9** | .5** | 78. | 33. | *120 | 54. |
|               |           |      |      | 4** | 8** | .7** | 5** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *    | *    | *1  | *   | *99* | *   |
|               | rvations* | 115* | 115* | 15* | 99* |      | 99* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *1  | *1  | *    | *6  |
|               | error*    | 1.2* | 0.6* | .3* | .4* | 5.6* | .2* |
+---------------+-----------+------+------+-----+-----+------+-----+
| Wireline      | Average   | **75 | **2  | **  | **  | *    | **1 |
| incumbent     |           | .3** | .1** | 77. | 33. | *129 | 62. |
|               |           |      |      | 4** | 5** | .0** | 5** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *65* | *65* | *   | *   | *64* | *   |
|               | rvations* |      |      | 65* | 64* |      | 64* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *1  | *1  | *    | *6  |
|               | error*    | 1.1* | 0.5* | .2* | .5* | 5.9* | .6* |
+---------------+-----------+------+------+-----+-----+------+-----+
| Wireline      | Average   | **72 | **9  | **  | **  | **84 | **1 |
| rival         |           | .8** | .9** | 82. | 35. | .2** | 19. |
|               |           |      |      | 6** | 0** |      | 2** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *50* | *50* | *   | *   | *35* | *   |
|               | rvations* |      |      | 50* | 35* |      | 35* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *1  | *1  | *    | *4  |
|               | error*    | 1.5* | 1.4* | .9* | .3* | 4.0* | .4* |
+---------------+-----------+------+------+-----+-----+------+-----+
| DBS           | Average   | **70 | **1  | **  | **  | *    | **1 |
| competition   |           | .5** | .3** | 71. | 39. | *104 | 43. |
| \*            |           |      |      | 8** | 0** | .8** | 8** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *52* | *52* | *   | *   | *49* | *   |
|               | rvations* |      |      | 52* | 49* |      | 49* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *2  | *1  | *    | *8  |
|               | error*    | 2.0* | 0.4* | .0* | .8* | 7.2* | .3* |
+---------------+-----------+------+------+-----+-----+------+-----+
| Wireless      | Average   | **72 | **1  | **  | **  | *    | **1 |
| competition   |           | .9** | .2** | 74. | 29. | *155 | 84. |
| \*            |           |      |      | 1** | 2** | .4** | 7** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *29* | *29* | *   | *   | *29* | *   |
|               | rvations* |      |      | 29* | 29* |      | 29* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *0  | *2  | *    | *8  |
|               | error*    | 0.5* | 0.5* | .6* | .0* | 8.3* | .7* |
+---------------+-----------+------+------+-----+-----+------+-----+
| Low           | Average   | **62 | **2  | **  | **  | **84 | **1 |
| penetration   |           | .2** | .3** | 64. | 29. | .1** | 13. |
| test          |           |      |      | 4** | 1** |      | 2** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *39* | *39* | *   | *   | *30* | *   |
|               | rvations* |      |      | 39* | 30* |      | 30* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *2  | *2  | *    | *10 |
|               | error*    | 2.4* | 0.6* | .5* | .5* | 9.4* | .5* |
+---------------+-----------+------+------+-----+-----+------+-----+
| \* These      |           |      |      |     |     |      |     |
| averages      |           |      |      |     |     |      |     |
| include cable |           |      |      |     |     |      |     |
| system prices |           |      |      |     |     |      |     |
| in            |           |      |      |     |     |      |     |
| communities   |           |      |      |     |     |      |     |
| with an       |           |      |      |     |     |      |     |
| Effective     |           |      |      |     |     |      |     |
| Competition   |           |      |      |     |     |      |     |
| finding based |           |      |      |     |     |      |     |
| on DBS or     |           |      |      |     |     |      |     |
| wireless      |           |      |      |     |     |      |     |
| competition,  |           |      |      |     |     |      |     |
| but not the   |           |      |      |     |     |      |     |
| prices        |           |      |      |     |     |      |     |
| charged by    |           |      |      |     |     |      |     |
| the competing |           |      |      |     |     |      |     |
| DBS or        |           |      |      |     |     |      |     |
| wireless      |           |      |      |     |     |      |     |
| system.       |           |      |      |     |     |      |     |
| *Source:*     |           |      |      |     |     |      |     |
| Survey.       |           |      |      |     |     |      |     |
+---------------+-----------+------+------+-----+-----+------+-----+

+---------------+-----------+------+------+-----+-----+------+-----+
| **Attachment  |           |      |      |     |     |      |     |
| 18**          |           |      |      |     |     |      |     |
|               |           |      |      |     |     |      |     |
| **Number of   |           |      |      |     |     |      |     |
| Channels**    |           |      |      |     |     |      |     |
|               |           |      |      |     |     |      |     |
| **January 1,  |           |      |      |     |     |      |     |
| 2003**        |           |      |      |     |     |      |     |
+---------------+-----------+------+------+-----+-----+------+-----+
| **Sample      | **St      | **An |      |     | **D |      |     |
| Groups &      | atistic** | alog |      |     | igi |      |     |
| Subgroups**   |           | Ch   |      |     | tal |      |     |
|               |           | anne |      |     | C   |      |     |
|               |           | ls** |      |     | han |      |     |
|               |           |      |      |     | nel |      |     |
|               |           |      |      |     | s** |      |     |
+---------------+-----------+------+------+-----+-----+------+-----+
|               |           | **B  | **   | **T | *   | **   | **T |
|               |           | asic | Prem | ota | *Ma | Prem | ota |
|               |           | &    | ium, | l** | jor | ium, | l** |
|               |           | Expa | Pay, |     | D   | Pay, |     |
|               |           | nded | &    |     | igi | &    |     |
|               |           | Bas  | Mini |     | tal | Mini |     |
|               |           | ic** | Tie  |     | Tie | Tie  |     |
|               |           |      | rs** |     | r** | rs** |     |
+---------------+-----------+------+------+-----+-----+------+-----+
| **Sample      | Average   | **67 | **5  | **  | **  | *    | **1 |
| groups        |           | .5** | .6** | 73. | 27. | *109 | 36. |
| combined**    |           |      |      | 1** | 4** | .0** | 4** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *    | *    | *6  | *5  | *    | *5  |
|               | rvations* | 641* | 641* | 41* | 61* | 561* | 61* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *0  | *0  | *    | *3  |
|               | error*    | 0.6* | 0.3* | .7* | .8* | 2.7* | .0* |
+---------------+-----------+------+------+-----+-----+------+-----+
| **N           | Average   | **67 | **5  | **  | **  | *    | **1 |
| oncompetitive |           | .3** | .6** | 73. | 27. | *108 | 36. |
| group**       |           |      |      | 0** | 3** | .8** | 0** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *    | *    | *4  | *3  | *    | *3  |
|               | rvations* | 406* | 406* | 06* | 70* | 370* | 70* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *0  | *0  | *    | *2  |
|               | error*    | 0.5* | 0.3* | .6* | .7* | 2.5* | .7* |
+---------------+-----------+------+------+-----+-----+------+-----+
| **Competitive | Average   | **69 | **4  | **  | **  | *    | **1 |
| group**       |           | .7** | .7** | 74. | 28. | *112 | 40. |
|               |           |      |      | 4** | 4** | .2** | 6** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *    | *    | *2  | *1  | *    | *1  |
|               | rvations* | 235* | 235* | 35* | 91* | 191* | 91* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *1  | *2  | *    | *6  |
|               | error*    | 1.3* | 0.7* | .5* | .0* | 5.7* | .7* |
+---------------+-----------+------+------+-----+-----+------+-----+
| Wireline      | Average   | **71 | **6  | **  | **  | *    | **1 |
| competition   |           | .2** | .9** | 78. | 28. | *119 | 48. |
|               |           |      |      | 2** | 8** | .4** | 2** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *    | *    | *1  | *   | *95* | *   |
|               | rvations* | 115* | 115* | 15* | 95* |      | 95* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *1  | *1  | *    | *5  |
|               | error*    | 0.9* | 0.9* | .3* | .8* | 5.3* | .8* |
+---------------+-----------+------+------+-----+-----+------+-----+
| Wireline      | Average   | **71 | **6  | **  | **  | *    | **1 |
| incumbent     |           | .5** | .1** | 77. | 29. | *125 | 54. |
|               |           |      |      | 6** | 5** | .2** | 7** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *65* | *65* | *   | *   | *63* | *   |
|               | rvations* |      |      | 65* | 63* |      | 63* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *1  | *1  | *    | *6  |
|               | error*    | 0.8* | 0.8* | .2* | .7* | 5.4* | .1* |
+---------------+-----------+------+------+-----+-----+------+-----+
| Wireline      | Average   | **69 | **10 | **  | **  | **93 | **1 |
| rival         |           | .9** | .5** | 80. | 25. | .8** | 19. |
|               |           |      |      | 5** | 5** |      | 3** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *50* | *50* | *   | *   | *32* | *   |
|               | rvations* |      |      | 50* | 32* |      | 32* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *1  | *2  | *    | *4  |
|               | error*    | 1.5* | 1.4* | .9* | .2* | 4.5* | .4* |
+---------------+-----------+------+------+-----+-----+------+-----+
| DBS           | Average   | **67 | **2  | **  | **  | **90 | **1 |
| competition   |           | .7** | .1** | 69. | 31. | .3** | 22. |
| \*            |           |      |      | 8** | 8** |      | 0** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *52* | *52* | *   | *   | *38* | *   |
|               | rvations* |      |      | 52* | 38* |      | 38* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *2  | *2  | *    | *7  |
|               | error*    | 2.0* | 0.4* | .1* | .0* | 6.7* | .9* |
+---------------+-----------+------+------+-----+-----+------+-----+
| Wireless      | Average   | **71 | **4  | **  | **  | *    | **1 |
| competition   |           | .2** | .7** | 75. | 24. | *131 | 56. |
| \*            |           |      |      | 9** | 5** | .9** | 4** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *29* | *29* | *   | *   | *28* | *   |
|               | rvations* |      |      | 29* | 28* |      | 28* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *0  | *2  | *    | *6  |
|               | error*    | 0.7* | 0.8* | .9* | .3* | 4.8* | .2* |
+---------------+-----------+------+------+-----+-----+------+-----+
| Low           | Average   | **60 | **2  | **  | **  | **76 | **1 |
| penetration   |           | .1** | .6** | 62. | 25. | .4** | 02. |
| test          |           |      |      | 8** | 8** |      | 2** |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Obse     | *39* | *39* | *   | *   | *30* | *   |
|               | rvations* |      |      | 39* | 30* |      | 30* |
+---------------+-----------+------+------+-----+-----+------+-----+
|               | *Standard | *    | *    | *2  | *2  | *    | *8  |
|               | error*    | 2.3* | 0.6* | .3* | .1* | 7.9* | .9* |
+---------------+-----------+------+------+-----+-----+------+-----+
| \* These      |           |      |      |     |     |      |     |
| averages      |           |      |      |     |     |      |     |
| include cable |           |      |      |     |     |      |     |
| system prices |           |      |      |     |     |      |     |
| in            |           |      |      |     |     |      |     |
| communities   |           |      |      |     |     |      |     |
| with an       |           |      |      |     |     |      |     |
| Effective     |           |      |      |     |     |      |     |
| Competition   |           |      |      |     |     |      |     |
| finding based |           |      |      |     |     |      |     |
| on DBS or     |           |      |      |     |     |      |     |
| wireless      |           |      |      |     |     |      |     |
| competition,  |           |      |      |     |     |      |     |
| but not the   |           |      |      |     |     |      |     |
| prices        |           |      |      |     |     |      |     |
| charged by    |           |      |      |     |     |      |     |
| the competing |           |      |      |     |     |      |     |
| DBS or        |           |      |      |     |     |      |     |
| wireless      |           |      |      |     |     |      |     |
| system.       |           |      |      |     |     |      |     |
| *Source:*     |           |      |      |     |     |      |     |
| Survey.       |           |      |      |     |     |      |     |
+---------------+-----------+------+------+-----+-----+------+-----+

+-----------------+----------+-------+-------+-------+-------+-------+
| **Attachment    |          |       |       |       |       |       |
| 19**            |          |       |       |       |       |       |
|                 |          |       |       |       |       |       |
| **Number of     |          |       |       |       |       |       |
| Local           |          |       |       |       |       |       |
| Channels**      |          |       |       |       |       |       |
|                 |          |       |       |       |       |       |
| **On Basic &    |          |       |       |       |       |       |
| Expanded        |          |       |       |       |       |       |
| Basic**         |          |       |       |       |       |       |
|                 |          |       |       |       |       |       |
| **January 1,    |          |       |       |       |       |       |
| 2004**          |          |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| **Sample Groups | **Sta    | **    | **Pu  | **    | **    | **    |
| & Subgroups**   | tistic** | Local | blic, | Local | Other | Total |
|                 |          | Broa  | Ed.,  | L     | Local | Local |
|                 |          | dcast | &     | eased | Chann | Chann |
|                 |          | Stati | Go    | Acc   | els** | els** |
|                 |          | ons** | vt.** | ess** |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| **Sample groups | Average  | **1   | **    | **    | **    | **1   |
| combined**      |          | 2.2** | 2.7** | 0.8** | 1.3** | 6.9** |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *Obser   | *641* | *641* | *641* | *641* | *641* |
|                 | vations* |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *        | *0.3* | *0.1* | *0.1* | *0.1* | *0.3* |
|                 | Standard |       |       |       |       |       |
|                 | error*   |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| *               | Average  | **1   | **    | **    | **    | **1   |
| *Noncompetitive |          | 2.2** | 2.7** | 0.8** | 1.3** | 6.9** |
| group**         |          |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *Obser   | *406* | *406* | *406* | *406* | *406* |
|                 | vations* |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *        | *0.2* | *0.1* | *0.1* | *0.1* | *0.3* |
|                 | Standard |       |       |       |       |       |
|                 | error*   |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| **Competitive   | Average  | **1   | **    | **    | **    | **1   |
| group**         |          | 2.3** | 2.5** | 0.8** | 1.3** | 6.9** |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *Obser   | *235* | *235* | *235* | *235* | *235* |
|                 | vations* |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *        | *0.5* | *0.3* | *0.1* | *0.2* | *0.7* |
|                 | Standard |       |       |       |       |       |
|                 | error*   |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| Wireline        | Average  | **1   | **    | **    | **    | **1   |
| competition     |          | 1.3** | 2.9** | 0.7** | 1.0** | 5.9** |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *Obser   | *115* | *115* | *115* | *115* | *115* |
|                 | vations* |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *        | *0.4* | *0.3* | *0.1* | *0.2* | *0.6* |
|                 | Standard |       |       |       |       |       |
|                 | error*   |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| Wireline        | Average  | **1   | **    | **    | **    | **1   |
| incumbent       |          | 1.5** | 3.0** | 0.7** | 1.1** | 6.3** |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *Obser   | *65*  | *65*  | *65*  | *65*  | *65*  |
|                 | vations* |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *        | *0.5* | *0.3* | *0.1* | *0.2* | *0.6* |
|                 | Standard |       |       |       |       |       |
|                 | error*   |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| Wireline rival  | Average  | **1   | **    | **    | **    | **1   |
|                 |          | 0.3** | 2.4** | 0.7** | 0.4** | 3.7** |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *Obser   | *50*  | *50*  | *50*  | *50*  | *50*  |
|                 | vations* |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *        | *0.4* | *0.2* | *0.2* | *0.1* | *0.5* |
|                 | Standard |       |       |       |       |       |
|                 | error*   |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| DBS competition | Average  | **1   | **    | **    | **    | **1   |
| \*              |          | 4.2** | 1.8** | 0.9** | 0.6** | 7.5** |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *Obser   | *52*  | *52*  | *52*  | *52*  | *52*  |
|                 | vations* |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *        | *0.8* | *0.2* | *0.2* | *0.1* | *0.9* |
|                 | Standard |       |       |       |       |       |
|                 | error*   |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| Wireless        | Average  | **1   | **    | **    | **    | **1   |
| competition \*  |          | 1.9** | 2.8** | 0.6** | 2.8** | 8.1** |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *Obser   | *29*  | *29*  | *29*  | *29*  | *29*  |
|                 | vations* |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *        | *0.4* | *0.3* | *0.1* | *0.3* | *0.6* |
|                 | Standard |       |       |       |       |       |
|                 | error*   |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| Low penetration | Average  | **1   | **    | **    | **    | **1   |
| test            |          | 1.0** | 1.9** | 0.6** | 0.7** | 4.2** |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *Obser   | *39*  | *39*  | *39*  | *39*  | *39*  |
|                 | vations* |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
|                 | *        | *0.6* | *0.3* | *0.1* | *0.2* | *0.7* |
|                 | Standard |       |       |       |       |       |
|                 | error*   |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+
| \* These        |          |       |       |       |       |       |
| averages        |          |       |       |       |       |       |
| include cable   |          |       |       |       |       |       |
| system prices   |          |       |       |       |       |       |
| in communities  |          |       |       |       |       |       |
| with an         |          |       |       |       |       |       |
| Effective       |          |       |       |       |       |       |
| Competition     |          |       |       |       |       |       |
| finding based   |          |       |       |       |       |       |
| on DBS or       |          |       |       |       |       |       |
| wireless        |          |       |       |       |       |       |
| competition,    |          |       |       |       |       |       |
| but not the     |          |       |       |       |       |       |
| prices charged  |          |       |       |       |       |       |
| by the          |          |       |       |       |       |       |
| competing DBS   |          |       |       |       |       |       |
| or wireless     |          |       |       |       |       |       |
| system.         |          |       |       |       |       |       |
| *Source:*       |          |       |       |       |       |       |
| Survey.         |          |       |       |       |       |       |
+-----------------+----------+-------+-------+-------+-------+-------+

**Joint Statement of**

**Commissioners Michael J. Copps and Jonathan S. Adelstein**

**Concurring**

Re: Implementation of Section 3 of the Cable Television Consumer
Protection and Competition Act of 1992; Statistical Report on Average
Rates for Basic Service Cable Programming Service and Equipment

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

In Sections 623(k) and 628(g), Congress charged the Commission with
reporting annually on cable rates and on the status of competition in
the market for the delivery of video programming. As the government's
expert agency, Congress expected the Commission to gather comprehensive
data and subject it to in-depth analysis in these reports.
Unfortunately, in these reports, the Commission gathers less than
adequate data and conducts less analysis than it did even a few years
ago. At a time of significant increases in rates year after year,
Congress and consumers deserve a better effort from the FCC.

We took issue with our Report on cable rates last year because we
believed the analysis was insufficient. At that time, the Commission
recognized the report's shortcomings, noting that "in several previous
surveys, we included an econometric analysis of the survey results." The
Commission further stated its "plan to resume the econometric analysis
in subsequent reports." Yet, this year, the Commission again fails to
conduct this analysis which in the past has provided information on
specific factors that influence rate increases and the extent of that
influence. Moreover, the Commission once again did not audit any of its
results, notwithstanding problems with our methodology disclosed in a
recent report from the General Accounting Office.

We remain concerned that this year's competition report continues to
serve mainly as a recitation of the record rather than providing an
in-depth analysis of the status of competition. As with last year's
version, this report fails to examine adequately the circumstances that
distinguish those places where competition is occurring and those where
it is not, and to evaluate barriers to greater competition. And it fails
to consider sufficiently many of the important issues raised in the
Notice, such as the impact of increasing vertical and horizontal
consolidation of our media. In sum, the report seldom delves beneath the
surface.

In part, the fault lies with the limited data we received in response to
our notices. But it is also incumbent on the Commission to undertake a
pro-active and comprehensive information-gathering effort and then to
commit the resources necessary to analyze the data.

We recognize that there have been some positive steps in these reports
in response to previous criticisms. For example, we are pleased that we
have at long last begun to analyze what is happening in other countries.
In addition, we are also pleased that we have added a separate section
that focuses specifically on video program distribution in rural areas.
In future years, we would like to see us build on the discussions here.

Finally, notwithstanding the concerns we have expressed with our
reports, none of our comments should take away from the large
investments that have been made by those that deliver video programming.
Nor do our concerns with the reports diminish the benefits American
consumers receive as new services are deployed. These investments and
services come not only from existing participants in the market but also
from telephone companies and others that are expanding their efforts to
deliver video programming. But these reports serve as the factual
foundation for many Commission decisions as well as providing Congress
with statutorily-mandated information that can inform the national
policy debate. We have an obligation to do more to gather accurate and
complete data as well as provide the information and analysis that
Congress required.

[^1]: Section 623(k) was adopted as Section 3(k) of the 1992 Cable Act,
    Pub. L. No. 102-385, 106 Stat. 1460, codified at 47 U.S.C. §
    543(k)*.*

[^2]: *See* 47 U.S.C. § 543(k). The term "service tier" refers to a
    group of video channels for which the operator charges a separate
    rate. *See* 47 U.S.C. § 522(l7). The 1992 Cable Act defines basic
    service as the tier that includes the retransmission of local
    television broadcast signals. *See* 7 U.S.C. § 543(b)(7). Cable
    programming service consists of any video programming other than
    that carried on the basic service tier and other than programming
    for which the operator charges a per channel or per program fee.
    *See* 47 U.S.C. § 543(k)(1)(2). Equipment refers to a converter box,
    remote control, and other equipment necessary to access programming.
    *See* 47 U.S.C. § 543(b)(3).

[^3]: The Commission directed cable operators to respond to certain data
    requests, pursuant to Section 623(k) of the Communications Act, 47
    U.S.C. § 543(k). *See Implementation of Section 3 of the Cable
    Television Consumer Protection and Competition Act of 1992*,
    *Statistical Report on Average Prices for Basic Service, Cable
    Programming Services, and Equipment*, 19 FCC Rcd 325 (2004).

[^4]: The Commission grants petitions for determinations of effective
    competition for any cable operator that meets one of four tests in a
    community: (1) fewer than 30 percent of households subscribe to the
    cable operator's service (herein referred to as the "low penetration
    test"); (2) at least two multi-channel video programming
    distributors ("MVPDs") serve 50 percent or more of households and at
    least 15 percent of those households take service other than from
    the largest MVPD (the "50/15 test"); (3) a municipal MVPD offers
    service to at least 50 percent of households (the "municipal test");
    or (4) a local exchange carrier ("LEC") or its affiliate (or any
    using the facilities of the LEC or its affiliate) offers MVPD
    service (other than direct broadcast satellite service) comparable
    to the service of an unaffiliated MVPD (the "LEC test"). See 47
    U.S.C. § 543(l)(1)(A-D). As of January 1, 2004, the competitive
    group consisted of 997 communities, or 3 percent of cable
    communities nationwide, serving an estimated 8 percent of cable
    subscribers nationwide. Cable operators are not subject to rate
    regulation in communities where the Commission has made a finding of
    effective competition. In other communities, local franchise
    authorities may regulate the rates of the basic service tier and
    cable equipment. See 47 U.S.C. § 543(l)(2).

[^5]: DBS penetration now exceeds 20 percent of television households in
    some 30 states, and 30 percent in five states. *See* *Annual
    Assessment of the Status of Competition in the Market for the
    Delivery of Video Programming,* 17 FCC Rcd 1273 (2002).

[^6]: The term \"overbuild\" describes the situation in which a second
    cable operator enters a local market in direct competition with an
    incumbent cable operator. In these markets, the second operator, or
    \"overbuilder,\" lays wires in the same area as the incumbent,
    \"overbuilding\" the incumbent\'s plant, thereby giving consumers a
    choice between cable service providers. The "wireline overbuild"
    subgroup includes effective competition findings under the 50/15
    test, the municipal test, and the LEC test, unless the finding
    involves (1) a wireless MVPD in which case that community is
    included in the "wireless overbuild" subgroup; or (2) a DBS operator
    in which case that community is included in the "DBS" subgroup. ^?^
    S*ee* also note 4.

[^7]: Expanded basic service typically meets two criteria among the
    cable programming service tiers that a cable operator may offer: (1)
    it is the tier with the greatest number of channels; and (2) after
    the basic tier, it is the tier with the highest number of
    subscribers.

[^8]: Herein, "local channels" refer to: (1) local broadcast stations
    carried either through must-carry requirement or retransmission
    agreement; (2) PEG access; (3) commercial leased access; and (4)
    other channels of local origination or that cover issues that,
    predominately, affect the specific community, county, or state.
    "Satellite channels" refer to, primarily, nationally-delivered cable
    networks that are, predominately, delivered by satellite to the
    cable headend, but also include regional news or sports networks
    that, in a few cases, are delivered terrestrially.

[^9]: Throughout the Report, the "5-year average" refers to the
    compounded annual rate of change during the five and one-half year
    period starting July 1, 1998 and ending on January 1, 2004.

[^10]: We calculate the price per channel by dividing the monthly cable
    rate by the number of channels. Ideally, when calculating price
    changes, we would like to take into account changes in the quantity
    and quality of service provided. In the case of cable rates and
    quality, however, that is difficult to do because there is no
    readily available measure of service and programming quality.

[^11]: BLS, All Urban Consumers, U.S. City Average (data extracted
    August 17, 2004), Series ID CUUR0000SA0, All Items Less Food and
    Energy, Base Period 1982-84=100 (CPI).

[^12]: BLS, All Urban Consumers, U.S. City Average (data extracted
    August 17, 2004), Series ID CUUR0000SERA02, Cable and Satellite
    Television and Radio Service, Base Period December 1983=100 (Cable
    CPI). This index predominately reflects cable service although it
    includes elements of satellite television and radio service.

[^13]: First, the Cable CPI includes all cable television services,
    while the monthly cable rate consists of basic service, expanded
    basic, and equipment. Second, because the CPI measures change in
    what consumers pay for a fixed basket of goods and services, BLS
    adjusts the cable CPI to reflect estimated changes in cable
    services.

[^14]: Throughout this Report, there is only a slight difference, if
    any, in the overall average and the average for the noncompetitive
    group. This is because the group of operators that have received a
    specific Commission "effective competition" finding represents a
    relatively small group of cable subscribers, an estimated eight
    percent of the total nationwide, and thus there is only a slight
    effect from this group on the overall average.

[^15]: *See* B. J. Mandel, S*tatistics for Management* (1984) at 258.
    This formula requires the user to choose a limit on allowable error
    in terms of the degree and probability that the average for the
    sample of prices may differ from the actual price average. We
    limited the allowable error to within 50 cents of actual price with
    a 95-percent probability.

[^16]: The competitive sample includes a relatively higher percentage of
    competitive communities, because this group is relatively small and
    the sampling formula requires a minimum number for statistical
    precision.

[^17]: For an explanation of stratified sampling methods, *see, e.g.,*
    G. W. Snedecor and W. G. Cochran*, Statistical Methods,* 7^th^ ed.
    (1980) at 435-59 (Snedecor and Cochran).

[^18]: System size equals total subscribers in the communities served
    from the same cable headend. A cable headend is a facility for
    receiving television signals for processing and distribution over
    the cable television system consisting of one or more communities.
    The Commission assigns each cable headend a physical unit identifier
    and each community served by that headend a community unit
    identifier. *See* 47 U.S.C. § 76.1801.

[^19]: *See* Snedecor and Cochran at 464.

[^20]: In prior Surveys we collected data as of July 1.

[^21]: The method we use for each group equals the average monthly rate
    calculated for each stratum times the percent of subscribers in that
    stratum. *See* W. E. Deming, *Some Theory of Sampling* (1950) at
    135-211.

[^22]: This "95-percent confidence interval" is the range surrounding
    the sample average plus or minus 1.955 multiplied by the standard
    error. For example, the average monthly rate for programming and
    equipment as of January 1, 2004 is \$45.32 and the standard error is
    30 cents, as shown in Attachment 2. We estimate at a 95-percent
    confidence level that the true average lies between \$44.72 and
    \$45.92. We arrive at the lower end of the range by subtracting
    1.955 x \$0.30 from our estimated average of \$45.32. We arrive at
    the upper end by adding 1.955 x \$0.30 to \$45.32.

[^23]: This may tend to increase the equipment charge relative to
    previous surveys, but to some extent the higher cost of digital
    equipment is already build into the cost of analog equipment. This
    is because cable operators that are subject to price regulation are
    permitted to average the cost of equipment, including analog and
    digital converters.

[^24]: Some cable operators report that they no longer lease an analog
    addressable converter, because they have fully migrated premium and
    pay-per-view channels to digital service. We also note that a few
    communities in the Survey use channel filters instead of leasing a
    set-top converter. A filter installed on the cable equipment outside
    the home blocks the specific channel until the device is removed. In
    the case of channel filters, the converter price is zero, because no
    monthly charge is associated with the filters.

[^25]: The value of cable services can be measured in various ways. Some
    analysts suggest that accounting for the number of channels
    subscribers receive, along with the respective per channel rate,
    appropriately measures value. Alternatively, others suggest that
    subscribers may not value an increase in the number of channels in
    direct proportion to the number of channels added, and thus the
    additional channels may have a declining marginal value. Because of
    the difficulty of obtaining consumer valuation data, our Survey did
    not seek information on how consumers value the channels they
    receive, or how they would value programming tiers if given the
    option of receiving fewer channels or different channels than those
    offered.

[^26]: *See* note 11.

[^27]: *See* note 12.

[^28]: BLS bases the cable CPI on a survey of items on consumers'
    monthly cable bills, and includes such items as premium services and
    installation costs, which are not included in our monthly average.
    When an item shows a significant change in price, and there is a
    concomitant change in the nature of the product or service, BLS
    attempts to make a quality adjustment. BLS may increase or decrease
    the observed price of an item, depending on whether the change
    deteriorated or improved the quality of the particular product or
    service. In the case of cable service, the addition of channels is
    sometimes perceived as an improvement in quality and thus sometimes
    lowers the reported percentage increase in the price index. *See*
    also note 13.

[^29]: Therefore, Table 5 does not include capital expenses related to
    cable system upgrades and new system builds. *See* Section F of this
    Report in reference to capital expenditures.

[^30]: In addition to the provision of new services, higher capacity
    typically results in additional cable channels, and may result in
    improved signal quality and system reliability. With respect to
    capital improvements, since 1996, cable operators have collectively
    invested approximately \$84.5 billion on upgrading their cable plant
    and networks. *Sources:* 1996 \-- Kagan World Media, *Broadband
    Cable Financial Databook 2001* at 138; 1997 \-- Kagan World Media,
    *Broadband Cable Financial Databook 2002* at 144; 1998--2002 \--
    Kagan World Media, *Broadband Cable Financial Databook 2003* at 142;
    2003 \-- Kagan World Media, *Broadband Cable Financial Databook
    2004* at 154. Kagan projects 2004 plant and network upgrades to
    reach \$9.5 billion.

[^31]: While this table shows advanced services customers as a percent
    of basic cable subscribers, the percentage of basic cable
    subscribers subscribing to Internet access and telephony is lower
    than those percentages. This is because some cable Internet and
    telephony customers do not subscribe to cable television service. As
    of July 2002, an estimated 3.4% of subscribers to cable Internet
    access were not basic cable television subscribers. A comparable
    figure for cable telephony is unavailable. *See* *Statistical Report
    on Average Rates for Basic Service, Cable Programming Service, and
    Equipment,* 18 FCC Rcd 13284 n.16 (2003).

[^32]: *See* A.S. Wise and K. Duwadi, *Competition between Cable
    Television and Direct Broadcast Satellite -- It's More Complicated
    than You Think,* FCC Media Bureau Staff Research Paper 2005-01 and
    International Bureau Working Paper No. 3. (Jan. 2005). The paper
    analyzes price survey data collected in 2003.

[^33]: Wise and Duwadi (2005) used the per-satellite-channel rate for
    the most popular package as a proxy for a quality-adjusted cable
    rate.

[^34]: These learning costs may be substantial, particularly for
    consumers switching from an older, less-advanced cable service to
    DBS service.

[^35]: One analyst states that changes in the market share of total new
    subscribers between cable and DBS indicates a change in consumer
    preference between cable and DBS service, but one primarily confined
    to consumers in the midst of moving to a new home. *See* *Annual
    Assessment of the Status of Competition in the Market for the
    Delivery of Video Programming,* FCC No. 05-13 (adopted Jan. 14,
    2005), citing Douglas Shapiro, "What Changed in the Cable-DBS
    Dynamic in 2Q?," Banc of America Securities, Aug. 27, 2004 at 7.