**DA 02-2568**

**October 9, 2002**

**MEDIA BUReau RELEASES tWO STAFF RESEARCH PAPERS RELEVANT TO**

**the cable ownership rulemaking and the at&T-COMCAST proceedings**

**CS DOCKET NOS. 98-82, 96-85**

**MM DOCKET NOS. 92-264, 94-150, 92-51, 87-154**

**MB DOCKET NO. 02-70**

Federal Communications Commission Media Bureau staff economist, Peter
Alexander, and Nodir Adilov, Department of Economics, Cornell
University, recently co-authored two staff research papers relevant to
the issues in the cable ownership rulemaking[^1] and AT&T-Comcast[^2]
proceedings. By this Public Notice, we inform interested parties that
the Commission will consider these two papers in its deliberations in
the above referenced proceedings. These papers represent the individual
views of their authors and do not necessarily reflect the views of the
Commission, any commissioner, or other staff member.

The first paper, Media Bureau Staff Research Paper No. 13, entitled,
"*Asymmetric Bargaining Power and Pivotal Buyers*," examines the
potential impact of horizontal mergers on buyer bargaining position.
This study shows that, in the case where bargaining power is asymmetric,
it is possible that large merged firms might extract greater concessions
from program suppliers than smaller buyers. These results suggest that
horizontal merger might be used as a strategy to enhance bargaining
position.

The second paper, Media Bureau Staff Research Paper No. 14, entitled,
"*Most-Favored Customers in the Cable Industry*," explores the
implications of most-favored-customer clauses in the cable industry.
This paper finds that the introduction of a most-favored-customer clause
for large buyers will increase their profitability and that the seller's
profits may decrease. The paper then compares its results to the
Bykowsky-Kwasnica-Sharkey experiments[^3] regarding the effect of a
most-favored-customer agreement and finds that the two sets of results
are consistent.

The Media Bureau Staff Research Paper Series is a forum for the Media
Bureau to examine issues that are relevant to our mission. In addition,
these papers will provide information to the Commission in order to
stimulate debate.

Both the rulemaking and the license transfer proceedings are
"permit-but-disclose" for purposes of the Commission's *ex parte*
rules.[^4] *Ex parte* communications will be governed by section
1.206(b) of the Commission's rules.[^5] We urge interested parties
submitting written *ex parte* presentations or summaries of oral *ex
parte* presentations in this proceeding to use the Electronic Comment
Filing System ("ECFS") in accordance with the Commission procedures set
forth in the Commission's *Further Notice* in the cable ownership
proceeding[^6] and its March 29, 2002 *Public Notice* in the
AT&T/Comcast license transfer proceeding.[^7] If using paper *ex parte*
submissions, interested parties must file an original and one copy with
the Commission's Secretary, Marlene H. Dortch, and should follow the
procedures set forth in the aforementioned cable ownership *Further
Notice* and the March 29, 2002 AT&T-Comcast *Public Notice* for sending
their submissions by mail, commercial overnight courier, or hand
delivery. Additionally, interested parties must submit their *ex parte*
filings to the persons identified in the cable ownership *Further
Notice* and the March 29, 2002 AT&T-Comcast *Public Notice*.

Copies of these papers may be obtained from Qualex International,
Portals II, 445 12^th^ Street, SW, Room CY-B402, Washington, DC 20554,
and will also be available through ECFS. These documents are also
available for public inspection and copying during normal reference room
hours at the Commission's Reference Information Center, 445 12^th^
Street, SW, CY-A257, Washington, DC 20554. The documents will be posted
on the Media Bureau's website at
\<[http://www.fcc.gov/mb](http://www.fcc.gov/mb/attcomcast)\>.

Alternate formats of this public notice (computer diskette, large print,
audio recording, and Braille) are available to persons with disabilities
by contacting Brian Millin at (202) 418-7426 voice, (202) 418-7365 TTY,
or email at <bmillin@fcc.gov>.

The media contact for this Public Notice is Michelle Russo, (202)
418-2358. The Media Bureau contact is Royce Sherlock, (202) 418-2330.

**-FCC -**

[^1]: *See* *Implementation of Section 11 of the Cable Television
    Consumer Protection and Competition Act of 1992, Implementation of
    Cable Act Reform Provisions of the Telecommunications of 1996,
    Commission's Cable Horizontal and Vertical Ownership Limits and
    Attribution Rules, Review of the Commission's Regulations Governing
    Attribution of Broadcast and Cable/MDS Interests, Review of the
    Commission's Regulations and Policies Affecting Investment in the
    Broadcast Industry, Reexamination of the Commission's
    Cross-Interest* Policy, CS Docket Nos. 98-82, 96-85, MM Docket Nos.
    92-264, 94-150, 92-51, 87-154, Further Notice of Proposed
    Rulemaking, 16 FCC Rcd 17312 (2001) ("*Further Notice*").

[^2]: *See* *Applications for Consent to the Transfer of Control of
    Licenses from Comcast Corporation and AT&T Corp., Transferors, to
    AT&T Comcast Corporation, Transferee*, MB Docket No. 02-70, Public
    Notice, DA 02-733 (rel. March 29, 2002) ("*Public Notice*"), *as
    modified by* Public Notice, *Erratum and Order Extending Filing
    Deadline*, DA 02-70 (rel. May 3, 2002).

[^3]: *See* Mark Bykowsky, Anthony M. Kwasnica and William Sharkey,
    Federal Communications Commission Office of Plans and Policy, OPP
    Working Paper No. 35, "*Horizontal Concentration in the Cable
    Television Industry: An Experimental Analysis*," (rel. June 3,
    2002).

[^4]: *See generally* 47 C.F.R. §§1.1200-1.1216.

[^5]: 47 C.F.R. § 1.1206(b).

[^6]: *See Further Notice,* 16 FCC Rcd at 17371 ¶ 132.

[^7]: *See Public Notice*.