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: December 20, 2006 Released: December 27, 2006**

By the Commission: Chairman Martin and Commissioner McDowell issuing
separate statements;

Commissioners Copps and Adelstein concurring and issuing separate
statements.

# Introduction

1.  Section 623(k) of the Communications Act, as amended by the Cable
    Television Consumer Protection and Competition Act of 1992 ("Cable
    Act"),[^1] requires the Commission to publish annually a statistical
    report on average rates for the cable basic service tier, cable
    programming service tier, and equipment.[^2] The Cable Act also
    requires the Commission to compare the average rates of cable
    operators subject to "effective competition," as identified through
    specific adjudications, with those of cable operators that have not
    been found subject to effective competition.[^3] This Report is
    issued in compliance with those statutory obligations.

2.  Overall, cable prices increased more than 5 percent last year and by
    93 percent since the period immediately prior to Congress's
    enactment of the Telecommunications Act of 1996. Expanded basic
    prices rose more than 6 percent or twice the rate of inflation last
    year. Prices are 17 percent lower where wireline cable competition
    is present. DBS competition, however, does not appear to constrain
    cable prices -- average prices are the same as or slightly higher in
    communities where DBS was the basis for a finding of effective
    competition than in noncompetitive communities. Finally, increases
    in programming expenses were equivalent to more than half of the
    overall increase in prices for the basic and expanded basic tiers.

# Overview of study

3.  The information and analysis provided in this Report are based on
    the Commission's survey of cable industry prices ("Survey") as of
    January 1, 2005.[^4] The Survey requested data from cable system
    operators serving a random sample of communities. The information
    collected enables the Commission to compare prices charged by
    operators serving: (1) communities where operators have not been
    formally found to meet the statutory test for effective competition
    ("noncompetitive communities"); and (2) communities where cable
    operators have been granted relief from rate regulation for their
    basic-service tier because they meet the statutory test for
    effective competition ("communities relieved from rate regulation").
    We surveyed cable operators that served 497 out of the 31,655
    noncompetitive communities and cable operators that served 228 out
    of the 1,128 communities relieved from rate regulation pursuant to
    the statute.

4.  In selecting cable operators in the communities relieved from
    basic-tier rate regulation, we relied on the Commission's formal
    legal decisions regarding effective competition, based on the
    statutory definition of that term under the Cable Act.[^5] Our list
    of communities relieved from rate regulation is limited to
    adjudicated findings of effective competition. We are unable to take
    into account those areas of the country where the conditions for a
    finding are present, but no finding has been requested or made.

5.  The sample of the communities relieved from rate regulation was
    selected from each of four subgroups according to the primary basis
    for a finding that the statutory test for effective competition had
    been met. These subgroups are comprised of findings of effective
    competition where: (1) a second wireline cable operator serves a
    community in competition with the incumbent cable operator ("second
    cable operator");[^6] (2) a sufficient percentage of households in a
    community subscribe to the multichannel video programming
    distribution ("MVPD") service of a direct broadcast satellite
    ("DBS") provider; (3) a wireless MVPD service provider, such as that
    of a multichannel multipoint distribution service ("MMDS") provider,
    overlaps the service area of a cable operator ("wireless cable
    operator"); and (4) the incumbent cable operator met the low
    penetration test at the time of the finding ("low penetration"). In
    the second cable operator subgroup, we sampled both incumbents and
    second cable operators. In the DBS, wireless cable operator, and low
    penetration subgroups, only incumbent cable operators were sampled.

6.  Of the communities relieved from rate regulation, 733 communities
    met the statutory test for effective competition on the basis of DBS
    competition,[^7] 147 met the test due to competition between cable
    operators, 137 met the test because cable operators faced
    competition from wireless MMDS operators, and cable operators in 111
    communities met the test due to low penetration.

7.  Cable operators were asked to complete a questionnaire for each of
    the communities they serve that were selected for the sample. The
    Survey focused on basic programming and expanded basic programming
    (or cable programming service) because these are the service
    packages required by the statute. Eighty-four percent of subscribers
    take at least basic-plus-expanded-basic service, and 16 percent take
    basic service only.[^8] The basic service tier consists of local
    broadcast stations; PEG access channels; and typically a few
    additional channels that may be of local, regional, or national
    origination. Subscribers must purchase basic service in order to
    subscribe to the expanded basic tier. The channels on the expanded
    basic tier are made up mostly of national cable networks.[^9]
    Operators were asked to report monthly prices of basic and expanded
    basic service as of January 1, 2005 and January 1, 2004, which
    permitted us to calculate the annual percentage change.

8.  In addition to the monthly prices for basic and expanded basic
    service, the questionnaire asked for prices of the most highly
    subscribed digital service tier, customer-premises equipment
    charges, and service installation charges. Information was gathered
    on factors that may affect prices, including programming expenses;
    operating capacity; and number of subscribers to program tiers,
    Internet access service, and telephony. Averages for each of these
    elements were calculated by sample subgroup, sample group, and
    overall as a weighted average of the sample groups.[^10]

9.  Section III, below, provides a summary of the Survey's findings
    regarding average prices for basic and expanded basic programming.
    The January 1, 2005 averages are reported along with annual
    percentage changes. Section IV provides additional information and
    tables regarding those findings as well as other Survey findings.
    Section V presents an econometric analysis estimating the effects of
    market concentration on cable rates and the effects on cable rates
    in communities where the statutory test for effective competition
    has been met. Section VI presents conclusions, and Section VII
    covers administrative matters. Attachment 1 is an overview of the
    sample, and Attachments 2 through 11 provide additional statistics,
    including estimates of statistical sampling variances for the
    reported price averages. In addition, Appendix A describes the
    Survey design and sampling procedure and Appendix B describes in
    greater depth the econometric analysis presented in Section V.

# Summary of findings

10. *Averages for all communities.* The average monthly price for
    basic-plus-expanded basic service increased by 5.2 percent, from
    \$40.91 to \$43.04, over the 12 months ending January 1, 2005. The
    price for basic-only service increased by 3.3 percent, from \$13.84
    to \$14.30, and the price for expanded basic service increased by
    6.2 percent, from \$27.07 to \$28.74. As shown in the chart below,
    since the period immediately preceding enactment of the
    Telecommunications Act of 1996, prices have risen by 93
    percent.[^11]

11. *Differences between noncompetitive communities and communities
    relieved from basic-tier rate regulation.*[^12] In noncompetitive
    communities, the average monthly price for basic-plus-expanded basic
    programming increased by 5.2 percent, from \$41.18 to \$43.33 over
    the 12 months ending January 1, 2005. In communities where the
    statutory test for effective competition was found to have been met,
    the average price for basic-plus-expanded basic programming
    increased by 4.9 percent, from \$38.29 to \$40.15 over the 12 months
    ending January 1, 2005. Thus, as of January 1, 2005, the prices
    charged for basic-plus-expanded basic programming in noncompetitive
    communities (\$43.33) averaged 7.9 percent higher than the prices
    charged in communities relieved from basic-tier rate regulation
    (\$40.15).

12. The price difference varied by the basis for the finding that the
    statutory test for effective competition was met. Prices were 20.6
    percent higher in noncompetitive communities compared to prices in
    communities with second wireline cable operators, whereas cable
    prices were only 7.1 percent higher, 1.4 percent higher and about
    the same when compared to, respectively, prices in communities with
    low cable penetration, where a wireless cable competitor is present,
    or where DBS penetration is the reason for the effective competition
    finding.

13. The chart below shows the average prices for basic-plus-expanded
    basic service for noncompetitive communities and communities
    relieved from rate regulation.

    ![](media/image1.wmf){width="6.260416666666667in"
    height="2.6458333333333335in"}

14. Cable prices decrease substantially when a second wireline cable
    operator enters the market. It does not appear from these results
    that DBS effectively constrains cable prices. Thus, in the large
    number of communities in which there has been a finding that the
    statutory test for effective competition has been met due to the
    presence of DBS service, competition does not appear to be
    restraining price as it does in the small number of communities with
    a second cable operator.
    ![](media/image2.wmf){width="6.374305555555556in"
    height="3.9715277777777778in"}

15. Recent experience in Hong Kong provides further evidence that
    wireline competitors can constrain cable bills. Between 1995 and
    2002, cable bills for subscribers of the leading cable service
    provider, i-Cable, grew at a rate 6.5 times faster than prices for
    other goods.[^13] Since 2003, however, when PCCW, by far i-Cable's
    biggest competitor today, entered the market with an a la carte
    offering, i-Cable's average revenue per user has declined by
    approximately 9 percent.[^14]  While cable prices in the U.S.
    increased by 93 percent between 1995 and 2005, i-Cable's subscribers
    experienced only a 3 percent increase in their bills during this
    time period.[^15] The modest overall increase occurred despite the
    fact that both Hong Kong's primary cable provider and its main
    competitor continue to supply many of the most popular U.S. cable
    networks.[^16] Furthermore, i-Cable has moved to differentiate its
    services, by transitioning from large programming packages to
    "mini-packages," or theme packages, to compete with the theme and a
    la carte programming services of its competitors.[^17]

# Survey results

## Basic and Expanded basic Service

16. Table 1 displays average monthly prices for basic and expanded basic
    service. Between January 1, 2004 and January 1, 2005 the price for
    basic-only service increased by 3.3 percent, from \$13.84 to
    \$14.30. Prices for expanded basic increased by 6.2 percent, from
    \$27.07 to \$28.74. Total price for basic-plus-expanded basic tiers
    increased by 5.2 percent, from \$40.91 to \$43.04, with a 10-year
    cumulative increase of 92.6% since the period immediately prior to
    Congress's enactment of the Telecommunications Act of 1996.

+-----------------+-------+---------+--------+-----+----+-----+----+
| **Table 1**     |       |         |        |     |    |     |    |
|                 |       |         |        |     |    |     |    |
| **Monthly       |       |         |        |     |    |     |    |
| Prices**        |       |         |        |     |    |     |    |
+-----------------+-------+---------+--------+-----+----+-----+----+
| **January 1,    | **S   | *       |        | **  |    |     |    |
| 2005**          | ample | *Sample |        | Sub |    |     |    |
|                 | G     | Group** |        | gro |    |     |    |
|                 | roups |         |        | ups |    |     |    |
|                 | Over  |         |        | of  |    |     |    |
|                 | all** |         |        | Co  |    |     |    |
|                 |       |         |        | mmu |    |     |    |
|                 |       |         |        | nit |    |     |    |
|                 |       |         |        | ies |    |     |    |
|                 |       |         |        | Re  |    |     |    |
|                 |       |         |        | lie |    |     |    |
|                 |       |         |        | ved |    |     |    |
|                 |       |         |        | f   |    |     |    |
|                 |       |         |        | rom |    |     |    |
|                 |       |         |        | R   |    |     |    |
|                 |       |         |        | ate |    |     |    |
|                 |       |         |        | Reg |    |     |    |
|                 |       |         |        | ula |    |     |    |
|                 |       |         |        | tio |    |     |    |
|                 |       |         |        | n** |    |     |    |
+-----------------+-------+---------+--------+-----+----+-----+----+
|                 |       | **Non   | **Re   | **C | *  | *   | ** |
|                 |       | -Compet | lieved | abl | *D | *Wi | LP |
|                 |       | itive** | from   | e** | BS | re- | Te |
|                 |       |         | Rate   |     | ** | les | st |
|                 |       |         | Regula |     |    | s** | ** |
|                 |       |         | tion** |     |    |     |    |
+-----------------+-------+---------+--------+-----+----+-----+----+
| **Basic service | *     | **\$    | **\$1  | **  | *  | **  | *  |
| tier**          | *\$14 | 14.25** | 4.80** | \$1 | *\ | \$1 | *\ |
|                 | .30** |         |        | 3.5 | $1 | 3.0 | $1 |
|                 |       |         |        | 9** | 7. | 0** | 6. |
|                 |       |         |        |     | 06 |     | 54 |
|                 |       |         |        |     | ** |     | ** |
+-----------------+-------+---------+--------+-----+----+-----+----+
| Previous year ( | \$    | \$13.79 | \      | \   | \  | \   | \  |
| 2004)           | 13.84 |         | $14.41 | $13 | $1 | $14 | $1 |
|                 |       |         |        | .01 | 5. | .29 | 6. |
|                 |       |         |        |     | 92 |     | 07 |
+-----------------+-------+---------+--------+-----+----+-----+----+
| 1-year percent  | 3.3%  | 3.3%    | 2.7%   | 4   | 7. | -9  | 2. |
| change\*\*      |       |         |        | .5% | 2% | .0% | 9% |
+-----------------+-------+---------+--------+-----+----+-----+----+
| **Expanded      | *     | **\$    | **\$2  | **  | *  | **  | *  |
| basic tier**    | *\$28 | 29.08** | 5.35** | \$2 | *\ | \$2 | *\ |
|                 | .74** |         |        | 2.3 | $2 | 9.7 | $2 |
|                 |       |         |        | 5** | 6. | 4** | 3. |
|                 |       |         |        |     | 28 |     | 93 |
|                 |       |         |        |     | ** |     | ** |
+-----------------+-------+---------+--------+-----+----+-----+----+
| Previous year   | \$    | \$27.39 | \      | \   | \  | \   | \  |
| (2004)          | 27.07 |         | $23.88 | $21 | $2 | $26 | $2 |
|                 |       |         |        | .12 | 5. | .90 | 2. |
|                 |       |         |        |     | 32 |     | 72 |
+-----------------+-------+---------+--------+-----+----+-----+----+
| 1-year percent  | 6.2%  | 6.2%    | 6.2%   | 5   | 3. | 10  | 5. |
| change\*\*      |       |         |        | .8% | 8% | .6% | 3% |
+-----------------+-------+---------+--------+-----+----+-----+----+
| **Basic &       | *     | **\$    | **\$4  | **  | *  | **  | *  |
| expanded        | *\$43 | 43.33** | 0.15** | \$3 | *\ | \$4 | *\ |
| basic**         | .04** |         |        | 5.9 | $4 | 2.7 | $4 |
|                 |       |         |        | 4** | 3. | 4** | 0. |
|                 |       |         |        |     | 34 |     | 47 |
|                 |       |         |        |     | ** |     | ** |
+-----------------+-------+---------+--------+-----+----+-----+----+
| 1 year ago      | \$    | \$41.18 | \      | \   | \  | \   | \  |
| (2004)          | 40.91 |         | $38.29 | $34 | $4 | $41 | $3 |
|                 |       |         |        | .13 | 1. | .19 | 8. |
|                 |       |         |        |     | 24 |     | 79 |
+-----------------+-------+---------+--------+-----+----+-----+----+
| 10 years ago    | \$    | \$22.35 | \      | \-  | \  | \-  | \  |
| (1995)\*        | 22.35 |         | $21.64 | \-- | -\ | \-- | -\ |
|                 |       |         |        |     | -- |     | -- |
+-----------------+-------+---------+--------+-----+----+-----+----+
| 1-year change   | 5.2%  | 5.2%    | 4.9%   | 5   | 5. | 3   | 4. |
| in price        |       |         |        | .3% | 1% | .8% | 3% |
+-----------------+-------+---------+--------+-----+----+-----+----+
| 10-year         | 92.6% | 93.9%   | 85.5%  | \-  | \  | \-  | \  |
| cumulative      |       |         |        | \-- | -\ | \-- | -\ |
| change          |       |         |        |     | -- |     | -- |
+-----------------+-------+---------+--------+-----+----+-----+----+
| **Percentage    |       |         |        |     |    |     |    |
| that            |       |         |        |     |    |     |    |
| Noncompetitive  |       |         |        |     |    |     |    |
| Group is Higher |       |         |        |     |    |     |    |
| or Lower,**     |       |         |        |     |    |     |    |
|                 |       |         |        |     |    |     |    |
| **Comparing     |       |         |        |     |    |     |    |
| Prices of       |       |         |        |     |    |     |    |
| Basi            |       |         |        |     |    |     |    |
| c-Plus-Expanded |       |         |        |     |    |     |    |
| basic Service** |       |         |        |     |    |     |    |
+-----------------+-------+---------+--------+-----+----+-----+----+
| Year 2005       | \-\-- | \-\--   | 7.9%   | 20  | 0. | 1   | 7. |
|                 |       |         |        | .6% | 0% | .4% | 1% |
+-----------------+-------+---------+--------+-----+----+-----+----+
| Year 2004       | \-\-- | \-\--   | 7.5%   | 20  | -  | 0   | 6. |
|                 |       |         |        | .7% | 0. | .0% | 2% |
|                 |       |         |        |     | 1% |     |    |
+-----------------+-------+---------+--------+-----+----+-----+----+
| Year 1995       | \-\-- | \-\--   | 3.3%   | \-  | \  | \-  | \  |
|                 |       |         |        | \-- | -\ | \-- | -\ |
|                 |       |         |        |     | -- |     | -- |
+-----------------+-------+---------+--------+-----+----+-----+----+
| Sources:        |       |         |        |     |    |     |    |
| Attachments 2,  |       |         |        |     |    |     |    |
| 10, and 11. \*  |       |         |        |     |    |     |    |
| 1995 data       |       |         |        |     |    |     |    |
| unavailable by  |       |         |        |     |    |     |    |
| type of         |       |         |        |     |    |     |    |
| competition.    |       |         |        |     |    |     |    |
| \*\* 10-year    |       |         |        |     |    |     |    |
| cumulative data |       |         |        |     |    |     |    |
| unavailable     |       |         |        |     |    |     |    |
| because these   |       |         |        |     |    |     |    |
| data were not   |       |         |        |     |    |     |    |
| collected in    |       |         |        |     |    |     |    |
| 1995.           |       |         |        |     |    |     |    |
+-----------------+-------+---------+--------+-----+----+-----+----+

17. Table 1 also shows that prices in noncompetitive communities for
    basic and expanded basic service also increased by 5.2 percent over
    the latest twelve months, from \$41.18 to \$43.33, with a 10-year
    cumulative increase of 93.9 percent. Further, Table 1 shows that in
    communities relieved from rate regulation, prices increased by 4.9
    percent, from \$38.29 to \$40.15 (with a 10-year cumulative increase
    of 85.5 percent). Table 1 also shows the percentage differences
    between the prices charged for basic-plus-expanded basic service in
    communities relieved from rate regulation overall and the four
    subgroups of these communities compared with noncompetitive
    communities. As of January 1, 2005, the prices charged by the
    noncompetitive communities were on average 7.9 percent higher than
    the prices charged in communities relieved from rate regulation. The
    price difference varied by subgroup. Prices were 20.6 percent higher
    in noncompetitive communities compared to prices in communities with
    a second cable operator; this figure was notably higher than the
    differential presented in other competitive scenarios. Prices were
    7.1 percent higher, 1.4 percent higher, and at about the same level
    in noncompetitive communities compared to, respectively, prices in
    communities deemed competitive by virtue of low penetration,
    wireless cable operators, or DBS providers.

18. The Bureau of Labor Statistics ("BLS") publishes a Consumer Price
    Index ("CPI") that measures general price inflation through changes
    in the prices of a selected group of goods and services.[^18] By
    this measure, general inflation increased by 3.0 percent over the 12
    months ending January 2005, significantly less than cable prices
    rose during that time period.[^19]

19. In prior years, the Commission calculated the average rates per
    channel. This data is not included in the 2005 Price Survey Report
    because of the weaknesses associated with using it. The average rate
    per channel does not reflect the prices offered to consumers because
    cable operators do not permit consumers to purchase channels
    included in the expanded basic package on an individual basis, nor
    do they provide refunds to consumers who opt to have certain
    channels blocked. If cable operators offered consumers the option to
    purchase channels individually, it would be appropriate to consider
    the prices charged to consumers for those channels. Further, the use
    of the average rate per channel as a proxy implies that recently
    added channels are of equal value to previously existing channels.
    For example, the use of this data as a proxy would suggest that
    quality-adjusted prices would be unchanged if there were a 10
    percent increase in monthly cable rates and a 10 percent increase in
    the number of channels; however, this does not take into account how
    consumers might value the additional channels. In particular, a
    consumer who placed no value on the additional channels would see a
    10 percent increase in his or her monthly cable rates, but no
    increase in quality.

20. Table 2 displays information on programming expenses incurred by
    cable operators related to the provision of basic and expanded basic
    service. These expenses include changes in fees for existing
    programming as well as additional fees for new programming added
    during the year. Table 2 shows that programming expenses increased
    on an average monthly basis by \$1.12 per subscriber, from year 2003
    to year 2004. The change by sample group equaled \$1.10 and \$1.36,
    respectively, for the noncompetitive communities and communities
    relieved from rate regulation. Table 2 also shows that the change in
    programming expenses associated with providing basic and expanded
    basic service was roughly equivalent to 53 percent of the change in
    the price charged for basic and expanded basic service. By sample
    group, this percentage was equivalent to 51 percent and 73 percent,
    respectively, for noncompetitive communities and communities
    relieved from rate regulation.

+--------------+-------+-----------+---------+-----+-----+-----+-----+
| **Table 2**  |       |           |         |     |     |     |     |
|              |       |           |         |     |     |     |     |
| **Change in  |       |           |         |     |     |     |     |
| Monthly      |       |           |         |     |     |     |     |
| Programming  |       |           |         |     |     |     |     |
| Expense Per  |       |           |         |     |     |     |     |
| Subscriber** |       |           |         |     |     |     |     |
|              |       |           |         |     |     |     |     |
| **Basic and  |       |           |         |     |     |     |     |
| Expanded     |       |           |         |     |     |     |     |
| Basic        |       |           |         |     |     |     |     |
| Service**    |       |           |         |     |     |     |     |
+--------------+-------+-----------+---------+-----+-----+-----+-----+
| **Change     | **S   | **Sample  |         | **  |     |     |     |
| in**         | ample | Group**   |         | Sub |     |     |     |
|              | G     |           |         | gro |     |     |     |
| **P          | roups |           |         | ups |     |     |     |
| rogramming** | Over  |           |         | of  |     |     |     |
|              | all** |           |         | Co  |     |     |     |
| **Expense**  |       |           |         | mmu |     |     |     |
|              |       |           |         | nit |     |     |     |
|              |       |           |         | ies |     |     |     |
|              |       |           |         | Re  |     |     |     |
|              |       |           |         | lie |     |     |     |
|              |       |           |         | ved |     |     |     |
|              |       |           |         | f   |     |     |     |
|              |       |           |         | rom |     |     |     |
|              |       |           |         | R   |     |     |     |
|              |       |           |         | ate |     |     |     |
|              |       |           |         | Reg |     |     |     |
|              |       |           |         | ula |     |     |     |
|              |       |           |         | tio |     |     |     |
|              |       |           |         | n** |     |     |     |
+--------------+-------+-----------+---------+-----+-----+-----+-----+
|              |       | *         | **R     | **C | *   | *   | *   |
|              |       | *Non-Comp | elieved | abl | *DB | *Wi | *LP |
|              |       | etitive** | from    | e** | S** | re- | Tes |
|              |       |           | Rate    |     |     | les | t** |
|              |       |           | Regul   |     |     | s** |     |
|              |       |           | ation** |     |     |     |     |
+--------------+-------+-----------+---------+-----+-----+-----+-----+
| Year 2003 to | \     | \$1.10    | \$1.36  | \$1 | \$1 | \$1 | \$1 |
| year 2004    | $1.12 |           |         | .34 | .47 | .19 | .45 |
+--------------+-------+-----------+---------+-----+-----+-----+-----+
| Percent of   | 53%   | 51%       | 73%     | 74% | 70% | 77% | 86% |
| price change |       |           |         |     |     |     |     |
+--------------+-------+-----------+---------+-----+-----+-----+-----+
| Source:      |       |           |         |     |     |     |     |
| Attachment   |       |           |         |     |     |     |     |
| 9.           |       |           |         |     |     |     |     |
+--------------+-------+-----------+---------+-----+-----+-----+-----+

21. Cable operators sometimes can reduce their per-unit programming
    costs by increasing their subscriber reach. For example, with
    respect to Time Warner and Comcast\'s acquisition of Adelphia
    Communications, industry analysts maintain that \"Time Warner may
    win larger discounts from \[programming\] networks that were only on
    Adelphia\'s systems, since Time Warner would be under no obligation
    to carry them and could therefore drive a better bargain.[^20]
    Analysts observe, however, that these cost savings are unlikely to
    benefit consumers directly. Time Warner, for example, \"is likely to
    use the money \[saved\] to offer new services that produce revenue,
    like digital phones and video-on-demand. Consumers \[would\] get
    discounts for buying bundles of services, but they also \[would\]
    spend more money."[^21]

## Digital Service

22. Table 3 displays information on the prices charged for the most
    highly subscribed digital tier plus equipment consisting of a
    digital set-top converter and remote control unit. For all
    communities sampled, over the 12 months ending January 1, 2005, the
    price for this tier and equipment increased by 1.2 percent, to
    \$12.99. The average number of digital channels received on the most
    highly subscribed digital tier increased by 7.7 percent, to 33.7
    channels. In addition to an average of 33.7 channels offered on the
    most highly subscribed digital tier, cable operators offered other
    digital video channels, including mini-tiers, premium channels, and
    pay-per-view. These included an average of 11.6 high definition
    television ("HDTV") channels, for those cable operators who have
    deployed HDTV service, and 108.1 non-HDTV digital channels.

+------------------+------+--------+--------+-----+-----+-----+-----+
| **Table 3**      |      |        |        |     |     |     |     |
|                  |      |        |        |     |     |     |     |
| **Digital Tier   |      |        |        |     |     |     |     |
| Plus Equipment** |      |        |        |     |     |     |     |
+------------------+------+--------+--------+-----+-----+-----+-----+
| **January 1,     | **Sa | **     |        | **  |     |     |     |
| 2005**           | mple | Sample |        | Sub |     |     |     |
|                  | Gr   | G      |        | gro |     |     |     |
|                  | oups | roup** |        | ups |     |     |     |
|                  | O    |        |        | of  |     |     |     |
|                  | vera |        |        | Co  |     |     |     |
|                  | ll** |        |        | mmu |     |     |     |
|                  |      |        |        | nit |     |     |     |
|                  |      |        |        | ies |     |     |     |
|                  |      |        |        | Re  |     |     |     |
|                  |      |        |        | lie |     |     |     |
|                  |      |        |        | ved |     |     |     |
|                  |      |        |        | f   |     |     |     |
|                  |      |        |        | rom |     |     |     |
|                  |      |        |        | R   |     |     |     |
|                  |      |        |        | ate |     |     |     |
|                  |      |        |        | Reg |     |     |     |
|                  |      |        |        | ula |     |     |     |
|                  |      |        |        | tio |     |     |     |
|                  |      |        |        | n** |     |     |     |
+------------------+------+--------+--------+-----+-----+-----+-----+
|                  |      | *      | **Re   | **C | *   | *   | *   |
|                  |      | *Non-c | lieved | abl | *DB | *Wi | *LP |
|                  |      | ompeti | from   | e** | S** | re- | Tes |
|                  |      | tive** | Rate   |     |     | les | t** |
|                  |      |        | Regula |     |     | s** |     |
|                  |      |        | tion** |     |     |     |     |
+------------------+------+--------+--------+-----+-----+-----+-----+
| **Monthly price  | **\  | **\$1  | **\$1  | **  | **  | **  | *   |
| \***             | $12. | 3.10** | 1.85** | \$1 | \$1 | \$1 | *\$ |
|                  | 99** |        |        | 3.1 | 1.1 | 1.4 | 6.6 |
|                  |      |        |        | 1** | 0** | 1** | 5** |
+------------------+------+--------+--------+-----+-----+-----+-----+
| 1-year percent   | 1.2% | 1.6%   | -1.8%  | -1  | -3  | -0  | 9   |
| change           |      |        |        | .4% | .5% | .5% | .4% |
+------------------+------+--------+--------+-----+-----+-----+-----+
| **Digital tier   | **33 | **     | **     | **  | **  | **  | **  |
| channels \***    | .7** | 33.6** | 34.2** | 35. | 35. | 31. | 20. |
|                  |      |        |        | 8** | 1** | 6** | 4** |
+------------------+------+--------+--------+-----+-----+-----+-----+
| 1-year percent   | 7.7% | 7.7%   | 5.6%   | 6   | -0  | 17  | 5   |
| change           |      |        |        | .9% | .3% | .0% | .2% |
+------------------+------+--------+--------+-----+-----+-----+-----+
| **HDTV channels  | **11 | **     | **     | **  | **  | **  | *   |
| \*\***           | .6** | 11.5** | 11.6** | 12. | 11. | 11. | *9. |
|                  |      |        |        | 1** | 2** | 6** | 7** |
+------------------+------+--------+--------+-----+-----+-----+-----+
| **Other digital  | *    | **1    | **1    | **1 | **1 | **1 | **1 |
| channels**       | *108 | 07.6** | 13.8** | 20. | 13. | 04. | 00. |
|                  | .1** |        |        | 0** | 4** | 5** | 6** |
+------------------+------+--------+--------+-----+-----+-----+-----+
| Sources:         |      |        |        |     |     |     |     |
| Attachments 2,   |      |        |        |     |     |     |     |
| 3, and 9. \*     |      |        |        |     |     |     |     |
| Average for the  |      |        |        |     |     |     |     |
| most-highly      |      |        |        |     |     |     |     |
| subscribed       |      |        |        |     |     |     |     |
| digital tier.    |      |        |        |     |     |     |     |
| \*\* HDTV        |      |        |        |     |     |     |     |
| includes local   |      |        |        |     |     |     |     |
| broadcast        |      |        |        |     |     |     |     |
| simulcasts and   |      |        |        |     |     |     |     |
| multicasts, and  |      |        |        |     |     |     |     |
| all other types  |      |        |        |     |     |     |     |
| of HDTV          |      |        |        |     |     |     |     |
| programming      |      |        |        |     |     |     |     |
| channels.        |      |        |        |     |     |     |     |
+------------------+------+--------+--------+-----+-----+-----+-----+

## Distribution of Channels

23. Table 4 shows the average number of channels offered to cable
    subscribers, by category of programming, as of January 1, 2005.
    Table 4 divides analog programming into two categories: (1)
    basic-plus-expanded basic channels; and (2) other analog channels,
    consisting of premium, pay-per-view, and mini-tiers. This latter
    category averaged only 3.3 channels because many such channels have
    been moved

+---------------------+------+--------+---------+-----+----+----+----+
| **Table 4**         |      |        |         |     |    |    |    |
|                     |      |        |         |     |    |    |    |
| **Distribution of   |      |        |         |     |    |    |    |
| Channels**          |      |        |         |     |    |    |    |
+---------------------+------+--------+---------+-----+----+----+----+
| **January 1, 2005** | **Sa | **     |         | **  |    |    |    |
|                     | mple | Sample |         | Sub |    |    |    |
|                     | Gr   | G      |         | gro |    |    |    |
|                     | oups | roup** |         | ups |    |    |    |
|                     | O    |        |         | of  |    |    |    |
|                     | vera |        |         | Co  |    |    |    |
|                     | ll** |        |         | mmu |    |    |    |
|                     |      |        |         | nit |    |    |    |
|                     |      |        |         | ies |    |    |    |
|                     |      |        |         | Re  |    |    |    |
|                     |      |        |         | lie |    |    |    |
|                     |      |        |         | ved |    |    |    |
|                     |      |        |         | f   |    |    |    |
|                     |      |        |         | rom |    |    |    |
|                     |      |        |         | R   |    |    |    |
|                     |      |        |         | ate |    |    |    |
|                     |      |        |         | Reg |    |    |    |
|                     |      |        |         | ula |    |    |    |
|                     |      |        |         | tio |    |    |    |
|                     |      |        |         | n** |    |    |    |
+---------------------+------+--------+---------+-----+----+----+----+
|                     |      | *      | **R     | **C | *  | *  | ** |
|                     |      | *Non-c | elieved | abl | *D | *W | LP |
|                     |      | ompeti | from    | e** | BS | ir | Te |
|                     |      | tive** | Rate    |     | ** | e- | st |
|                     |      |        | Regul   |     |    | le | ** |
|                     |      |        | ation** |     |    | ss |    |
|                     |      |        |         |     |    | ** |    |
+---------------------+------+--------+---------+-----+----+----+----+
| **Analog            |      |        |         |     |    |    |    |
| Programming**       |      |        |         |     |    |    |    |
+---------------------+------+--------+---------+-----+----+----+----+
| Local broadcast     | 12.3 | 12.4   | 11.5    | 1   | 11 | 11 | 11 |
| stations            |      |        |         | 1.2 | .8 | .6 | .2 |
+---------------------+------+--------+---------+-----+----+----+----+
| Public,             | 2.6  | 2.6    | 2.7     | 3.0 | 2  | 2  | 3  |
| educational, &      |      |        |         |     | .8 | .0 | .4 |
| govt. access        |      |        |         |     |    |    |    |
+---------------------+------+--------+---------+-----+----+----+----+
| Local commercial    | 0.7  | 0.7    | 0.6     | 0.7 | 0  | 0  | 0  |
| leased access       |      |        |         |     | .4 | .9 | .3 |
+---------------------+------+--------+---------+-----+----+----+----+
| Other local,        | [5   | [54.6] | [57.    | [59 | [5 | [5 | [5 |
| regional, &         | 4.9] | {.unde | 2]{.und | .0] | 5. | 6. | 3. |
| national            | {.un | rline} | erline} | {.u | 5] | 8] | 8] |
|                     | derl |        |         | nde | {. | {. | {. |
|                     | ine} |        |         | rli | un | un | un |
|                     |      |        |         | ne} | de | de | de |
|                     |      |        |         |     | rl | rl | rl |
|                     |      |        |         |     | in | in | in |
|                     |      |        |         |     | e} | e} | e} |
+---------------------+------+--------+---------+-----+----+----+----+
| **Basic & expanded  | **70 | **     | *       | **  | ** | ** | ** |
| basic tiers**       | .5** | 70.3** | *72.0** | 73. | 70 | 71 | 68 |
|                     |      |        |         | 9** | .5 | .3 | .7 |
|                     |      |        |         |     | ** | ** | ** |
+---------------------+------+--------+---------+-----+----+----+----+
| Other analog        | [    | [3.3]  | [3.     | [2  | [  | [  | [  |
| channels            | 3.3] | {.unde | 3]{.und | .1] | 4. | 4. | 5. |
|                     | {.un | rline} | erline} | {.u | 0] | 0] | 8] |
|                     | derl |        |         | nde | {. | {. | {. |
|                     | ine} |        |         | rli | un | un | un |
|                     |      |        |         | ne} | de | de | de |
|                     |      |        |         |     | rl | rl | rl |
|                     |      |        |         |     | in | in | in |
|                     |      |        |         |     | e} | e} | e} |
+---------------------+------+--------+---------+-----+----+----+----+
| **Total**           | **73 | **     | *       | **  | ** | ** | ** |
|                     | .8** | 73.6** | *75.3** | 76. | 74 | 75 | 74 |
|                     |      |        |         | 0** | .5 | .3 | .5 |
|                     |      |        |         |     | ** | ** | ** |
+---------------------+------+--------+---------+-----+----+----+----+
| **Digital           |      |        |         |     |    |    |    |
| Programming**       |      |        |         |     |    |    |    |
+---------------------+------+--------+---------+-----+----+----+----+
| Most highly         | 33.7 | 33.6   | 34.2    | 3   | 35 | 31 | 20 |
| subscribed tier     |      |        |         | 5.8 | .1 | .6 | .4 |
+---------------------+------+--------+---------+-----+----+----+----+
| HDTV channels       | 11.6 | 11.5   | 11.6    | 1   | 11 | 11 | 9  |
|                     |      |        |         | 2.1 | .2 | .6 | .7 |
+---------------------+------+--------+---------+-----+----+----+----+
| Other digital       | [10  | [      | [113.   | [   | [  | [  | [  |
| channels            | 8.1] | 107.6] | 8]{.und | 120 | 11 | 10 | 10 |
|                     | {.un | {.unde | erline} | .0] | 3. | 4. | 0. |
|                     | derl | rline} |         | {.u | 4] | 5] | 6] |
|                     | ine} |        |         | nde | {. | {. | {. |
|                     |      |        |         | rli | un | un | un |
|                     |      |        |         | ne} | de | de | de |
|                     |      |        |         |     | rl | rl | rl |
|                     |      |        |         |     | in | in | in |
|                     |      |        |         |     | e} | e} | e} |
+---------------------+------+--------+---------+-----+----+----+----+
| **Total**           | *    | **1    | **      | **1 | *  | *  | *  |
|                     | *153 | 52.7** | 159.6** | 67. | *1 | *1 | *1 |
|                     | .4** |        |         | 9** | 59 | 47 | 30 |
|                     |      |        |         |     | .7 | .7 | .7 |
|                     |      |        |         |     | ** | ** | ** |
+---------------------+------+--------+---------+-----+----+----+----+
| Sources:            |      |        |         |     |    |    |    |
| Attachments 3 and   |      |        |         |     |    |    |    |
| 9. Number of        |      |        |         |     |    |    |    |
| channels does not   |      |        |         |     |    |    |    |
| include music or    |      |        |         |     |    |    |    |
| other audio         |      |        |         |     |    |    |    |
| channels.           |      |        |         |     |    |    |    |
+---------------------+------+--------+---------+-----+----+----+----+

to digital service. Table 4 also divides digital channels into three
categories: (1) most highly subscribed digital tier; (2) HDTV channels;
and (3) other digital channels including premium, pay-per-view, and
mini-tiers. HDTV includes local broadcast channels as well as other
programming transmitted in high definition.

## Subscriber Equipment

24. Table 5 shows that over the 12 months ending January 1, 2005, the
    average monthly price charged for leased equipment (consisting of an
    addressable set-top converter and remote control unit) increased by
    5.3 percent, to \$4.39, for analog equipment; by 3.7 percent, to
    \$4.99, for digital equipment; and by 2.3 percent, to \$7.08, for
    HDTV equipment. As of January 1, 2005, the price of a CableCARD
    averaged \$1.09 per month.

+-----------------+-------+--------+--------+-----+-----+-----+-----+
| **Table 5**     |       |        |        |     |     |     |     |
|                 |       |        |        |     |     |     |     |
| **Monthly       |       |        |        |     |     |     |     |
| Equipment       |       |        |        |     |     |     |     |
| Prices**        |       |        |        |     |     |     |     |
+-----------------+-------+--------+--------+-----+-----+-----+-----+
| **January 1,    | **S   | **     |        | **  |     |     |     |
| 2005**          | ample | Sample |        | Sub |     |     |     |
|                 | G     | G      |        | gro |     |     |     |
|                 | roups | roup** |        | ups |     |     |     |
|                 | Over  |        |        | of  |     |     |     |
|                 | all** |        |        | Co  |     |     |     |
|                 |       |        |        | mmu |     |     |     |
|                 |       |        |        | nit |     |     |     |
|                 |       |        |        | ies |     |     |     |
|                 |       |        |        | Re  |     |     |     |
|                 |       |        |        | lie |     |     |     |
|                 |       |        |        | ved |     |     |     |
|                 |       |        |        | f   |     |     |     |
|                 |       |        |        | rom |     |     |     |
|                 |       |        |        | R   |     |     |     |
|                 |       |        |        | ate |     |     |     |
|                 |       |        |        | Reg |     |     |     |
|                 |       |        |        | ula |     |     |     |
|                 |       |        |        | tio |     |     |     |
|                 |       |        |        | n** |     |     |     |
+-----------------+-------+--------+--------+-----+-----+-----+-----+
|                 |       | *      | **Re   | **C | *   | *   | *   |
|                 |       | *Non-C | lieved | abl | *DB | *Wi | *LP |
|                 |       | ompeti | from   | e** | S** | re- | Tes |
|                 |       | tive** | Rate   |     |     | les | t** |
|                 |       |        | Regula |     |     | s** |     |
|                 |       |        | tion** |     |     |     |     |
+-----------------+-------+--------+--------+-----+-----+-----+-----+
| **Analog        | **\$4 | **\$   | **\$   | *   | *   | *   | *   |
| equipment**     | .39** | 4.38** | 4.54** | *\$ | *\$ | *\$ | *\$ |
|                 |       |        |        | 4.2 | 4.4 | 5.1 | 5.2 |
|                 |       |        |        | 9** | 3** | 2** | 2** |
+-----------------+-------+--------+--------+-----+-----+-----+-----+
| 1-year percent  | 5.3%  | 5.3%   | 6.1%   | 5   | 9   | 2   | 6   |
| change          |       |        |        | .1% | .7% | .6% | .7% |
+-----------------+-------+--------+--------+-----+-----+-----+-----+
| **Digital       | **\$4 | **\$   | **\$   | *   | *   | *   | *   |
| equipment**     | .99** | 4.98** | 5.07** | *\$ | *\$ | *\$ | *\$ |
|                 |       |        |        | 5.3 | 4.7 | 5.4 | 2.8 |
|                 |       |        |        | 1** | 7** | 2** | 7** |
+-----------------+-------+--------+--------+-----+-----+-----+-----+
| 1-year percent  | 3.7%  | 3.8%   | 4.5%   | 4   | 6   | 2   | 4   |
| change          |       |        |        | .3% | .2% | .7% | .0% |
+-----------------+-------+--------+--------+-----+-----+-----+-----+
| **HDTV          | **\$7 | **\$   | **\$   | *   | *   | *   | *   |
| equipment**     | .08** | 7.08** | 7.08** | *\$ | *\$ | *\$ | *\$ |
|                 |       |        |        | 6.9 | 7.3 | 6.8 | 7.2 |
|                 |       |        |        | 4** | 8** | 2** | 9** |
+-----------------+-------+--------+--------+-----+-----+-----+-----+
| 1-year percent  | 2.3%  | 2.3%   | 2.0%   | 0   | 2   | 6   | -5  |
| change          |       |        |        | .0% | .6% | .6% | .9% |
+-----------------+-------+--------+--------+-----+-----+-----+-----+
| **CableCARD     | **\$1 | **\$   | **\$   | *   | *   | *   | *   |
| \***            | .09** | 1.04** | 1.63** | *\$ | *\$ | *\$ | *\$ |
|                 |       |        |        | 1.9 | 1.6 | 1.0 | 1.6 |
|                 |       |        |        | 3** | 1** | 9** | 4** |
+-----------------+-------+--------+--------+-----+-----+-----+-----+
| Source:         |       |        |        |     |     |     |     |
| Attachment 5.   |       |        |        |     |     |     |     |
| \* Survey data  |       |        |        |     |     |     |     |
| was first       |       |        |        |     |     |     |     |
| collected as of |       |        |        |     |     |     |     |
| January 1,      |       |        |        |     |     |     |     |
| 2005.           |       |        |        |     |     |     |     |
+-----------------+-------+--------+--------+-----+-----+-----+-----+

25. Table 6 displays the price for analog programming plus equipment,
    consisting of basic and expanded basic programming and the lease of
    an addressable analog converter and remote control. This total
    equaled \$47.43 as of January 1, 2005, based on the price for
    basic-plus-expanded basic tiers of \$43.04 (shown in Table 1) and
    equipment costs of \$4.39 (Table 5). Only 76 percent of cable
    subscribers had an addressable analog converter made available to
    them as of January 1, 2005, as compared to 79 percent as of January
    1, 2004.[^22]

+--------------+--------+---------+---------+-----+-----+-----+-----+
| **Table 6**  |        |         |         |     |     |     |     |
|              |        |         |         |     |     |     |     |
| **Average    |        |         |         |     |     |     |     |
| Price for    |        |         |         |     |     |     |     |
| Programming  |        |         |         |     |     |     |     |
| and          |        |         |         |     |     |     |     |
| Equipment**  |        |         |         |     |     |     |     |
+--------------+--------+---------+---------+-----+-----+-----+-----+
| **January 1, | **     | *       |         | **  |     |     |     |
| 2005**       | Sample | *Sample |         | Sub |     |     |     |
|              | Groups | Group** |         | gro |     |     |     |
|              | Ove    |         |         | ups |     |     |     |
|              | rall** |         |         | of  |     |     |     |
|              |        |         |         | Co  |     |     |     |
|              |        |         |         | mmu |     |     |     |
|              |        |         |         | nit |     |     |     |
|              |        |         |         | ies |     |     |     |
|              |        |         |         | Re  |     |     |     |
|              |        |         |         | lie |     |     |     |
|              |        |         |         | ved |     |     |     |
|              |        |         |         | f   |     |     |     |
|              |        |         |         | rom |     |     |     |
|              |        |         |         | R   |     |     |     |
|              |        |         |         | ate |     |     |     |
|              |        |         |         | Reg |     |     |     |
|              |        |         |         | ula |     |     |     |
|              |        |         |         | tio |     |     |     |
|              |        |         |         | n** |     |     |     |
+--------------+--------+---------+---------+-----+-----+-----+-----+
|              |        | **Non   | **R     | **C | *   | *   | *   |
|              |        | -Compet | elieved | abl | *DB | *Wi | *LP |
|              |        | itive** | from    | e** | S** | re- | Tes |
|              |        |         | Rate    |     |     | les | t** |
|              |        |         | Regul   |     |     | s** |     |
|              |        |         | ation** |     |     |     |     |
+--------------+--------+---------+---------+-----+-----+-----+-----+
| **Monthly    | **\$4  | **\$    | **\$    | **  | **  | **  | **  |
| Price**      | 7.43** | 47.71** | 44.69** | \$4 | \$4 | \$4 | \$4 |
|              |        |         |         | 0.2 | 7.7 | 7.8 | 5.6 |
|              |        |         |         | 3** | 7** | 6** | 9** |
+--------------+--------+---------+---------+-----+-----+-----+-----+
| 1-year       | 5.2%   | 5.2%    | 5.0%    | 5   | 5   | 3   | 4   |
| percent      |        |         |         | .3% | .5% | .6% | .6% |
| change       |        |         |         |     |     |     |     |
+--------------+--------+---------+---------+-----+-----+-----+-----+
| Sources:     |        |         |         |     |     |     |     |
| Tables 1 and |        |         |         |     |     |     |     |
| 5.           |        |         |         |     |     |     |     |
+--------------+--------+---------+---------+-----+-----+-----+-----+

##  {#section .unnumbered}

## Service Installation Charges

26. Table 7 displays the price of non-recurring charges that cable
    television subscribers may incur for service installation. As of
    January 1, 2005, the average charge to install cable service was
    \$45.94 in a home not previously wired for cable and \$32.22 in a
    pre-wired residence (excluding any promotional discounts).
    Subscribers were charged \$28.81 on average for service
    reconnection. The average charge to install a CableCARD was \$18.86
    for an existing cable customer and \$24.70 for a new cable customer.

+---------------+-------+---------+---------+-----+-----+-----+-----+
| **Table 7**   |       |         |         |     |     |     |     |
|               |       |         |         |     |     |     |     |
| **Service     |       |         |         |     |     |     |     |
| Installation  |       |         |         |     |     |     |     |
| Charges**     |       |         |         |     |     |     |     |
+---------------+-------+---------+---------+-----+-----+-----+-----+
| **January 1,  | **S   | *       |         | **  |     |     |     |
| 2005**        | ample | *Sample |         | Sub |     |     |     |
|               | G     | Group** |         | gro |     |     |     |
|               | roups |         |         | ups |     |     |     |
|               | Over  |         |         | of  |     |     |     |
|               | all** |         |         | Co  |     |     |     |
|               |       |         |         | mmu |     |     |     |
|               |       |         |         | nit |     |     |     |
|               |       |         |         | ies |     |     |     |
|               |       |         |         | Re  |     |     |     |
|               |       |         |         | lie |     |     |     |
|               |       |         |         | ved |     |     |     |
|               |       |         |         | f   |     |     |     |
|               |       |         |         | rom |     |     |     |
|               |       |         |         | R   |     |     |     |
|               |       |         |         | ate |     |     |     |
|               |       |         |         | Reg |     |     |     |
|               |       |         |         | ula |     |     |     |
|               |       |         |         | tio |     |     |     |
|               |       |         |         | n** |     |     |     |
+---------------+-------+---------+---------+-----+-----+-----+-----+
|               |       | **Non   | **R     | **C | *   | *   | *   |
|               |       | -Compet | elieved | abl | *DB | *Wi | *LP |
|               |       | itive** | from    | e** | S** | re- | Tes |
|               |       |         | Rate    |     |     | les | t** |
|               |       |         | Regul   |     |     | s** |     |
|               |       |         | ation** |     |     |     |     |
+---------------+-------+---------+---------+-----+-----+-----+-----+
| **Unwired     | *     | **\$    | **\$    | **  | **  | **  | **  |
| home**        | *\$45 | 45.98** | 45.47** | \$4 | \$4 | \$4 | \$4 |
|               | .94** |         |         | 4.5 | 4.5 | 9.4 | 0.9 |
|               |       |         |         | 5** | 9** | 2** | 3** |
+---------------+-------+---------+---------+-----+-----+-----+-----+
| 1-year        | 1.3%  | 1.4%    | 0.2%    | -0  | -1  | 4   | 4   |
| percent       |       |         |         | .8% | .5% | .7% | .4% |
| change        |       |         |         |     |     |     |     |
+---------------+-------+---------+---------+-----+-----+-----+-----+
| **Pre-wired   | *     | **\$    | **\$    | **  | **  | **  | **  |
| home**        | *\$32 | 32.23** | 32.14** | \$3 | \$3 | \$3 | \$3 |
|               | .22** |         |         | 0.4 | 3.1 | 3.3 | 3.8 |
|               |       |         |         | 6** | 7** | 7** | 9** |
+---------------+-------+---------+---------+-----+-----+-----+-----+
| 1-year        | 1.9%  | 2.2%    | -0.7%   | -2  | -2  | 4   | 5   |
| percent       |       |         |         | .7% | .2% | .8% | .9% |
| change        |       |         |         |     |     |     |     |
+---------------+-------+---------+---------+-----+-----+-----+-----+
| **Service     | *     | **\$    | **\$    | **  | **  | **  | **  |
| r             | *\$28 | 28.80** | 28.85** | \$2 | \$2 | \$3 | \$2 |
| econnection** | .81** |         |         | 4.7 | 9.7 | 5.5 | 6.8 |
|               |       |         |         | 3** | 5** | 3** | 5** |
+---------------+-------+---------+---------+-----+-----+-----+-----+
| 1-year        | 1.6%  | 1.9%    | -1.4%   | -1  | -2  | -1  | 6   |
| percent       |       |         |         | .0% | .1% | .6% | .4% |
| change        |       |         |         |     |     |     |     |
+---------------+-------+---------+---------+-----+-----+-----+-----+
| *             | *     | **\$    | **\$    | **  | **  | **  | *   |
| *CableCARD,** | *\$18 | 18.87** | 18.71** | \$1 | \$1 | \$2 | *\$ |
|               | .86** |         |         | 8.1 | 9.2 | 0.6 | 6.3 |
| Current       |       |         |         | 2** | 2** | 3** | 3** |
| subscriber    |       |         |         |     |     |     |     |
+---------------+-------+---------+---------+-----+-----+-----+-----+
| *             | *     | **\$    | **\$    | **  | **  | **  | *   |
| *CableCARD,** | *\$24 | 24.68** | 24.82** | \$1 | \$2 | \$3 | *\$ |
|               | .70** |         |         | 9.6 | 6.3 | 4.4 | 9.1 |
| New           |       |         |         | 0** | 1** | 6** | 8** |
| subscriber    |       |         |         |     |     |     |     |
+---------------+-------+---------+---------+-----+-----+-----+-----+
| Source:       |       |         |         |     |     |     |     |
| Attachment 5. |       |         |         |     |     |     |     |
+---------------+-------+---------+---------+-----+-----+-----+-----+

## System Operating Capacity

27. Table 8 shows that system operating capacity averaged 736 MHz as of
    January 1, 2005. This represents a 0.3 percent increase over the
    previous year. By sample group, noncompetitive communities averaged
    734 MHz, and communities relieved from rate regulation averaged 754
    MHz.

+----------------+------+---------+---------+-----+-----+-----+-----+
| **Table 8**    |      |         |         |     |     |     |     |
|                |      |         |         |     |     |     |     |
| **System       |      |         |         |     |     |     |     |
| Operating      |      |         |         |     |     |     |     |
| Capacity**     |      |         |         |     |     |     |     |
+----------------+------+---------+---------+-----+-----+-----+-----+
| **January 1,   | **Sa | *       |         | **  |     |     |     |
| 2005**         | mple | *Sample |         | Sub |     |     |     |
|                | Gr   | Group** |         | gro |     |     |     |
|                | oups |         |         | ups |     |     |     |
|                | O    |         |         | of  |     |     |     |
|                | vera |         |         | Co  |     |     |     |
|                | ll** |         |         | mmu |     |     |     |
|                |      |         |         | nit |     |     |     |
|                |      |         |         | ies |     |     |     |
|                |      |         |         | Re  |     |     |     |
|                |      |         |         | lie |     |     |     |
|                |      |         |         | ved |     |     |     |
|                |      |         |         | f   |     |     |     |
|                |      |         |         | rom |     |     |     |
|                |      |         |         | R   |     |     |     |
|                |      |         |         | ate |     |     |     |
|                |      |         |         | Reg |     |     |     |
|                |      |         |         | ula |     |     |     |
|                |      |         |         | tio |     |     |     |
|                |      |         |         | n** |     |     |     |
+----------------+------+---------+---------+-----+-----+-----+-----+
|                |      | **Non   | **R     | **C | *   | *   | *   |
|                |      | -Compet | elieved | abl | *DB | *Wi | *LP |
|                |      | itive** | from    | e** | S** | re- | Tes |
|                |      |         | Rate    |     |     | Les | t** |
|                |      |         | Regul   |     |     | s** |     |
|                |      |         | ation** |     |     |     |     |
+----------------+------+---------+---------+-----+-----+-----+-----+
| **Capacity, in | **7  | **734** | **754** | *   | *   | *   | *   |
| MHz**          | 36** |         |         | *75 | *75 | *75 | *72 |
|                |      |         |         | 6** | 1** | 8** | 9** |
+----------------+------+---------+---------+-----+-----+-----+-----+
| 1-year percent | 0.3% | 0.0%    | 2.7%    | n/a | n/a | n/a | n/a |
| change         |      |         |         |     |     |     |     |
+----------------+------+---------+---------+-----+-----+-----+-----+
| Source:        |      |         |         |     |     |     |     |
| Attachments 6, |      |         |         |     |     |     |     |
| 10, and 11.    |      |         |         |     |     |     |     |
| n/a: not       |      |         |         |     |     |     |     |
| available.     |      |         |         |     |     |     |     |
+----------------+------+---------+---------+-----+-----+-----+-----+

28. Table 9 shows that 19 percent of subscribers were served by a system
    with operating capacity of greater than 750 MHz as of January
    1, 2005. About two-thirds of all subscribers (68 percent) were
    served by systems that operated at 750 MHz. Only 13 percent of
    subscribers were served by systems with an operating capacity below
    750 MHz.

+-------------+--------+---------+---------+-----+-----+-----+-----+
| **Table 9** |        |         |         |     |     |     |     |
|             |        |         |         |     |     |     |     |
| *           |        |         |         |     |     |     |     |
| *Percentage |        |         |         |     |     |     |     |
| of          |        |         |         |     |     |     |     |
| Su          |        |         |         |     |     |     |     |
| bscribers** |        |         |         |     |     |     |     |
|             |        |         |         |     |     |     |     |
| **by        |        |         |         |     |     |     |     |
| Capacity of |        |         |         |     |     |     |     |
| Cable       |        |         |         |     |     |     |     |
| System**    |        |         |         |     |     |     |     |
+-------------+--------+---------+---------+-----+-----+-----+-----+
| **January   | **     | *       |         | **  |     |     |     |
| 1, 2005**   | Sample | *Sample |         | Sub |     |     |     |
|             | Groups | Group** |         | gro |     |     |     |
|             | Ove    |         |         | ups |     |     |     |
|             | rall** |         |         | of  |     |     |     |
|             |        |         |         | Co  |     |     |     |
|             |        |         |         | mmu |     |     |     |
|             |        |         |         | nit |     |     |     |
|             |        |         |         | ies |     |     |     |
|             |        |         |         | Re  |     |     |     |
|             |        |         |         | lie |     |     |     |
|             |        |         |         | ved |     |     |     |
|             |        |         |         | f   |     |     |     |
|             |        |         |         | rom |     |     |     |
|             |        |         |         | R   |     |     |     |
|             |        |         |         | ate |     |     |     |
|             |        |         |         | Reg |     |     |     |
|             |        |         |         | ula |     |     |     |
|             |        |         |         | tio |     |     |     |
|             |        |         |         | n** |     |     |     |
+-------------+--------+---------+---------+-----+-----+-----+-----+
|             |        | **Non   | **R     | **C | *   | *   | *   |
|             |        | -Compet | elieved | abl | *DB | *Wi | *LP |
|             |        | itive** | from    | e** | S** | re- | Tes |
|             |        |         | Rate    |     |     | les | t** |
|             |        |         | Regul   |     |     | s** |     |
|             |        |         | ation** |     |     |     |     |
+-------------+--------+---------+---------+-----+-----+-----+-----+
| Above 750   | 19%    | 18%     | 24%     | 23% | 35% | 7%  | 23% |
| MHz         |        |         |         |     |     |     |     |
+-------------+--------+---------+---------+-----+-----+-----+-----+
| 750 MHz     | 68%    | 69%     | 66%     | 68% | 49% | 93% | 56% |
+-------------+--------+---------+---------+-----+-----+-----+-----+
| 331 - 749   | 11%    | 11%     | 9%      | 9%  | 15% | 0%  | 21% |
| MHz         |        |         |         |     |     |     |     |
+-------------+--------+---------+---------+-----+-----+-----+-----+
| 220 - 330   | 2%     | 2%      | 1%      | 0%  | 1%  | 0%  | 0%  |
| MHz         |        |         |         |     |     |     |     |
+-------------+--------+---------+---------+-----+-----+-----+-----+
| Source:     |        |         |         |     |     |     |     |
| Attachment  |        |         |         |     |     |     |     |
| 6.          |        |         |         |     |     |     |     |
+-------------+--------+---------+---------+-----+-----+-----+-----+

## Service Availability and Subscription

29. Table 10 displays the percentage of cable subscribers that were
    offered various services as of January 1, 2005. It shows that 96
    percent of subscribers could purchase programming in the form of a
    basic tier and an expanded basic tier. The other 4 percent of
    subscribers were offered a basic service tier that included many of
    the national cable networks typically found on the expanded basic
    tier, but were not offered the option of purchasing a separate
    expanded basic tier. Digital programming was offered to 98 percent
    of subscribers.

+--------------------+-------+--------+--------+----+----+----+----+
| **Table 10**       |       |        |        |    |    |    |    |
|                    |       |        |        |    |    |    |    |
| **Availability of  |       |        |        |    |    |    |    |
| Various Cable      |       |        |        |    |    |    |    |
| Services**         |       |        |        |    |    |    |    |
|                    |       |        |        |    |    |    |    |
| **As a Percentage  |       |        |        |    |    |    |    |
| of Cable TV        |       |        |        |    |    |    |    |
| Subscribers**      |       |        |        |    |    |    |    |
+--------------------+-------+--------+--------+----+----+----+----+
| **January 1,       | **S   | **     |        | *  |    |    |    |
| 2005**             | ample | Sample |        | *S |    |    |    |
|                    | G     | G      |        | ub |    |    |    |
|                    | roups | roup** |        | gr |    |    |    |
|                    | Over  |        |        | ou |    |    |    |
|                    | all** |        |        | ps |    |    |    |
|                    |       |        |        | of |    |    |    |
|                    |       |        |        | C  |    |    |    |
|                    |       |        |        | om |    |    |    |
|                    |       |        |        | mu |    |    |    |
|                    |       |        |        | ni |    |    |    |
|                    |       |        |        | ti |    |    |    |
|                    |       |        |        | es |    |    |    |
|                    |       |        |        | Re |    |    |    |
|                    |       |        |        | li |    |    |    |
|                    |       |        |        | ev |    |    |    |
|                    |       |        |        | ed |    |    |    |
|                    |       |        |        | fr |    |    |    |
|                    |       |        |        | om |    |    |    |
|                    |       |        |        | Ra |    |    |    |
|                    |       |        |        | te |    |    |    |
|                    |       |        |        | Re |    |    |    |
|                    |       |        |        | gu |    |    |    |
|                    |       |        |        | la |    |    |    |
|                    |       |        |        | ti |    |    |    |
|                    |       |        |        | on |    |    |    |
|                    |       |        |        | ** |    |    |    |
+--------------------+-------+--------+--------+----+----+----+----+
|                    |       | **Non- | **Re   | *  | *  | *  | ** |
|                    |       | c      | lieved | *C | *D | *W | LP |
|                    |       | ompeti | from   | ab | BS | ir | Te |
|                    |       | tive** | Rate   | le | ** | e- | st |
|                    |       |        | Regula | ** |    | le | ** |
|                    |       |        | tion** |    |    | ss |    |
|                    |       |        |        |    |    | ** |    |
+--------------------+-------+--------+--------+----+----+----+----+
| Expanded basic     | 96%   | 96%    | 95%    | 9  | 9  | 10 | 9  |
| tier               |       |        |        | 6% | 2% | 0% | 4% |
+--------------------+-------+--------+--------+----+----+----+----+
| Digital            | 98%   | 98%    | 98%    | 9  | 9  | 10 | 10 |
| programming        |       |        |        | 5% | 8% | 0% | 0% |
+--------------------+-------+--------+--------+----+----+----+----+
| Cable Internet     | 96%   | 96%    | 96%    | 9  | 9  | 10 | 6  |
| access             |       |        |        | 5% | 8% | 0% | 1% |
+--------------------+-------+--------+--------+----+----+----+----+
| HD programming     | 89%   | 90%    | 81%    | 8  | 7  | 9  | 4  |
|                    |       |        |        | 2% | 3% | 6% | 4% |
+--------------------+-------+--------+--------+----+----+----+----+
| CableCARD          | 88%   | 88%    | 85%    | 8  | 8  | 10 | 3  |
|                    |       |        |        | 0% | 7% | 0% | 9% |
+--------------------+-------+--------+--------+----+----+----+----+
| HDTV local         | 78%   | 79%    | 68%    | 7  | 5  | 8  | 3  |
| broadcast          |       |        |        | 3% | 7% | 1% | 9% |
+--------------------+-------+--------+--------+----+----+----+----+
| Addressable analog | 76%   | 78%    | 58%    | 5  | 4  | 7  | 2  |
| converter          |       |        |        | 8% | 9% | 8% | 8% |
+--------------------+-------+--------+--------+----+----+----+----+
| Sports channels    | 63%   | 63%    | 63%    | 6  | 5  | 8  | 3  |
| tier               |       |        |        | 2% | 2% | 5% | 9% |
+--------------------+-------+--------+--------+----+----+----+----+
| Cable telephony    | 42%   | 42%    | 41%    | 4  | 2  | 7  | 1  |
|                    |       |        |        | 2% | 5% | 0% | 7% |
+--------------------+-------+--------+--------+----+----+----+----+
| Source: Attachment |       |        |        |    |    |    |    |
| 7.                 |       |        |        |    |    |    |    |
+--------------------+-------+--------+--------+----+----+----+----+

30. ^Table\ 11\ shows\ the\ number\ of\ subscribers\ to\ various\ types\ of\ service\ as\ a\ percentage\ of\ basic\ cable\ subscribers\ to\ whom\ each\ type\ of\ service\ was\ available\ as\ of\ January\ 1,\ 2005.\ It\ shows\ that\ 88\ percent\ of\ subscribers\ purchased\ the\ expanded\ basic\ tier\ when\ it\ was\ available.\ In\ addition,\ 38\ percent\ of\ subscribers\ purchased\ digital\ service\ when\ it\ was\ available;\ 31\ percent\ purchased\ cable\ Internet\ access;\ 9\ percent\ purchased\ cable\ telephony;\ and\ 4\ percent\ purchased\ high\ definition\ programming.\ For\ reference,\ Table\ 11\ also\ shows\ subscribers\ to\ particular\ services\ as\ a\ percent\ of\ all\ basic\ tier\ cable\ subscribers\ regardless\ of\ availability\ of\ each\ service.^

+-----------------+-------+---------+---------+-----+----+-----+----+
| **Table 11**    |       |         |         |     |    |     |    |
|                 |       |         |         |     |    |     |    |
| **Subscribers   |       |         |         |     |    |     |    |
| to Various      |       |         |         |     |    |     |    |
| Cable           |       |         |         |     |    |     |    |
| Services**      |       |         |         |     |    |     |    |
+-----------------+-------+---------+---------+-----+----+-----+----+
| **January 1,    | **S   | *       |         | **  |    |     |    |
| 2005**          | ample | *Sample |         | Sub |    |     |    |
|                 | G     | Group** |         | gro |    |     |    |
|                 | roups |         |         | ups |    |     |    |
|                 | Over  |         |         | of  |    |     |    |
|                 | all** |         |         | Co  |    |     |    |
|                 |       |         |         | mmu |    |     |    |
|                 |       |         |         | nit |    |     |    |
|                 |       |         |         | ies |    |     |    |
|                 |       |         |         | Re  |    |     |    |
|                 |       |         |         | lie |    |     |    |
|                 |       |         |         | ved |    |     |    |
|                 |       |         |         | f   |    |     |    |
|                 |       |         |         | rom |    |     |    |
|                 |       |         |         | R   |    |     |    |
|                 |       |         |         | ate |    |     |    |
|                 |       |         |         | Reg |    |     |    |
|                 |       |         |         | ula |    |     |    |
|                 |       |         |         | tio |    |     |    |
|                 |       |         |         | n** |    |     |    |
+-----------------+-------+---------+---------+-----+----+-----+----+
|                 |       | **Non   | **R     | **C | *  | *   | ** |
|                 |       | -compet | elieved | abl | *D | *Wi | LP |
|                 |       | itive** | from    | e** | BS | re- | Te |
|                 |       |         | Rate    |     | ** | les | st |
|                 |       |         | Regul   |     |    | s** | ** |
|                 |       |         | ation** |     |    |     |    |
+-----------------+-------+---------+---------+-----+----+-----+----+
| **As a          |       |         |         |     |    |     |    |
| Percentage of   |       |         |         |     |    |     |    |
| Cable TV        |       |         |         |     |    |     |    |
| Subscribers to  |       |         |         |     |    |     |    |
| Whom the        |       |         |         |     |    |     |    |
| Particular      |       |         |         |     |    |     |    |
| Service Is      |       |         |         |     |    |     |    |
| Available**     |       |         |         |     |    |     |    |
+-----------------+-------+---------+---------+-----+----+-----+----+
| Expanded basic  | 88%   | 88%     | 88%     | 90% | 8  | 91% | 9  |
| tier            |       |         |         |     | 4% |     | 0% |
+-----------------+-------+---------+---------+-----+----+-----+----+
| Digital         | 38%   | 38%     | 40%     | 39% | 4  | 39% | 5  |
| programming     |       |         |         |     | 0% |     | 4% |
+-----------------+-------+---------+---------+-----+----+-----+----+
| Cable Internet  | 31%   | 31%     | 35%     | 39% | 3  | 30% | 3  |
| access          |       |         |         |     | 3% |     | 2% |
+-----------------+-------+---------+---------+-----+----+-----+----+
| Cable telephony | 9%    | 9%      | 14%     | 17% | 1  | 7%  | 5  |
|                 |       |         |         |     | 2% |     | 2% |
+-----------------+-------+---------+---------+-----+----+-----+----+
| HDTV            | 4%    | 3%      | 4%      | 5%  | 3% | 3%  | 2% |
| programming     |       |         |         |     |    |     |    |
+-----------------+-------+---------+---------+-----+----+-----+----+
| **As a          |       |         |         |     |    |     |    |
| Percentage of   |       |         |         |     |    |     |    |
| All Cable TV    |       |         |         |     |    |     |    |
| Subscribers**   |       |         |         |     |    |     |    |
+-----------------+-------+---------+---------+-----+----+-----+----+
| Expanded basic  | 84%   | 84%     | 86%     | 87% | 8  | 91% | 8  |
| tier            |       |         |         |     | 2% |     | 5% |
+-----------------+-------+---------+---------+-----+----+-----+----+
| Digital         | 37%   | 37%     | 39%     | 36% | 4  | 39% | 5  |
| programming     |       |         |         |     | 0% |     | 4% |
+-----------------+-------+---------+---------+-----+----+-----+----+
| Cable Internet  | 30%   | 30%     | 34%     | 37% | 3  | 30% | 2  |
| access          |       |         |         |     | 2% |     | 0% |
+-----------------+-------+---------+---------+-----+----+-----+----+
| Cable telephony | 4%    | 4%      | 5%      | 8%  | 3% | 5%  | 9% |
+-----------------+-------+---------+---------+-----+----+-----+----+
| HDTV            | 3%    | 3%      | 3%      | 4%  | 3% | 3%  | 1% |
| programming     |       |         |         |     |    |     |    |
+-----------------+-------+---------+---------+-----+----+-----+----+
| Source:         |       |         |         |     |    |     |    |
| Attachment 8.   |       |         |         |     |    |     |    |
+-----------------+-------+---------+---------+-----+----+-----+----+

# Econometric Analysis

31. In Appendix B of this report, we use econometric analysis to provide
    a more sophisticated examination of the data collected. As described
    in Appendix B, we estimate the effect of market structure and other
    factors on cable prices. Our results show that cable prices tend to
    be higher in local MVPD markets where cable operators have a larger
    share of the market. This relationship may indicate an exploitation
    of market power by dominant firms or may reflect higher costs to
    serve these markets. In addition, we find that prices tend to be
    lower in areas served by vertically integrated cable operators than
    in areas served by unintegrated cable operators, suggesting that
    vertically integrated operators pass some of their cost savings to
    their subscribers. Complete results are described in Appendix B.

# ConclusionS

32. Cable systems found to face effective competition continue to
    exhibit lower prices than cable systems that serve communities in
    which no such finding has been made. As in previous years, the
    competitive differential varied, with the largest differential
    occurring in communities with a second cable operator. Overall, for
    the 12 months ending January 1, 2005, cable prices rose at an
    average rate of 5.2 percent, compared with general inflation of 3.0
    percent for the year ending January 2005.

# VII. ordering clauses {#vii.-ordering-clauses .unnumbered}

33. 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**            |        |         |         |         |
|                             |        |         |         |         |
| **Survey Overview**         |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Sample Groups**           | **     | **Es    | *       | *       |
|                             | Number | timated | *Number | *Survey |
| **And Subgroups \***        | of**   | Percent | of      | Questio |
|                             |        | of**    | Sample  | nnaires |
|                             | **Ob   |         | Observa | Comp    |
|                             | servat | **Cable | tions** | leted** |
|                             | ions** | Subscr  |         |         |
|                             |        | ibers** |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Communities Without a     |        |         |         |         |
| Finding of Effective        |        |         |         |         |
| Competition**               |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Large subgroup**          | 8,396  | 61.3%   | 278     | 278     |
|                             |        |         |         |         |
| Communities served by a     | 3,714  | 14.8%   | 68      | 68      |
| cable system facility:      |        |         |         |         |
|                             | [      | [11.3   | [5      | [5      |
| 1\) of greater than 50,000  | 4,137] | %]{.und | 2]{.und | 1]{.und |
| subscribers                 | {.unde | erline} | erline} | erline} |
|                             | rline} |         |         |         |
| 2\) of 25,001 - 50,000      |        | 87.4%   | 398     | 397     |
| subscribers                 | 16,247 |         |         |         |
|                             |        |         |         |         |
| 3\) of 10,001 - 25,000      |        |         |         |         |
| subscribers                 |        |         |         |         |
|                             |        |         |         |         |
| Total                       |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Medium subgroup**         | 7,600  | 10.1%   | 52      | 48      |
|                             |        |         |         |         |
| Communities served by a     |        |         |         |         |
| cable system facility       |        |         |         |         |
|                             |        |         |         |         |
| of 1,001 - 10,000           |        |         |         |         |
| subscribers                 |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Small subgroup**          | 7,808  | 2.5%    | 47      | 39      |
|                             |        |         |         |         |
| Communities served by a     |        |         |         |         |
| cable system facility       |        |         |         |         |
|                             |        |         |         |         |
| of 1,000 or fewer           |        |         |         |         |
| subscribers                 |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Total for noncompetitive  | **31   | **1     | **497** | **484** |
| sample group**              | ,655** | 00.0%** |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Communities With a        |        |         |         |         |
| Finding of Effective        |        |         |         |         |
| Competition**               |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Communities with second   | 147    | 29.7%   | 56      | 56      |
| cable operator**            |        |         |         |         |
|                             | [147]  | [10.6   | [5      | [5      |
| 1\) Incumbent cable         | {.unde | %]{.und | 6]{.und | 5]{.und |
| operator                    | rline} | erline} | erline} | erline} |
|                             |        |         |         |         |
| 2\) Second cable operator   | 294    | 40.3%   | 112     | 111     |
|                             |        |         |         |         |
| Total                       |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+
| **DBS subgroup**            | 733    | 36.1%   | 125     | 124     |
+-----------------------------+--------+---------+---------+---------+
| **Wireless cable operator   | 137    | 20.8%   | 27      | 27      |
| subgroup**                  |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Low penetration test**    | 111    | 2.8%    | 20      | 18      |
+-----------------------------+--------+---------+---------+---------+
| **Total for effective       | **1    | **1     | **284** | **280** |
| competition sample group**  | ,275** | 00.0%** |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Noncompetitive            |        |         |         |         |
| Communities and Communities |        |         |         |         |
| with a Finding of Effective |        |         |         |         |
| Competition Combined**      |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+
| Noncompetitive sample group | 31,655 | 91.0%   | 497     | 484     |
+-----------------------------+--------+---------+---------+---------+
| Effective competition       | 1,275  | 9.0%    | 284     | 280     |
| sample group                |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+
| **Sample groups combined**  | **32   | **1     | **781** | **764** |
|                             | ,930** | 00.0%** |         |         |
+-----------------------------+--------+---------+---------+---------+
| \* The statistical averages |        |         |         |         |
| reported in this Survey     |        |         |         |         |
| were calculated (a) at the  |        |         |         |         |
| sample subgroup level; (b)  |        |         |         |         |
| then at the group level as  |        |         |         |         |
| a subscriber-weighted       |        |         |         |         |
| average of subgroups; and   |        |         |         |         |
| (c) finally overall as a    |        |         |         |         |
| subscriber-weighted average |        |         |         |         |
| of the noncompetitive       |        |         |         |         |
| communities and communities |        |         |         |         |
| with a finding of effective |        |         |         |         |
| competition. Subscriber     |        |         |         |         |
| weights were based on the   |        |         |         |         |
| percentages in the table    |        |         |         |         |
| column titled "Estimated    |        |         |         |         |
| Percent of Cable            |        |         |         |         |
| Subscribers." For the large |        |         |         |         |
| subgroup, averages were     |        |         |         |         |
| calculated at the           |        |         |         |         |
| subcategory level           |        |         |         |         |
| (\>50,000, 25,001-50,000,   |        |         |         |         |
| and 10,001-25,000) and then |        |         |         |         |
| at the subgroup level as a  |        |         |         |         |
| subscriber-weighted average |        |         |         |         |
| of the subcategories. For   |        |         |         |         |
| the communities with a      |        |         |         |         |
| second cable operator,      |        |         |         |         |
| averages were also          |        |         |         |         |
| calculated at the           |        |         |         |         |
| subcategory level           |        |         |         |         |
| (incumbent and second cable |        |         |         |         |
| operators) and then at the  |        |         |         |         |
| subgroup level as a         |        |         |         |         |
| subscriber-weighted average |        |         |         |         |
| of the subcategories.       |        |         |         |         |
|                             |        |         |         |         |
| Sources: This Survey; FCC   |        |         |         |         |
| Form 322, *Cable Community  |        |         |         |         |
| Registration*, filings      |        |         |         |         |
| pursuant to 47 C.F.R §      |        |         |         |         |
| 76.1801; FCC Form-325,      |        |         |         |         |
| *Annual Cable Operator      |        |         |         |         |
| Report,* filings pursuant   |        |         |         |         |
| to 47 C.F.R § 76.403; and   |        |         |         |         |
| FCC effective competition   |        |         |         |         |
| findings made pursuant to   |        |         |         |         |
| 47 U.S.C. § 543(a)(2) and   |        |         |         |         |
| 47 U.S.C. § 916(a).         |        |         |         |         |
+-----------------------------+--------+---------+---------+---------+

<table>
<colgroup>
<col style="width: 18%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 8%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="14"><p><strong>ATTACHMENT 2</strong></p>
<p><strong>Average Monthly Price</strong></p></td>
</tr>
<tr class="even">
<td colspan="2" rowspan="3"><p><strong>Cable</strong></p>
<p><strong>Service</strong></p>
<p><strong>Tier</strong></p></td>
<td rowspan="3"><strong>Sample Groups Overall</strong></td>
<td rowspan="3"><strong>Non-Comp. Sample</strong></td>
<td colspan="10"><p><strong>Communities With a Finding of Effective
Competition</strong></p>
<p><strong>by Primary Basis for Finding</strong></p></td>
</tr>
<tr class="odd">
<td rowspan="2"><strong>Sample Group Overall</strong></td>
<td colspan="4"><strong>Communities with a Second Cable
Operator</strong></td>
<td colspan="2" rowspan="2"><strong>DBS</strong></td>
<td colspan="2" rowspan="2"><strong>Wire-less</strong></td>
<td rowspan="2"><strong>LP Test</strong></td>
</tr>
<tr class="even">
<td><strong>Sub-group Overall</strong></td>
<td><strong>First Cable System</strong></td>
<td colspan="2"><strong>Rival Cable System</strong></td>
</tr>
<tr class="odd">
<td colspan="14"><strong>January 1, 2005</strong></td>
</tr>
<tr class="even">
<td colspan="2"><strong>Basic</strong></td>
<td><strong>$14.30</strong></td>
<td><strong>$14.25</strong></td>
<td><strong>$14.80</strong></td>
<td><strong>$13.59</strong></td>
<td><strong>$12.43</strong></td>
<td colspan="2"><strong>$16.85</strong></td>
<td colspan="2"><strong>$17.06</strong></td>
<td colspan="2"><strong>$13.00</strong></td>
<td><strong>$16.54</strong></td>
</tr>
<tr class="odd">
<td colspan="2"><em>Standard error</em></td>
<td><em>0.41</em></td>
<td><em>0.38</em></td>
<td><em>0.72</em></td>
<td><em>0.75</em></td>
<td><em>0.56</em></td>
<td colspan="2"><em>1.29</em></td>
<td colspan="2"><em>0.64</em></td>
<td colspan="2"><em>0.69</em></td>
<td><em>1.61</em></td>
</tr>
<tr class="even">
<td colspan="2"><strong>Expanded basic</strong></td>
<td><strong>$28.74</strong></td>
<td><strong>$29.08</strong></td>
<td><strong>$25.35</strong></td>
<td><strong>$22.35</strong></td>
<td><strong>$23.35</strong></td>
<td colspan="2"><strong>$19.53</strong></td>
<td colspan="2"><strong>$26.28</strong></td>
<td colspan="2"><strong>$29.74</strong></td>
<td><strong>$23.93</strong></td>
</tr>
<tr class="odd">
<td colspan="2"><em>Standard error</em></td>
<td><em>0.52</em></td>
<td><em>0.49</em></td>
<td><em>0.90</em></td>
<td><em>0.97</em></td>
<td><em>0.82</em></td>
<td colspan="2"><em>1.39</em></td>
<td colspan="2"><em>0.86</em></td>
<td colspan="2"><em>0.74</em></td>
<td><em>1.82</em></td>
</tr>
<tr class="even">
<td colspan="2"><strong>Basic + expanded basic tiers</strong></td>
<td><strong>$43.04</strong></td>
<td><strong>$43.33</strong></td>
<td><strong>$40.15</strong></td>
<td><strong>$35.94</strong></td>
<td><strong>$35.78</strong></td>
<td colspan="2"><strong>$36.38</strong></td>
<td colspan="2"><strong>$43.34</strong></td>
<td colspan="2"><strong>$42.74</strong></td>
<td><strong>$40.47</strong></td>
</tr>
<tr class="odd">
<td colspan="2"><em>Standard error</em></td>
<td><em>0.32</em></td>
<td><em>0.30</em></td>
<td><em>0.62</em></td>
<td><em>0.88</em></td>
<td><em>0.89</em></td>
<td colspan="2"><em>0.86</em></td>
<td colspan="2"><em>0.44</em></td>
<td colspan="2"><em>0.36</em></td>
<td><em>1.17</em></td>
</tr>
<tr class="even">
<td colspan="2"><p><strong>Digital tier</strong></p>
<p><strong>plus equipment</strong></p></td>
<td><strong>$12.99</strong></td>
<td><strong>$13.10</strong></td>
<td><strong>$11.85</strong></td>
<td><strong>$13.11</strong></td>
<td><strong>$12.68</strong></td>
<td colspan="2"><strong>$14.32</strong></td>
<td colspan="2"><strong>$11.10</strong></td>
<td colspan="2"><strong>$11.41</strong></td>
<td><strong>$6.65</strong></td>
</tr>
<tr class="odd">
<td colspan="2"><em>Standard error</em></td>
<td><em>0.26</em></td>
<td><em>0.23</em></td>
<td><em>0.53</em></td>
<td><em>0.60</em></td>
<td><em>0.53</em></td>
<td colspan="2"><em>0.81</em></td>
<td colspan="2"><em>0.39</em></td>
<td colspan="2"><em>0.54</em></td>
<td><em>1.32</em></td>
</tr>
<tr class="even">
<td colspan="14"><strong>January 1, 2004</strong></td>
</tr>
<tr class="odd">
<td><strong>Basic</strong></td>
<td colspan="2"><strong>$13.84</strong></td>
<td><strong>$13.79</strong></td>
<td><strong>$14.41</strong></td>
<td><strong>$13.01</strong></td>
<td><strong>$11.92</strong></td>
<td><strong>$16.05</strong></td>
<td colspan="2"><strong>$15.92</strong></td>
<td colspan="2"><strong>$14.29</strong></td>
<td colspan="2"><strong>$16.07</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.40</em></td>
<td><em>0.38</em></td>
<td><em>0.70</em></td>
<td><em>0.74</em></td>
<td><em>0.57</em></td>
<td><em>1.22</em></td>
<td colspan="2"><em>0.59</em></td>
<td colspan="2"><em>0.70</em></td>
<td colspan="2"><em>1.48</em></td>
</tr>
<tr class="odd">
<td><strong>Expanded basic</strong></td>
<td colspan="2"><strong>$27.07</strong></td>
<td><strong>$27.39</strong></td>
<td><strong>$23.88</strong></td>
<td><strong>$21.12</strong></td>
<td><strong>$22.08</strong></td>
<td><strong>$18.43</strong></td>
<td colspan="2"><strong>$25.32</strong></td>
<td colspan="2"><strong>$26.90</strong></td>
<td colspan="2"><strong>$22.72</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.51</em></td>
<td><em>0.47</em></td>
<td><em>0.88</em></td>
<td><em>0.95</em></td>
<td><em>0.81</em></td>
<td><em>1.33</em></td>
<td colspan="2"><em>0.81</em></td>
<td colspan="2"><em>0.74</em></td>
<td colspan="2"><em>1.67</em></td>
</tr>
<tr class="odd">
<td><strong>Basic + expanded basic tiers</strong></td>
<td colspan="2"><strong>$40.91</strong></td>
<td><strong>$41.18</strong></td>
<td><strong>$38.29</strong></td>
<td><strong>$34.13</strong></td>
<td><strong>$34.00</strong></td>
<td><strong>$34.48</strong></td>
<td colspan="2"><strong>$41.24</strong></td>
<td colspan="2"><strong>$41.19</strong></td>
<td colspan="2"><strong>$38.79</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.32</em></td>
<td><em>0.29</em></td>
<td><em>0.61</em></td>
<td><em>0.84</em></td>
<td><em>0.85</em></td>
<td><em>0.80</em></td>
<td colspan="2"><em>0.42</em></td>
<td colspan="2"><em>0.43</em></td>
<td colspan="2"><em>1.05</em></td>
</tr>
<tr class="odd">
<td><p><strong>Digital tier</strong></p>
<p><strong>plus equipment</strong></p></td>
<td colspan="2"><strong>$12.83</strong></td>
<td><strong>$12.90</strong></td>
<td><strong>$12.07</strong></td>
<td><strong>$13.30</strong></td>
<td><strong>$13.32</strong></td>
<td><strong>$13.26</strong></td>
<td colspan="2"><strong>$11.50</strong></td>
<td colspan="2"><strong>$11.47</strong></td>
<td colspan="2"><strong>$6.08</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.25</em></td>
<td><em>0.22</em></td>
<td><em>0.56</em></td>
<td><em>0.58</em></td>
<td><em>0.53</em></td>
<td><em>0.73</em></td>
<td colspan="2"><em>0.40</em></td>
<td colspan="2"><em>0.67</em></td>
<td colspan="2"><em>1.34</em></td>
</tr>
<tr class="odd">
<td colspan="14">Sources: Survey.</td>
</tr>
</tbody>
</table>

<table style="width:100%;">
<colgroup>
<col style="width: 20%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 7%" />
<col style="width: 0%" />
<col style="width: 7%" />
<col style="width: 0%" />
<col style="width: 0%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="18"><p><strong>ATTACHMENT 3</strong></p>
<p><strong>Average Number of Channels</strong></p></td>
</tr>
<tr class="even">
<td rowspan="3"><p><strong>Cable</strong></p>
<p><strong>Service</strong></p></td>
<td rowspan="3"><strong>Sample Groups Overall</strong></td>
<td colspan="2" rowspan="3"><strong>Non-Comp. Sample</strong></td>
<td colspan="14"><p><strong>Communities With a Finding of Effective
Competition</strong></p>
<p><strong>by Primary Basis for Finding</strong></p></td>
</tr>
<tr class="odd">
<td colspan="2" rowspan="2"><strong>Sample Group Overall</strong></td>
<td colspan="6"><strong>Communities with a Second Cable
Operator</strong></td>
<td colspan="2" rowspan="2"><strong>DBS</strong></td>
<td colspan="3" rowspan="2"><strong>Wire-less</strong></td>
<td rowspan="2"><strong>LP Test</strong></td>
</tr>
<tr class="even">
<td><strong>Sub-group Overall</strong></td>
<td colspan="2"><strong>First Cable System</strong></td>
<td colspan="3"><strong>Rival Cable System</strong></td>
</tr>
<tr class="odd">
<td colspan="18"><strong>January 1, 2005</strong></td>
</tr>
<tr class="even">
<td><strong>Basic tier</strong></td>
<td colspan="2"><strong>24.9</strong></td>
<td colspan="2"><strong>24.9</strong></td>
<td><strong>24.5</strong></td>
<td colspan="2"><strong>23.8</strong></td>
<td><strong>21.2</strong></td>
<td colspan="3"><strong>30.9</strong></td>
<td colspan="2"><strong>26.0</strong></td>
<td colspan="2"><strong>23.3</strong></td>
<td colspan="2"><strong>24.6</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.7</em></td>
<td colspan="2"><em>0.7</em></td>
<td><em>1.3</em></td>
<td colspan="2"><em>1.5</em></td>
<td><em>0.9</em></td>
<td colspan="3"><em>3.0</em></td>
<td colspan="2"><em>1.2</em></td>
<td colspan="2"><em>1.0</em></td>
<td colspan="2"><em>2.6</em></td>
</tr>
<tr class="even">
<td><strong>Expanded basic tier</strong></td>
<td colspan="2"><strong>45.6</strong></td>
<td colspan="2"><strong>45.4</strong></td>
<td><strong>47.5</strong></td>
<td colspan="2"><strong>50.1</strong></td>
<td><strong>52.0</strong></td>
<td colspan="3"><strong>45.0</strong></td>
<td colspan="2"><strong>44.5</strong></td>
<td colspan="2"><strong>48.0</strong></td>
<td colspan="2"><strong>44.1</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.8</em></td>
<td colspan="2"><em>0.8</em></td>
<td><em>1.5</em></td>
<td colspan="2"><em>1.6</em></td>
<td><em>1.0</em></td>
<td colspan="3"><em>3.1</em></td>
<td colspan="2"><em>1.5</em></td>
<td colspan="2"><em>1.3</em></td>
<td colspan="2"><em>3.4</em></td>
</tr>
<tr class="even">
<td><strong>Basic + expanded</strong></td>
<td colspan="2"><strong>70.5</strong></td>
<td colspan="2"><strong>70.3</strong></td>
<td><strong>72.0</strong></td>
<td colspan="2"><strong>73.9</strong></td>
<td><strong>73.2</strong></td>
<td colspan="3"><strong>75.9</strong></td>
<td colspan="2"><strong>70.5</strong></td>
<td colspan="2"><strong>71.3</strong></td>
<td colspan="2"><strong>68.7</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.6</em></td>
<td colspan="2"><em>0.5</em></td>
<td><em>0.9</em></td>
<td colspan="2"><em>0.9</em></td>
<td><em>0.7</em></td>
<td colspan="3"><em>1.5</em></td>
<td colspan="2"><em>0.9</em></td>
<td colspan="2"><em>0.9</em></td>
<td colspan="2"><em>2.1</em></td>
</tr>
<tr class="even">
<td><strong>Digital tier</strong></td>
<td colspan="2"><strong>33.7</strong></td>
<td colspan="2"><strong>33.6</strong></td>
<td><strong>34.2</strong></td>
<td colspan="2"><strong>35.8</strong></td>
<td><strong>35.1</strong></td>
<td colspan="3"><strong>37.8</strong></td>
<td colspan="2"><strong>35.1</strong></td>
<td colspan="2"><strong>31.6</strong></td>
<td colspan="2"><strong>20.4</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.9</em></td>
<td colspan="2"><em>0.8</em></td>
<td><em>1.6</em></td>
<td colspan="2"><em>1.6</em></td>
<td><em>1.4</em></td>
<td colspan="3"><em>2.1</em></td>
<td colspan="2"><em>1.4</em></td>
<td colspan="2"><em>2.0</em></td>
<td colspan="2"><em>2.9</em></td>
</tr>
<tr class="even">
<td colspan="18"><strong>January 1, 2004</strong></td>
</tr>
<tr class="odd">
<td><strong>Basic tier</strong></td>
<td colspan="2"><strong>24.5</strong></td>
<td colspan="2"><strong>24.5</strong></td>
<td><strong>24.3</strong></td>
<td colspan="2"><strong>23.7</strong></td>
<td colspan="2"><strong>21.3</strong></td>
<td><strong>30.3</strong></td>
<td colspan="2"><strong>25.6</strong></td>
<td colspan="2"><strong>23.6</strong></td>
<td colspan="3"><strong>23.1</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.7</em></td>
<td colspan="2"><em>0.7</em></td>
<td><em>1.3</em></td>
<td colspan="2"><em>1.5</em></td>
<td colspan="2"><em>0.9</em></td>
<td><em>2.9</em></td>
<td colspan="2"><em>1.1</em></td>
<td colspan="2"><em>1.1</em></td>
<td colspan="3"><em>2.7</em></td>
</tr>
<tr class="odd">
<td><strong>Expanded basic tier</strong></td>
<td colspan="2"><strong>44.3</strong></td>
<td colspan="2"><strong>44.0</strong></td>
<td><strong>46.6</strong></td>
<td colspan="2"><strong>48.9</strong></td>
<td colspan="2"><strong>50.6</strong></td>
<td><strong>44.3</strong></td>
<td colspan="2"><strong>43.6</strong></td>
<td colspan="2"><strong>47.6</strong></td>
<td colspan="3"><strong>44.1</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.8</em></td>
<td colspan="2"><em>0.8</em></td>
<td><em>1.5</em></td>
<td colspan="2"><em>1.6</em></td>
<td colspan="2"><em>1.0</em></td>
<td><em>3.0</em></td>
<td colspan="2"><em>1.4</em></td>
<td colspan="2"><em>1.2</em></td>
<td colspan="3"><em>3.3</em></td>
</tr>
<tr class="odd">
<td><strong>Basic &amp; expanded</strong></td>
<td colspan="2"><strong>68.8</strong></td>
<td colspan="2"><strong>68.5</strong></td>
<td><strong>70.9</strong></td>
<td colspan="2"><strong>72.6</strong></td>
<td colspan="2"><strong>71.9</strong></td>
<td><strong>74.6</strong></td>
<td colspan="2"><strong>69.2</strong></td>
<td colspan="2"><strong>71.2</strong></td>
<td colspan="3"><strong>67.2</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.6</em></td>
<td colspan="2"><em>0.5</em></td>
<td><em>0.9</em></td>
<td colspan="2"><em>0.8</em></td>
<td colspan="2"><em>0.6</em></td>
<td><em>1.4</em></td>
<td colspan="2"><em>0.9</em></td>
<td colspan="2"><em>1.0</em></td>
<td colspan="3"><em>2.2</em></td>
</tr>
<tr class="odd">
<td><strong>Digital tier</strong></td>
<td colspan="2"><strong>31.3</strong></td>
<td colspan="2"><strong>31.2</strong></td>
<td><strong>32.4</strong></td>
<td colspan="2"><strong>33.5</strong></td>
<td colspan="2"><strong>33.2</strong></td>
<td><strong>34.2</strong></td>
<td colspan="2"><strong>35.2</strong></td>
<td colspan="2"><strong>27.0</strong></td>
<td colspan="3"><strong>19.4</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>1.3</em></td>
<td colspan="2"><em>1.2</em></td>
<td><em>1.9</em></td>
<td colspan="2"><em>1.9</em></td>
<td colspan="2"><em>1.9</em></td>
<td><em>2.1</em></td>
<td colspan="2"><em>1.7</em></td>
<td colspan="2"><em>2.0</em></td>
<td colspan="3"><em>2.9</em></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.9</em></td>
<td colspan="2"><em>0.8</em></td>
<td><em>1.7</em></td>
<td colspan="2"><em>1.6</em></td>
<td colspan="2"><em>1.5</em></td>
<td><em>2.0</em></td>
<td colspan="2"><em>1.3</em></td>
<td colspan="2"><em>2.3</em></td>
<td colspan="3"><em>3.0</em></td>
</tr>
<tr class="even">
<td colspan="18">Source: Survey.</td>
</tr>
</tbody>
</table>

<table style="width:100%;">
<colgroup>
<col style="width: 18%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 7%" />
<col style="width: 8%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="15"><p><strong>ATTACHMENT 4</strong></p>
<p><strong>Number of Channels,</strong></p>
<p><strong>Comparison of Sample Groups</strong></p></td>
</tr>
<tr class="even">
<td colspan="2" rowspan="3"><strong>January 1, 2005</strong></td>
<td rowspan="3"><strong>Sample Groups Overall</strong></td>
<td rowspan="3"><strong>Non-Comp. Sample</strong></td>
<td colspan="11"><p><strong>Communities With a Finding of Effective
Competition</strong></p>
<p><strong>by Primary Basis for Finding</strong></p></td>
</tr>
<tr class="odd">
<td colspan="2" rowspan="2"><strong>Sample Group Overall</strong></td>
<td colspan="6"><strong>Communities with a Second Cable
Operator</strong></td>
<td rowspan="2"><strong>DBS</strong></td>
<td rowspan="2"><strong>Wire-less</strong></td>
<td rowspan="2"><strong>LP Test</strong></td>
</tr>
<tr class="even">
<td colspan="2"><strong>Sub-group Overall</strong></td>
<td><strong>First Cable System</strong></td>
<td colspan="3"><strong>Rival Cable System</strong></td>
</tr>
<tr class="odd">
<td colspan="2"><p><strong>Basic service</strong></p>
<p><strong>Tier</strong></p></td>
<td><strong>24.9</strong></td>
<td><strong>24.9</strong></td>
<td colspan="2"><strong>24.5</strong></td>
<td colspan="2"><strong>23.8</strong></td>
<td><strong>21.2</strong></td>
<td colspan="3"><strong>30.9</strong></td>
<td><strong>26.0</strong></td>
<td><strong>23.3</strong></td>
<td><strong>24.6</strong></td>
</tr>
<tr class="even">
<td colspan="2">Previous year (2004)</td>
<td>24.5</td>
<td>24.5</td>
<td colspan="2">24.3</td>
<td colspan="2">23.7</td>
<td>21.3</td>
<td colspan="3">30.3</td>
<td>25.6</td>
<td>23.6</td>
<td>23.1</td>
</tr>
<tr class="odd">
<td colspan="2">Percentage change</td>
<td>1.6%</td>
<td>1.6%</td>
<td colspan="2">0.8%</td>
<td colspan="2">0.4%</td>
<td>-0.5%</td>
<td colspan="3">2.0%</td>
<td>1.6%</td>
<td>-1.3%</td>
<td>6.5%</td>
</tr>
<tr class="even">
<td colspan="2"><strong>Expanded basic tier</strong></td>
<td><strong>45.6</strong></td>
<td><strong>45.4</strong></td>
<td colspan="2"><strong>47.5</strong></td>
<td colspan="2"><strong>50.1</strong></td>
<td><strong>52.0</strong></td>
<td colspan="3"><strong>45.0</strong></td>
<td><strong>44.5</strong></td>
<td><strong>48.0</strong></td>
<td><strong>44.1</strong></td>
</tr>
<tr class="odd">
<td colspan="2">Previous year (2004)</td>
<td>44.3</td>
<td>44.0</td>
<td colspan="2">46.6</td>
<td colspan="2">48.9</td>
<td>50.6</td>
<td colspan="3">44.3</td>
<td>43.6</td>
<td>47.6</td>
<td>44.1</td>
</tr>
<tr class="even">
<td colspan="2">Percentage change</td>
<td>2.9%</td>
<td>3.2%</td>
<td colspan="2">1.9%</td>
<td colspan="2">2.5%</td>
<td>2.8%</td>
<td colspan="3">1.6%</td>
<td>2.1%</td>
<td>0.8%</td>
<td>0.0%</td>
</tr>
<tr class="odd">
<td colspan="2"><p><strong>Basic &amp;</strong></p>
<p><strong>expanded basic</strong></p></td>
<td><strong>70.5</strong></td>
<td><strong>70.3</strong></td>
<td colspan="2"><strong>72.0</strong></td>
<td colspan="2"><strong>73.9</strong></td>
<td><strong>73.2</strong></td>
<td colspan="3"><strong>75.9</strong></td>
<td><strong>70.5</strong></td>
<td><strong>71.3</strong></td>
<td><strong>68.7</strong></td>
</tr>
<tr class="even">
<td colspan="2">Previous year (2004)</td>
<td>68.8</td>
<td>68.5</td>
<td colspan="2">70.9</td>
<td colspan="2">72.6</td>
<td>71.8</td>
<td colspan="3">74.6</td>
<td>69.2</td>
<td>71.2</td>
<td>67.2</td>
</tr>
<tr class="odd">
<td colspan="2">10-years ago (1995)*</td>
<td>44.0</td>
<td>44.0</td>
<td colspan="2">38.0</td>
<td colspan="2">---</td>
<td>---</td>
<td colspan="3">---</td>
<td>---</td>
<td>---</td>
<td>---</td>
</tr>
<tr class="even">
<td colspan="2"><p>1-year</p>
<p>percentage change</p></td>
<td>2.5%</td>
<td>2.6%</td>
<td colspan="2">1.6%</td>
<td colspan="2">1.8%</td>
<td>1.9%</td>
<td colspan="3">1.7%</td>
<td>1.9%</td>
<td>0.1%</td>
<td>2.2%</td>
</tr>
<tr class="odd">
<td colspan="2"><p>10-year</p>
<p>cumulative change</p></td>
<td>60.2%</td>
<td>59.8%</td>
<td colspan="2">89.5%</td>
<td colspan="2">---</td>
<td>---</td>
<td colspan="3">---</td>
<td>---</td>
<td>---</td>
<td>---</td>
</tr>
<tr class="even">
<td colspan="15"><p><strong>Percentage that Noncompetitive Group is
Higher or Lower</strong></p>
<p><strong>Comparing Number of Basic-Plus-Expanded basic
Channels</strong></p></td>
</tr>
<tr class="odd">
<td>2005</td>
<td colspan="2">---</td>
<td>---</td>
<td>-2.4%</td>
<td colspan="2">5.1%</td>
<td colspan="3">4.1%</td>
<td>8.0%</td>
<td colspan="2">-0.3%</td>
<td>-1.4%</td>
<td>2.3%</td>
</tr>
<tr class="even">
<td>1995*</td>
<td colspan="2">---</td>
<td>---</td>
<td>13.6</td>
<td colspan="2">---</td>
<td colspan="3">---</td>
<td>---</td>
<td colspan="2">---</td>
<td>---</td>
<td>---</td>
</tr>
<tr class="odd">
<td colspan="15">Source: Surveys. * 1995 data unavailable by type of
competition.</td>
</tr>
</tbody>
</table>

<table style="width:100%;">
<colgroup>
<col style="width: 17%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 0%" />
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 0%" />
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 0%" />
<col style="width: 7%" />
<col style="width: 0%" />
<col style="width: 0%" />
<col style="width: 7%" />
<col style="width: 0%" />
<col style="width: 8%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="19"><p><strong>ATTACHMENT 5</strong></p>
<p><strong>Average Equipment and Installation Charges</strong></p></td>
</tr>
<tr class="even">
<td rowspan="3"><strong>January 1, 2005</strong></td>
<td rowspan="3"><strong>Sample Groups Overall</strong></td>
<td rowspan="3"><strong>Non-Comp. Sample</strong></td>
<td colspan="16"><p><strong>Communities With a Finding of Effective
Competition</strong></p>
<p><strong>by Primary Basis for Finding</strong></p></td>
</tr>
<tr class="odd">
<td rowspan="2"><strong>Sample Group Overall</strong></td>
<td colspan="9"><strong>Communities with a Second Cable
Operator</strong></td>
<td colspan="3" rowspan="2"><strong>DBS</strong></td>
<td colspan="2" rowspan="2"><strong>Wire-less</strong></td>
<td rowspan="2"><strong>LP Test</strong></td>
</tr>
<tr class="even">
<td colspan="2"><strong>Sub-group Overall</strong></td>
<td colspan="4"><strong>First Cable System</strong></td>
<td colspan="3"><strong>Rival Cable System</strong></td>
</tr>
<tr class="odd">
<td colspan="19"><strong>Monthly Equipment Charges</strong></td>
</tr>
<tr class="even">
<td><strong>Analog converter &amp; remote control</strong></td>
<td><strong>$4.39</strong></td>
<td><strong>$4.38</strong></td>
<td><strong>$4.54</strong></td>
<td><strong>$4.29</strong></td>
<td colspan="4"><strong>$4.86</strong></td>
<td colspan="3"><strong>$2.69</strong></td>
<td colspan="3"><strong>$4.43</strong></td>
<td colspan="2"><strong>$5.12</strong></td>
<td colspan="2"><strong>$5.22</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td><em>0.15</em></td>
<td><em>0.13</em></td>
<td><em>0.32</em></td>
<td><em>0.37</em></td>
<td colspan="4"><em>0.39</em></td>
<td colspan="3"><em>0.31</em></td>
<td colspan="3"><em>0.24</em></td>
<td colspan="2"><em>0.24</em></td>
<td colspan="2"><em>1.00</em></td>
</tr>
<tr class="even">
<td>Prior year (1/1/04)</td>
<td>$4.17</td>
<td>$4.16</td>
<td>$4.28</td>
<td>$4.08</td>
<td colspan="4">$4.62</td>
<td colspan="3">$2.55</td>
<td colspan="3">$4.04</td>
<td colspan="2">$4.99</td>
<td colspan="2">$4.89</td>
</tr>
<tr class="odd">
<td><strong>Digital converter &amp; remote control</strong></td>
<td><strong>$4.99</strong></td>
<td><strong>$4.98</strong></td>
<td><strong>$5.07</strong></td>
<td><strong>$5.31</strong></td>
<td colspan="4"><strong>$5.66</strong></td>
<td colspan="3"><strong>$4.32</strong></td>
<td colspan="3"><strong>$4.77</strong></td>
<td colspan="2"><strong>$5.42</strong></td>
<td colspan="2"><strong>$2.87</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.13</em></td>
<td><em>0.12</em></td>
<td><em>0.26</em></td>
<td><em>0.33</em></td>
<td colspan="4"><em>0.28</em></td>
<td colspan="3"><em>0.47</em></td>
<td colspan="3"><em>0.14</em></td>
<td colspan="2"><em>0.26</em></td>
<td colspan="2"><em>0.64</em></td>
</tr>
<tr class="odd">
<td>Prior year (1/1/04)</td>
<td>$4.81</td>
<td>$4.80</td>
<td>$4.85</td>
<td>$5.09</td>
<td colspan="4">$5.48</td>
<td colspan="3">$4.01</td>
<td colspan="3">$4.49</td>
<td colspan="2">$5.28</td>
<td colspan="2">$2.76</td>
</tr>
<tr class="even">
<td><strong>HD converter &amp; remote control</strong></td>
<td><strong>$7.08</strong></td>
<td><strong>$7.08</strong></td>
<td><strong>$7.08</strong></td>
<td><strong>$6.94</strong></td>
<td colspan="4"><strong>$7.13</strong></td>
<td colspan="3"><strong>$6.41</strong></td>
<td colspan="3"><strong>$7.38</strong></td>
<td colspan="2"><strong>$6.82</strong></td>
<td colspan="2"><strong>$7.29</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td><em>0.19</em></td>
<td><em>0.17</em></td>
<td><em>0.38</em></td>
<td><em>0.38</em></td>
<td colspan="4"><em>0.25</em></td>
<td colspan="3"><em>0.72</em></td>
<td colspan="3"><em>0.25</em></td>
<td colspan="2"><em>0.56</em></td>
<td colspan="2"><em>0.66</em></td>
</tr>
<tr class="even">
<td>Prior year (1/1/04)</td>
<td>$6.92</td>
<td>$6.92</td>
<td>$6.94</td>
<td>$6.94</td>
<td colspan="4">$7.29</td>
<td colspan="3">$5.97</td>
<td colspan="3">$7.19</td>
<td colspan="2">$6.40</td>
<td colspan="2">$7.75</td>
</tr>
<tr class="odd">
<td><strong>CableCARD</strong></td>
<td><strong>$1.09</strong></td>
<td><strong>$1.04</strong></td>
<td><strong>$1.63</strong></td>
<td><strong>$1.93</strong></td>
<td colspan="4"><strong>$1.45</strong></td>
<td colspan="3"><strong>$3.25</strong></td>
<td colspan="3"><strong>$1.61</strong></td>
<td colspan="2"><strong>$1.09</strong></td>
<td colspan="2"><strong>$1.64</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.07</em></td>
<td><em>0.07</em></td>
<td><em>0.13</em></td>
<td><em>0.18</em></td>
<td colspan="4"><em>0.09</em></td>
<td colspan="3"><em>0.41</em></td>
<td colspan="3"><em>0.04</em></td>
<td colspan="2"><em>0.20</em></td>
<td colspan="2"><em>0.08</em></td>
</tr>
<tr class="odd">
<td colspan="19"><strong>Non-Recurring Cable TV Installation
Charges</strong></td>
</tr>
<tr class="even">
<td><strong>Unwired home</strong></td>
<td><strong>$45.94</strong></td>
<td><strong>$45.98</strong></td>
<td><strong>$45.47</strong></td>
<td colspan="3"><strong>$44.55</strong></td>
<td><strong>$44.05</strong></td>
<td colspan="3"><strong>$45.94</strong></td>
<td colspan="3"><strong>$44.59</strong></td>
<td colspan="3"><strong>$49.42</strong></td>
<td colspan="2"><strong>$40.93</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td><em>0.76</em></td>
<td><em>0.64</em></td>
<td><em>1.95</em></td>
<td colspan="3"><em>2.62</em></td>
<td><em>1.58</em></td>
<td colspan="3"><em>5.53</em></td>
<td colspan="3"><em>1.15</em></td>
<td colspan="3"><em>1.76</em></td>
<td colspan="2"><em>3.96</em></td>
</tr>
<tr class="even">
<td>Prior year (1/1/04)</td>
<td>$45.34</td>
<td>$45.34</td>
<td>$45.36</td>
<td colspan="3">$44.92</td>
<td>$44.78</td>
<td colspan="3">$45.30</td>
<td colspan="3">$45.27</td>
<td colspan="3">$47.19</td>
<td colspan="2">$39.21</td>
</tr>
<tr class="odd">
<td><strong>Pre-wired home</strong></td>
<td><strong>$32.22</strong></td>
<td><strong>$32.23</strong></td>
<td><strong>$32.14</strong></td>
<td colspan="3"><strong>$30.46</strong></td>
<td><strong>$30.07</strong></td>
<td colspan="3"><strong>$31.58</strong></td>
<td colspan="3"><strong>$33.17</strong></td>
<td colspan="3"><strong>$33.37</strong></td>
<td colspan="2"><strong>$33.89</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.67</em></td>
<td><em>0.57</em></td>
<td><em>1.64</em></td>
<td colspan="3"><em>1.90</em></td>
<td><em>1.20</em></td>
<td colspan="3"><em>3.87</em></td>
<td colspan="3"><em>1.02</em></td>
<td colspan="3"><em>1.93</em></td>
<td colspan="2"><em>3.78</em></td>
</tr>
<tr class="odd">
<td>Prior year (1/1/04)</td>
<td>$31.61</td>
<td>$31.53</td>
<td>$32.38</td>
<td colspan="3">$31.30</td>
<td>$31.40</td>
<td colspan="3">$31.04</td>
<td colspan="3">$33.93</td>
<td colspan="3">$31.83</td>
<td colspan="2">$32.00</td>
</tr>
<tr class="even">
<td><strong>Service reconnection</strong></td>
<td><strong>$28.81</strong></td>
<td><strong>$28.80</strong></td>
<td><strong>$28.85</strong></td>
<td colspan="3"><strong>$24.73</strong></td>
<td><strong>$24.41</strong></td>
<td colspan="3"><strong>$25.60</strong></td>
<td colspan="3"><strong>$29.75</strong></td>
<td colspan="3"><strong>$35.53</strong></td>
<td colspan="2"><strong>$26.85</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td><em>0.62</em></td>
<td><em>0.54</em></td>
<td><em>1.44</em></td>
<td colspan="3"><em>1.57</em></td>
<td><em>1.32</em></td>
<td colspan="3"><em>2.27</em></td>
<td colspan="3"><em>0.97</em></td>
<td colspan="3"><em>1.82</em></td>
<td colspan="2"><em>2.83</em></td>
</tr>
<tr class="even">
<td>Prior year (1/1/04)</td>
<td>$28.36</td>
<td>$28.27</td>
<td>$29.25</td>
<td colspan="3">$24.98</td>
<td>$25.09</td>
<td colspan="3">$24.67</td>
<td colspan="3">$30.39</td>
<td colspan="3">$36.10</td>
<td colspan="2">$25.23</td>
</tr>
<tr class="odd">
<td><p><strong>CableCARD,</strong></p>
<p>current subscriber</p></td>
<td><strong>$18.86</strong></td>
<td><strong>$18.87</strong></td>
<td><strong>$18.71</strong></td>
<td colspan="3"><strong>$18.12</strong></td>
<td><strong>$22.45</strong></td>
<td colspan="3"><strong>$5.98</strong></td>
<td colspan="3"><strong>$19.22</strong></td>
<td colspan="3"><strong>$20.63</strong></td>
<td colspan="2"><strong>$6.33</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.84</em></td>
<td><em>0.74</em></td>
<td><em>1.85</em></td>
<td colspan="3"><em>1.66</em></td>
<td><em>1.63</em></td>
<td colspan="3"><em>1.77</em></td>
<td colspan="3"><em>1.27</em></td>
<td colspan="3"><em>3.14</em></td>
<td colspan="2"><em>2.58</em></td>
</tr>
<tr class="odd">
<td><p><strong>CableCARD,</strong></p>
<p>new subscriber</p></td>
<td><strong>$24.70</strong></td>
<td><strong>$24.68</strong></td>
<td><strong>$24.82</strong></td>
<td colspan="3"><strong>$19.60</strong></td>
<td><strong>$24.50</strong></td>
<td colspan="3"><strong>$5.89</strong></td>
<td colspan="3"><strong>$26.31</strong></td>
<td colspan="3"><strong>$34.46</strong></td>
<td colspan="2"><strong>$9.18</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>1.07</em></td>
<td><em>0.96</em></td>
<td><em>2.22</em></td>
<td colspan="3"><em>1.90</em></td>
<td><em>1.95</em></td>
<td colspan="3"><em>1.76</em></td>
<td colspan="3"><em>1.61</em></td>
<td colspan="3"><em>3.64</em></td>
<td colspan="2"><em>4.03</em></td>
</tr>
<tr class="odd">
<td colspan="19">Source: Survey.</td>
</tr>
</tbody>
</table>

<table style="width:100%;">
<colgroup>
<col style="width: 17%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 10%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 0%" />
<col style="width: 7%" />
<col style="width: 0%" />
<col style="width: 7%" />
<col style="width: 0%" />
<col style="width: 8%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="15"><p><strong>ATTACHMENT 6</strong></p>
<p><strong>Average Operating Capacity</strong></p></td>
</tr>
<tr class="even">
<td rowspan="3"><strong>January 1, 2005</strong></td>
<td rowspan="3"><strong>Sample Groups Overall</strong></td>
<td rowspan="3"><strong>Non-Comp. Sample</strong></td>
<td colspan="12"><p><strong>Communities With a Finding of Effective
Competition</strong></p>
<p><strong>by Primary Basis for Finding</strong></p></td>
</tr>
<tr class="odd">
<td rowspan="2"><strong>Sample Group Overall</strong></td>
<td colspan="6"><strong>Communities with a Second Cable
Operator</strong></td>
<td colspan="2" rowspan="2"><strong>DBS</strong></td>
<td colspan="2" rowspan="2"><strong>Wire-less</strong></td>
<td rowspan="2"><strong>LP Test</strong></td>
</tr>
<tr class="even">
<td colspan="2"><strong>Sub-group Overall</strong></td>
<td colspan="2"><strong>First Cable System</strong></td>
<td colspan="2"><strong>Rival Cable System</strong></td>
</tr>
<tr class="odd">
<td colspan="15"><strong>Cable System Operating Capacity</strong></td>
</tr>
<tr class="even">
<td><strong>Average MHz</strong></td>
<td><strong>736</strong></td>
<td><strong>734</strong></td>
<td><strong>754</strong></td>
<td><strong>756</strong></td>
<td colspan="2"><strong>757</strong></td>
<td colspan="2"><strong>756</strong></td>
<td colspan="2"><strong>751</strong></td>
<td colspan="2"><strong>758</strong></td>
<td colspan="2"><strong>729</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td><em>7.0</em></td>
<td><em>6.6</em></td>
<td><em>11.1</em></td>
<td><em>12.3</em></td>
<td colspan="2"><em>13.0</em></td>
<td colspan="2"><em>10.4</em></td>
<td colspan="2"><em>11.1</em></td>
<td colspan="2"><em>5.7</em></td>
<td colspan="2"><em>32.2</em></td>
</tr>
<tr class="even">
<td colspan="15"><strong>Percentage of Subscribers by Capacity of Cable
System Serving Their Community</strong></td>
</tr>
<tr class="odd">
<td><p><strong>System above</strong></p>
<p><strong>750 MHz</strong></p></td>
<td><strong>19%</strong></td>
<td><strong>18%</strong></td>
<td><strong>24%</strong></td>
<td><strong>23%</strong></td>
<td colspan="2"><strong>24%</strong></td>
<td colspan="2"><strong>18%</strong></td>
<td colspan="2"><strong>35%</strong></td>
<td colspan="2"><strong>7%</strong></td>
<td colspan="2"><strong>23%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.03</em></td>
<td><em>0.02</em></td>
<td><em>0.05</em></td>
<td><em>0.06</em></td>
<td colspan="2"><em>0.06</em></td>
<td colspan="2"><em>0.06</em></td>
<td colspan="2"><em>0.04</em></td>
<td colspan="2"><em>0.05</em></td>
<td colspan="2"><em>0.10</em></td>
</tr>
<tr class="odd">
<td><p><strong>System at</strong></p>
<p><strong>750 MHz</strong></p></td>
<td><strong>68%</strong></td>
<td><strong>69%</strong></td>
<td><strong>66%</strong></td>
<td><strong>68%</strong></td>
<td colspan="2"><strong>67%</strong></td>
<td colspan="2"><strong>73%</strong></td>
<td colspan="2"><strong>49%</strong></td>
<td colspan="2"><strong>93%</strong></td>
<td colspan="2"><strong>56%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.03</em></td>
<td><em>0.03</em></td>
<td><em>0.06</em></td>
<td><em>0.06</em></td>
<td colspan="2"><em>0.06</em></td>
<td colspan="2"><em>0.06</em></td>
<td colspan="2"><em>0.04</em></td>
<td colspan="2"><em>0.05</em></td>
<td colspan="2"><em>0.12</em></td>
</tr>
<tr class="odd">
<td><p><strong>System from</strong></p>
<p><strong>331 - 749 MHz</strong></p></td>
<td><strong>11%</strong></td>
<td><strong>11%</strong></td>
<td><strong>9%</strong></td>
<td><strong>9%</strong></td>
<td colspan="2"><strong>9%</strong></td>
<td colspan="2"><strong>8%</strong></td>
<td colspan="2"><strong>15%</strong></td>
<td colspan="2"><strong>0%</strong></td>
<td colspan="2"><strong>21%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.02</em></td>
<td><em>0.02</em></td>
<td><em>0.03</em></td>
<td><em>0.04</em></td>
<td colspan="2"><em>0.04</em></td>
<td colspan="2"><em>0.04</em></td>
<td colspan="2"><em>0.03</em></td>
<td colspan="2"><em>---</em></td>
<td colspan="2"><em>0.10</em></td>
</tr>
<tr class="odd">
<td><strong>Systems below 331 MHz</strong></td>
<td><strong>2%</strong></td>
<td><strong>2%</strong></td>
<td><strong>1%</strong></td>
<td><strong>0%</strong></td>
<td colspan="2"><strong>0%</strong></td>
<td colspan="2"><strong>0%</strong></td>
<td colspan="2"><strong>1%</strong></td>
<td colspan="2"><strong>0%</strong></td>
<td colspan="2"><strong>0%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>---</em></td>
<td colspan="2"><em>---</em></td>
<td colspan="2"><em>---</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>---</em></td>
<td colspan="2"><em>---</em></td>
</tr>
<tr class="odd">
<td colspan="15">Source: Survey.</td>
</tr>
</tbody>
</table>

<table>
<colgroup>
<col style="width: 21%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><p><strong>ATTACHMENT 7</strong></p>
<p><strong>Availability of Various Cable Services</strong></p></td>
</tr>
<tr class="even">
<td rowspan="3"><strong>January 1, 2005</strong></td>
<td rowspan="3"><strong>Sample Groups Overall</strong></td>
<td rowspan="3"><strong>Non-Comp. Sample</strong></td>
<td colspan="7"><p><strong>Communities With a Finding of Effective
Competition</strong></p>
<p><strong>by Primary Basis for Finding</strong></p></td>
</tr>
<tr class="odd">
<td rowspan="2"><strong>Sample Group Overall</strong></td>
<td colspan="3"><strong>Communities with a Second Cable
Operator</strong></td>
<td rowspan="2"><strong>DBS</strong></td>
<td rowspan="2"><strong>Wire-less</strong></td>
<td rowspan="2"><strong>LP Test</strong></td>
</tr>
<tr class="even">
<td><strong>Sub-group Overall</strong></td>
<td><strong>First Cable System</strong></td>
<td><strong>Rival Cable System</strong></td>
</tr>
<tr class="odd">
<td colspan="10"><strong>Availability of Service as a Percent of All
Basic Cable Subscribers</strong></td>
</tr>
<tr class="even">
<td><strong>Cable basic tier</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
</tr>
<tr class="even">
<td><strong>Expanded basic tier</strong></td>
<td><strong>96%</strong></td>
<td><strong>96%</strong></td>
<td><strong>95%</strong></td>
<td><strong>96%</strong></td>
<td><strong>100%</strong></td>
<td><strong>84%</strong></td>
<td><strong>92%</strong></td>
<td><strong>100%</strong></td>
<td><strong>94%</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.0</em></td>
<td><em>0.05</em></td>
<td><em>0.03</em></td>
<td><em>0.0</em></td>
<td><em>0.0</em></td>
</tr>
<tr class="even">
<td><p><strong>Addressable</strong></p>
<p><strong>analog converter</strong></p></td>
<td><strong>76%</strong></td>
<td><strong>78%</strong></td>
<td><strong>58%</strong></td>
<td><strong>58%</strong></td>
<td><strong>58%</strong></td>
<td><strong>61%</strong></td>
<td><strong>49%</strong></td>
<td><strong>78%</strong></td>
<td><strong>28%</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td><em>0.03</em></td>
<td><em>0.03</em></td>
<td><em>0.06</em></td>
<td><em>0.07</em></td>
<td><em>0.07</em></td>
<td><em>0.07</em></td>
<td><em>0.05</em></td>
<td><em>0.08</em></td>
<td><em>0.11</em></td>
</tr>
<tr class="even">
<td>Prior yr. (Jan. 1, 2004)</td>
<td>79%</td>
<td>81%</td>
<td>59%</td>
<td>59%</td>
<td>56%</td>
<td>61%</td>
<td>51%</td>
<td>78%</td>
<td>28%</td>
</tr>
<tr class="odd">
<td><strong>Digital programming</strong></td>
<td><strong>98%</strong></td>
<td><strong>98%</strong></td>
<td><strong>98%</strong></td>
<td><strong>95%</strong></td>
<td><strong>100%</strong></td>
<td><strong>82%</strong></td>
<td><strong>98%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.00</em></td>
<td><em>0.05</em></td>
<td><em>0.01</em></td>
<td><em>0.00</em></td>
<td><em>0.00</em></td>
</tr>
<tr class="odd">
<td><strong>Digital tier</strong></td>
<td><strong>97%</strong></td>
<td><strong>98%</strong></td>
<td><strong>96%</strong></td>
<td><strong>92%</strong></td>
<td><strong>100%</strong></td>
<td><strong>68%</strong></td>
<td><strong>98%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.02</em></td>
<td><em>0.00</em></td>
<td><em>0.06</em></td>
<td><em>0.01</em></td>
<td><em>0.00</em></td>
<td><em>0.00</em></td>
</tr>
<tr class="odd">
<td><strong>HDTV programming</strong></td>
<td><strong>89%</strong></td>
<td><strong>90%</strong></td>
<td><strong>81%</strong></td>
<td><strong>82%</strong></td>
<td><strong>91%</strong></td>
<td><strong>59%</strong></td>
<td><strong>73%</strong></td>
<td><strong>96%</strong></td>
<td><strong>44%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.02</em></td>
<td><em>0.02</em></td>
<td><em>0.04</em></td>
<td><em>0.05</em></td>
<td><em>0.04</em></td>
<td><em>0.07</em></td>
<td><em>0.04</em></td>
<td><em>0.04</em></td>
<td><em>0.12</em></td>
</tr>
<tr class="odd">
<td><strong>HDTV broadcast</strong></td>
<td><strong>78%</strong></td>
<td><strong>79%</strong></td>
<td><strong>68%</strong></td>
<td><strong>73%</strong></td>
<td><strong>78%</strong></td>
<td><strong>57%</strong></td>
<td><strong>57%</strong></td>
<td><strong>81%</strong></td>
<td><strong>39%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.02</em></td>
<td><em>0.02</em></td>
<td><em>0.06</em></td>
<td><em>0.06</em></td>
<td><em>0.06</em></td>
<td><em>0.07</em></td>
<td><em>0.04</em></td>
<td><em>0.08</em></td>
<td><em>0.12</em></td>
</tr>
<tr class="odd">
<td><strong>Sports tier</strong></td>
<td><strong>63%</strong></td>
<td><strong>63%</strong></td>
<td><strong>63%</strong></td>
<td><strong>62%</strong></td>
<td><strong>75%</strong></td>
<td><strong>27%</strong></td>
<td><strong>52%</strong></td>
<td><strong>85%</strong></td>
<td><strong>39%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.03</em></td>
<td><em>0.03</em></td>
<td><em>0.06</em></td>
<td><em>0.06</em></td>
<td><em>0.06</em></td>
<td><em>0.06</em></td>
<td><em>0.05</em></td>
<td><em>0.07</em></td>
<td><em>0.12</em></td>
</tr>
<tr class="odd">
<td><strong>CableCARD</strong></td>
<td><strong>88%</strong></td>
<td><strong>88%</strong></td>
<td><strong>85%</strong></td>
<td><strong>80%</strong></td>
<td><strong>96%</strong></td>
<td><strong>32%</strong></td>
<td><strong>87%</strong></td>
<td><strong>100%</strong></td>
<td><strong>39%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.02</em></td>
<td><em>0.02</em></td>
<td><em>0.03</em></td>
<td><em>0.04</em></td>
<td><em>0.03</em></td>
<td><em>0.06</em></td>
<td><em>0.03</em></td>
<td><em>0.00</em></td>
<td><em>0.12</em></td>
</tr>
<tr class="odd">
<td><strong>Cable Internet</strong></td>
<td><strong>96%</strong></td>
<td><strong>96%</strong></td>
<td><strong>96%</strong></td>
<td><strong>95%</strong></td>
<td><strong>98%</strong></td>
<td><strong>88%</strong></td>
<td><strong>98%</strong></td>
<td><strong>100%</strong></td>
<td><strong>61%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.02</em></td>
<td><em>0.03</em></td>
<td><em>0.02</em></td>
<td><em>0.04</em></td>
<td><em>0.01</em></td>
<td><em>0.00</em></td>
<td><em>0.12</em></td>
</tr>
<tr class="odd">
<td><strong>Cable telephony</strong></td>
<td><strong>42%</strong></td>
<td><strong>42%</strong></td>
<td><strong>41%</strong></td>
<td><strong>42%</strong></td>
<td><strong>40%</strong></td>
<td><strong>48%</strong></td>
<td><strong>25%</strong></td>
<td><strong>70%</strong></td>
<td><strong>17%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.03</em></td>
<td><em>0.02</em></td>
<td><em>0.06</em></td>
<td><em>0.07</em></td>
<td><em>0.07</em></td>
<td><em>0.07</em></td>
<td><em>0.04</em></td>
<td><em>0.09</em></td>
<td><em>0.09</em></td>
</tr>
<tr class="odd">
<td colspan="10">Source: Survey and <em>Statistical Report on Average
Rates for Basic Service, Cable Programming Service, and Equipment,</em>
20 FCC Rcd 2718 (2005); 18 FCC Rcd 13284 (2003); 17 FCC Rcd 6301 (2002);
16 FCC Rcd 4346 (2001);.</td>
</tr>
</tbody>
</table>

<table>
<colgroup>
<col style="width: 21%" />
<col style="width: 1%" />
<col style="width: 8%" />
<col style="width: 1%" />
<col style="width: 7%" />
<col style="width: 1%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="13"><p><strong>ATTACHMENT 8</strong></p>
<p><strong>Subscribers to Various Cable Services</strong></p></td>
</tr>
<tr class="even">
<td colspan="2" rowspan="3"><strong>January 1, 2005</strong></td>
<td colspan="2" rowspan="3"><strong>Sample Groups Overall</strong></td>
<td colspan="2" rowspan="3"><strong>Non-Comp. Sample</strong></td>
<td colspan="7"><p><strong>Communities With a Finding of Effective
Competition</strong></p>
<p><strong>by Primary Basis for Finding</strong></p></td>
</tr>
<tr class="odd">
<td rowspan="2"><strong>Sample Group Overall</strong></td>
<td colspan="3"><strong>Communities with a Second Cable
Operator</strong></td>
<td rowspan="2"><strong>DBS</strong></td>
<td rowspan="2"><strong>Wire-less</strong></td>
<td rowspan="2"><strong>LP Test</strong></td>
</tr>
<tr class="even">
<td><strong>Sub-group Overall</strong></td>
<td><strong>First Cable System</strong></td>
<td><strong>Rival Cable System</strong></td>
</tr>
<tr class="odd">
<td colspan="13"><strong>Subscribers as a Percent of All Basic Cable TV
Subscribers Who Have Availability to the Particular
Service</strong></td>
</tr>
<tr class="even">
<td><strong>Cable basic tier</strong></td>
<td colspan="2"><strong>100%</strong></td>
<td colspan="2"><strong>100%</strong></td>
<td colspan="2"><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>---</em></td>
<td colspan="2"><em>---</em></td>
<td colspan="2"><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
</tr>
<tr class="even">
<td><strong>Expanded basic tier</strong></td>
<td colspan="2"><strong>88%</strong></td>
<td colspan="2"><strong>88%</strong></td>
<td colspan="2"><strong>88%</strong></td>
<td><strong>90%</strong></td>
<td><strong>89%</strong></td>
<td><strong>93%</strong></td>
<td><strong>84%</strong></td>
<td><strong>91%</strong></td>
<td><strong>90%</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.00</em></td>
<td><em>0.02</em></td>
</tr>
<tr class="even">
<td><strong>Digital programming</strong></td>
<td colspan="2"><strong>38%</strong></td>
<td colspan="2"><strong>38%</strong></td>
<td colspan="2"><strong>40%</strong></td>
<td><strong>39%</strong></td>
<td><strong>41%</strong></td>
<td><strong>34%</strong></td>
<td><strong>40%</strong></td>
<td><strong>39%</strong></td>
<td><strong>54%</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.02</em></td>
<td><em>0.03</em></td>
<td><em>0.02</em></td>
<td><em>0.04</em></td>
<td><em>0.01</em></td>
<td><em>0.02</em></td>
<td><em>0.06</em></td>
</tr>
<tr class="even">
<td><strong>HDTV programming</strong></td>
<td colspan="2"><strong>4%</strong></td>
<td colspan="2"><strong>3%</strong></td>
<td colspan="2"><strong>4%</strong></td>
<td><strong>5%</strong></td>
<td><strong>5%</strong></td>
<td><strong>3%</strong></td>
<td><strong>3%</strong></td>
<td><strong>3%</strong></td>
<td><strong>2%</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
</tr>
<tr class="even">
<td><strong>Cable Internet</strong></td>
<td colspan="2"><strong>31%</strong></td>
<td colspan="2"><strong>31%</strong></td>
<td colspan="2"><strong>35%</strong></td>
<td><strong>39%</strong></td>
<td><strong>35%</strong></td>
<td><strong>52%</strong></td>
<td><strong>33%</strong></td>
<td><strong>30%</strong></td>
<td><strong>32%</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.02</em></td>
<td><em>0.02</em></td>
<td><em>0.02</em></td>
<td><em>0.03</em></td>
<td><em>0.01</em></td>
<td><em>0.02</em></td>
<td><em>0.07</em></td>
</tr>
<tr class="even">
<td><strong>Cable telephony</strong></td>
<td colspan="2"><strong>9%</strong></td>
<td colspan="2"><strong>9%</strong></td>
<td colspan="2"><strong>14%</strong></td>
<td><strong>17%</strong></td>
<td><strong>6%</strong></td>
<td><strong>46%</strong></td>
<td><strong>12%</strong></td>
<td><strong>7%</strong></td>
<td><strong>52%</strong></td>
</tr>
<tr class="odd">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.04</em></td>
<td><em>0.03</em></td>
<td><em>0.02</em></td>
<td><em>0.08</em></td>
<td><em>0.04</em></td>
<td><em>0.01</em></td>
<td><em>0.30</em></td>
</tr>
<tr class="even">
<td colspan="13"><strong>Subscribers as a Percent of All Cable TV
Subscribers</strong></td>
</tr>
<tr class="odd">
<td><strong>Cable basic tier</strong></td>
<td colspan="2"><strong>100%</strong></td>
<td colspan="2"><strong>100%</strong></td>
<td colspan="2"><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
<td><strong>100%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>---</em></td>
<td colspan="2"><em>---</em></td>
<td colspan="2"><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
<td><em>---</em></td>
</tr>
<tr class="odd">
<td><strong>Expanded basic</strong></td>
<td colspan="2"><strong>84%</strong></td>
<td colspan="2"><strong>84%</strong></td>
<td colspan="2"><strong>86%</strong></td>
<td><strong>87%</strong></td>
<td><strong>89%</strong></td>
<td><strong>81%</strong></td>
<td><strong>82%</strong></td>
<td><strong>91%</strong></td>
<td><strong>85%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td><em>0.02</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.06</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
</tr>
<tr class="odd">
<td><strong>Digital programming</strong></td>
<td colspan="2"><strong>37%</strong></td>
<td colspan="2"><strong>37%</strong></td>
<td colspan="2"><strong>39%</strong></td>
<td><strong>36%</strong></td>
<td><strong>41%</strong></td>
<td><strong>24%</strong></td>
<td><strong>40%</strong></td>
<td><strong>39%</strong></td>
<td><strong>54%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.02</em></td>
<td><em>0.03</em></td>
<td><em>0.01</em></td>
<td><em>0.02</em></td>
<td><em>0.06</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
</tr>
<tr class="odd">
<td><strong>HDTV programming</strong></td>
<td colspan="2"><strong>3%</strong></td>
<td colspan="2"><strong>3%</strong></td>
<td colspan="2"><strong>3%</strong></td>
<td><strong>4%</strong></td>
<td><strong>5%</strong></td>
<td><strong>2%</strong></td>
<td><strong>3%</strong></td>
<td><strong>3%</strong></td>
<td><strong>1%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
</tr>
<tr class="odd">
<td><strong>Cable Internet</strong></td>
<td colspan="2"><strong>30%</strong></td>
<td colspan="2"><strong>30%</strong></td>
<td colspan="2"><strong>34%</strong></td>
<td><strong>37%</strong></td>
<td><strong>34%</strong></td>
<td><strong>45%</strong></td>
<td><strong>32%</strong></td>
<td><strong>30%</strong></td>
<td><strong>20%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.02</em></td>
<td><em>0.02</em></td>
<td><em>0.01</em></td>
<td><em>0.02</em></td>
<td><em>0.06</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
</tr>
<tr class="odd">
<td><strong>Cable telephony</strong></td>
<td colspan="2"><strong>4%</strong></td>
<td colspan="2"><strong>4%</strong></td>
<td colspan="2"><strong>5%</strong></td>
<td><strong>8%</strong></td>
<td><strong>3%</strong></td>
<td><strong>22%</strong></td>
<td><strong>3%</strong></td>
<td><strong>5%</strong></td>
<td><strong>9%</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.01</em></td>
<td colspan="2"><em>0.02</em></td>
<td><em>0.02</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
<td><em>0.06</em></td>
<td><em>0.01</em></td>
<td><em>0.01</em></td>
</tr>
<tr class="odd">
<td colspan="13">Source: Survey.</td>
</tr>
</tbody>
</table>

<table>
<colgroup>
<col style="width: 21%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 7%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><p><strong>ATTACHMENT 9</strong></p>
<p><strong>Other Report Averages</strong></p></td>
</tr>
<tr class="even">
<td rowspan="3"><strong>January 1, 2005</strong></td>
<td rowspan="3"><strong>Sample Groups Overall</strong></td>
<td rowspan="3"><strong>Non-Comp. Sample</strong></td>
<td colspan="7"><p><strong>Communities With a Finding of Effective
Competition</strong></p>
<p><strong>by Primary Basis for Finding</strong></p></td>
</tr>
<tr class="odd">
<td rowspan="2"><strong>Sample Group Overall</strong></td>
<td colspan="3"><strong>Communities with a Second Cable
Operator</strong></td>
<td rowspan="2"><strong>DBS</strong></td>
<td rowspan="2"><strong>Wire-less</strong></td>
<td rowspan="2"><strong>LP Test</strong></td>
</tr>
<tr class="even">
<td><strong>Sub-group Overall</strong></td>
<td><strong>First Cable System</strong></td>
<td><strong>Rival Cable System</strong></td>
</tr>
<tr class="odd">
<td><strong>Monthly programming expense per subscriber *</strong></td>
<td><strong>$1.12</strong></td>
<td><strong>$1.10</strong></td>
<td><strong>$1.36</strong></td>
<td><strong>$1.34</strong></td>
<td><strong>$1.14</strong></td>
<td><strong>$1.88</strong></td>
<td><strong>$1.47</strong></td>
<td><strong>$1.19</strong></td>
<td><strong>$1.45</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td>0.09</td>
<td>0.08</td>
<td>0.18</td>
<td>0.16</td>
<td>0.13</td>
<td>0.24</td>
<td>0.12</td>
<td>0.31</td>
<td>0.16</td>
</tr>
<tr class="odd">
<td><strong>Local broadcast stations</strong></td>
<td><strong>12.3</strong></td>
<td><strong>12.4</strong></td>
<td><strong>11.5</strong></td>
<td><strong>11.2</strong></td>
<td><strong>11.4</strong></td>
<td><strong>10.7</strong></td>
<td><strong>11.8</strong></td>
<td><strong>11.6</strong></td>
<td><strong>11.2</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.3</em></td>
<td><em>0.3</em></td>
<td><em>0.5</em></td>
<td><em>0.6</em></td>
<td><em>0.6</em></td>
<td><em>0.6</em></td>
<td><em>0.4</em></td>
<td><em>0.5</em></td>
<td><em>0.5</em></td>
</tr>
<tr class="odd">
<td><strong>Public, educational, and governmental</strong></td>
<td><strong>2.6</strong></td>
<td><strong>2.6</strong></td>
<td><strong>2.7</strong></td>
<td><strong>3.0</strong></td>
<td><strong>3.1</strong></td>
<td><strong>2.7</strong></td>
<td><strong>2.8</strong></td>
<td><strong>2.0</strong></td>
<td><strong>3.4</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.1</em></td>
<td><em>0.1</em></td>
<td><em>0.3</em></td>
<td><em>0.3</em></td>
<td><em>0.4</em></td>
<td><em>0.2</em></td>
<td><em>0.2</em></td>
<td><em>0.3</em></td>
<td><em>0.5</em></td>
</tr>
<tr class="odd">
<td><strong>Local commercial leased access</strong></td>
<td><strong>0.7</strong></td>
<td><strong>0.7</strong></td>
<td><strong>0.6</strong></td>
<td><strong>0.7</strong></td>
<td><strong>0.7</strong></td>
<td><strong>0.5</strong></td>
<td><strong>0.4</strong></td>
<td><strong>0.9</strong></td>
<td><strong>0.3</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.1</em></td>
<td><em>0.1</em></td>
<td><em>0.1</em></td>
<td><em>0.1</em></td>
<td><em>0.1</em></td>
<td><em>0.1</em></td>
<td><em>0.1</em></td>
<td><em>0.1</em></td>
<td><em>0.1</em></td>
</tr>
<tr class="odd">
<td><strong>Other analog channels **</strong></td>
<td><strong>3.3</strong></td>
<td><strong>3.3</strong></td>
<td><strong>3.3</strong></td>
<td><strong>2.1</strong></td>
<td><strong>2.2</strong></td>
<td><strong>1.8</strong></td>
<td><strong>4.0</strong></td>
<td><strong>4.0</strong></td>
<td><strong>5.8</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.4</em></td>
<td><em>0.4</em></td>
<td><em>0.8</em></td>
<td><em>0.7</em></td>
<td><em>0.7</em></td>
<td><em>0.6</em></td>
<td><em>0.6</em></td>
<td><em>1.1</em></td>
<td><em>1.7</em></td>
</tr>
<tr class="odd">
<td><strong>High definition **</strong></td>
<td><strong>11.6</strong></td>
<td><strong>11.5</strong></td>
<td><strong>11.6</strong></td>
<td><strong>12.1</strong></td>
<td><strong>12.2</strong></td>
<td><strong>11.9</strong></td>
<td><strong>11.2</strong></td>
<td><strong>11.6</strong></td>
<td><strong>9.7</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>0.3</em></td>
<td><em>0.3</em></td>
<td><em>0.5</em></td>
<td><em>0.5</em></td>
<td><em>0.4</em></td>
<td><em>0.7</em></td>
<td><em>0.4</em></td>
<td><em>0.7</em></td>
<td><em>0.9</em></td>
</tr>
<tr class="odd">
<td><p><strong>Other digital</strong></p>
<p><strong>channels **</strong></p></td>
<td><strong>108.1</strong></td>
<td><strong>107.6</strong></td>
<td><strong>113.8</strong></td>
<td><strong>120.0</strong></td>
<td><strong>126.1</strong></td>
<td><strong>102.9</strong></td>
<td><strong>113.4</strong></td>
<td><strong>104.5</strong></td>
<td><strong>100.6</strong></td>
</tr>
<tr class="even">
<td><em>Standard error</em></td>
<td><em>4.4</em></td>
<td><em>4.1</em></td>
<td><em>7.1</em></td>
<td><em>7.5</em></td>
<td><em>7.3</em></td>
<td><em>8.1</em></td>
<td><em>4.8</em></td>
<td><em>9.7</em></td>
<td><em>12.4</em></td>
</tr>
<tr class="odd">
<td colspan="10"><p>* Equals the difference in the monthly programming
expense per subscriber for the basic-plus-expanded basic tiers,
comparing year 2003 to year 2004. Monthly programming expense per
subscriber for each year was approximated by dividing programming cost
by end-of-year basic tier subscribers, dividing by 12 months.</p>
<p>** Includes premium, pay-per-view, mini-tiers, and other video
channels. High definition channels also include local broadcast
simulcasts and multicasts. Does not include channels counted in
Attachment 3 that are part of the basic tier, expanded basic tier, or
most-highly subscribed digital tier.</p>
<p>Source: Survey. Note: Results in this table are 5-pecent trended
means calculated by removing the lowest and highest 5 percent of sample
observation values.</p></td>
</tr>
</tbody>
</table>

+----------------------+--------+--------+--------+--------+-------+
| **ATTACHMENT 10**    |        |        |        |        |       |
|                      |        |        |        |        |       |
| **Averages for       |        |        |        |        |       |
| 1995-2005**          |        |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
| **Date**             | *      |        |        |        | **S   |
|                      | *Basic |        |        |        | ystem |
|                      | and    |        |        |        | Oper  |
|                      | Ex     |        |        |        | ating |
|                      | panded |        |        |        | Cap   |
|                      | Basic  |        |        |        | acity |
|                      | Progr  |        |        |        | (M    |
|                      | amming |        |        |        | Hz)** |
|                      | Ser    |        |        |        |       |
|                      | vice** |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
|                      | *      | *      | *      | **Chan |       |
|                      | *Price | *Price | *Total | nels** |       |
|                      | of     | of     | P      |        |       |
|                      | Basic  | Ex     | rice** |        |       |
|                      | Tier** | panded |        |        |       |
|                      |        | Basic  |        |        |       |
|                      |        | Tier** |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1995            | \-\--  | \-\--  | \      | 44.0   | \-\-- |
|                      |        |        | $22.35 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1996            | \-\--  | \-\--  | \      | 47.0   | \-\-- |
|                      |        |        | $24.28 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1997            | \-\--  | \-\--  | \      | 49.4   | \-\-- |
|                      |        |        | $26.31 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1998            | \      | \      | \      | 50.1   | \-\-- |
|                      | $12.06 | $15.82 | $27.88 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1999            | \      | \      | \      | 51.1   | 534   |
|                      | $12.58 | $16.36 | $28.94 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 2000            | \      | \      | \      | 54.8   | 623   |
|                      | $12.84 | $18.38 | $31.22 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 2001            | \      | \      | \      | 59.4   | 652   |
|                      | $12.84 | $20.91 | $33.75 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 2002            | \      | \      | \      | 62.7   | 694   |
|                      | $14.45 | $22.02 | $36.47 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| January 2003         | \      | \      | \      | 67.5   | \-\-- |
|                      | $13.45 | $25.50 | $38.95 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| January 2004         | \      | \      | \      | 70.3   | 734   |
|                      | $13.80 | $27.24 | $41.04 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| January 2005         | \      | \      | \      | 70.5   | 736   |
|                      | $14.30 | $28.74 | $43.04 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| 10-year-percent      | \-\--  | \-\--  | 92.6%  | 60.2%  | \-\-- |
| change, 1995-2005    |        |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
| Sources and notes:   |        |        |        |        |       |
| Years 1995-2004 are  |        |        |        |        |       |
| from previous Survey |        |        |        |        |       |
| Reports including    |        |        |        |        |       |
| *Statistical Report  |        |        |        |        |       |
| on Average Rates for |        |        |        |        |       |
| Basic Service, Cable |        |        |        |        |       |
| Programming Service, |        |        |        |        |       |
| and Equipment,* 12   |        |        |        |        |       |
| FCC Rcd 3239 (1997)  |        |        |        |        |       |
| *("1997 Survey"*);   |        |        |        |        |       |
| 14 FCC Rcd 8331      |        |        |        |        |       |
| (1999) *("1998       |        |        |        |        |       |
| Survey"*); 15 FCC    |        |        |        |        |       |
| Rcd 10927 (2000)     |        |        |        |        |       |
| *("1999 Survey"*);   |        |        |        |        |       |
| 16 FCC Rcd 4346      |        |        |        |        |       |
| (2001) *("2000       |        |        |        |        |       |
| Survey"*); 17 FCC    |        |        |        |        |       |
| Rcd 6301 (2002)      |        |        |        |        |       |
| *("2001 Survey"*);   |        |        |        |        |       |
| 18 FCC Rcd 13284     |        |        |        |        |       |
| (2003) *("2002       |        |        |        |        |       |
| Survey"*); and 20    |        |        |        |        |       |
| FCC Rcd 2718 (2005)  |        |        |        |        |       |
| *("2004 Survey"*).   |        |        |        |        |       |
| Year 2005 is from    |        |        |        |        |       |
| this Survey. Some    |        |        |        |        |       |
| data points have     |        |        |        |        |       |
| been revised from    |        |        |        |        |       |
| the historical       |        |        |        |        |       |
| series reported in   |        |        |        |        |       |
| the *2004 Survey* to |        |        |        |        |       |
| reflect the first    |        |        |        |        |       |
| survey in which data |        |        |        |        |       |
| for that year were   |        |        |        |        |       |
| published.           |        |        |        |        |       |
|                      |        |        |        |        |       |
| Missing data in this |        |        |        |        |       |
| table indicates we   |        |        |        |        |       |
| did not survey those |        |        |        |        |       |
| metrics in that      |        |        |        |        |       |
| year.                |        |        |        |        |       |
| Ten-year-percent     |        |        |        |        |       |
| change is            |        |        |        |        |       |
| unavailable for the  |        |        |        |        |       |
| basic tier, expanded |        |        |        |        |       |
| basic tier, and MHz  |        |        |        |        |       |
| capacity because we  |        |        |        |        |       |
| did not survey those |        |        |        |        |       |
| metrics in 1995.     |        |        |        |        |       |
| Prices and channels  |        |        |        |        |       |
| from 1995-2000 and   |        |        |        |        |       |
| capacity from        |        |        |        |        |       |
| 2000-2001 are        |        |        |        |        |       |
| represented by the   |        |        |        |        |       |
| averages for         |        |        |        |        |       |
| noncompetitive       |        |        |        |        |       |
| communities in       |        |        |        |        |       |
| Attachment 11,       |        |        |        |        |       |
| because composite    |        |        |        |        |       |
| subscriber-weighted  |        |        |        |        |       |
| averages of          |        |        |        |        |       |
| noncompetitive       |        |        |        |        |       |
| communities and      |        |        |        |        |       |
| effective            |        |        |        |        |       |
| competition          |        |        |        |        |       |
| communities were not |        |        |        |        |       |
| included in those    |        |        |        |        |       |
| survey reports. All  |        |        |        |        |       |
| other numbers in     |        |        |        |        |       |
| this table are       |        |        |        |        |       |
| composite            |        |        |        |        |       |
| subscriber-weighted  |        |        |        |        |       |
| averages. There is   |        |        |        |        |       |
| only a slight        |        |        |        |        |       |
| difference in the    |        |        |        |        |       |
| average of all       |        |        |        |        |       |
| communities and the  |        |        |        |        |       |
| average for the      |        |        |        |        |       |
| noncompetitive       |        |        |        |        |       |
| group. This is       |        |        |        |        |       |
| because the group of |        |        |        |        |       |
| cable operators that |        |        |        |        |       |
| have received a      |        |        |        |        |       |
| specific Commission  |        |        |        |        |       |
| "effective           |        |        |        |        |       |
| competition" finding |        |        |        |        |       |
| represents a         |        |        |        |        |       |
| relatively small     |        |        |        |        |       |
| group of cable       |        |        |        |        |       |
| subscribers, and     |        |        |        |        |       |
| thus there is only a |        |        |        |        |       |
| slight effect from   |        |        |        |        |       |
| this group on the    |        |        |        |        |       |
| overall average.     |        |        |        |        |       |
|                      |        |        |        |        |       |
| **1995-1997:** *1997 |        |        |        |        |       |
| Survey*. For 1995,   |        |        |        |        |       |
| only a combined      |        |        |        |        |       |
| programming plus     |        |        |        |        |       |
| equipment price was  |        |        |        |        |       |
| reported. The 1995   |        |        |        |        |       |
| price in this table  |        |        |        |        |       |
| was calculated by    |        |        |        |        |       |
| subtracting an       |        |        |        |        |       |
| estimate of          |        |        |        |        |       |
| equipment price.     |        |        |        |        |       |
|                      |        |        |        |        |       |
| **1998:** *1998      |        |        |        |        |       |
| Survey*.             |        |        |        |        |       |
|                      |        |        |        |        |       |
| **1999:** Prices     |        |        |        |        |       |
| were reported in     |        |        |        |        |       |
| *1999 Survey*, and   |        |        |        |        |       |
| capacity was         |        |        |        |        |       |
| reported in *2004    |        |        |        |        |       |
| Survey* based on     |        |        |        |        |       |
| data collected for   |        |        |        |        |       |
| *1999 Survey*.       |        |        |        |        |       |
|                      |        |        |        |        |       |
| **2000:** *2000      |        |        |        |        |       |
| Survey*.             |        |        |        |        |       |
|                      |        |        |        |        |       |
| **2001:** *2001      |        |        |        |        |       |
| Survey*.             |        |        |        |        |       |
|                      |        |        |        |        |       |
| **2002:** *2002      |        |        |        |        |       |
| Survey*. For 2002,   |        |        |        |        |       |
| price in the column  |        |        |        |        |       |
| labeled "Basic Tier" |        |        |        |        |       |
| is out of trend. As  |        |        |        |        |       |
| another estimate,    |        |        |        |        |       |
| the *2004 Survey*    |        |        |        |        |       |
| reports that, in     |        |        |        |        |       |
| January 2002, the    |        |        |        |        |       |
| basic tier price is  |        |        |        |        |       |
| \$13.11 and the      |        |        |        |        |       |
| expanded basic tier  |        |        |        |        |       |
| price is \$23.01     |        |        |        |        |       |
| (for a total of      |        |        |        |        |       |
| \$36.12). These      |        |        |        |        |       |
| January 2002         |        |        |        |        |       |
| estimates are the    |        |        |        |        |       |
| composite            |        |        |        |        |       |
| subscriber-weighted  |        |        |        |        |       |
| averages for         |        |        |        |        |       |
| noncompetitive       |        |        |        |        |       |
| communities (basic   |        |        |        |        |       |
| tier price is        |        |        |        |        |       |
| \$13.06 and expanded |        |        |        |        |       |
| basic tier price is  |        |        |        |        |       |
| \$23.15 for a total  |        |        |        |        |       |
| of \$36.21), and     |        |        |        |        |       |
| effective            |        |        |        |        |       |
| competition          |        |        |        |        |       |
| communities (basic   |        |        |        |        |       |
| tier price is        |        |        |        |        |       |
| \$13.70 and the      |        |        |        |        |       |
| expanded basic tier  |        |        |        |        |       |
| price is \$21.36 for |        |        |        |        |       |
| a total of \$35.06). |        |        |        |        |       |
|                      |        |        |        |        |       |
| **2003-2004:** *2004 |        |        |        |        |       |
| Survey*. Capacity    |        |        |        |        |       |
| was not surveyed for |        |        |        |        |       |
| 2003. Averages for   |        |        |        |        |       |
| 2004 in this         |        |        |        |        |       |
| Attachment are based |        |        |        |        |       |
| on the *2004         |        |        |        |        |       |
| Survey*, and         |        |        |        |        |       |
| therefore, do not    |        |        |        |        |       |
| match the 2004       |        |        |        |        |       |
| averages in Table 1  |        |        |        |        |       |
| of this Survey,      |        |        |        |        |       |
| since those averages |        |        |        |        |       |
| are based on the     |        |        |        |        |       |
| *2005 Survey*. In    |        |        |        |        |       |
| the *2005 Survey*,   |        |        |        |        |       |
| prices were          |        |        |        |        |       |
| collected for 2004   |        |        |        |        |       |
| and 2005 in order to |        |        |        |        |       |
| measure percentage   |        |        |        |        |       |
| changes across a     |        |        |        |        |       |
| consistent set of    |        |        |        |        |       |
| communities. Data    |        |        |        |        |       |
| collected for the    |        |        |        |        |       |
| same year for two    |        |        |        |        |       |
| different surveys    |        |        |        |        |       |
| are likely to vary   |        |        |        |        |       |
| slightly because     |        |        |        |        |       |
| each sample includes |        |        |        |        |       |
| a different set of   |        |        |        |        |       |
| communities. The     |        |        |        |        |       |
| variability inherent |        |        |        |        |       |
| in samples is        |        |        |        |        |       |
| discussed in         |        |        |        |        |       |
| Appendix A.          |        |        |        |        |       |
|                      |        |        |        |        |       |
| **2005:** This       |        |        |        |        |       |
| Survey.              |        |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+

+----------------------+--------+--------+--------+--------+-------+
| **ATTACHMENT 11**    |        |        |        |        |       |
|                      |        |        |        |        |       |
| **Averages for       |        |        |        |        |       |
| 1995-2005,**         |        |        |        |        |       |
|                      |        |        |        |        |       |
| **By Sample Group**  |        |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
| **Date**             | *      |        |        |        | **S   |
|                      | *Basic |        |        |        | ystem |
|                      | and    |        |        |        | Oper  |
|                      | Ex     |        |        |        | ating |
|                      | panded |        |        |        | Cap   |
|                      | Basic  |        |        |        | acity |
|                      | Progr  |        |        |        | (M    |
|                      | amming |        |        |        | Hz)** |
|                      | Ser    |        |        |        |       |
|                      | vice** |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
|                      | *      | *      | *      | **Chan |       |
|                      | *Price | *Price | *Total | nels** |       |
|                      | of     | of     | P      |        |       |
|                      | Basic  | Ex     | rice** |        |       |
|                      | Tier** | panded |        |        |       |
|                      |        | Basic  |        |        |       |
|                      |        | Tier** |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
| **Noncompetitive     |        |        |        |        |       |
| Communities**        |        |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1995            | \-\--  | \-\--  | \      | 44.0   | \-\-- |
|                      |        |        | $22.35 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1996            | \-\--  | \-\--  | \      | 47.0   | \-\-- |
|                      |        |        | $24.28 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1997            | \-\--  | \-\--  | \      | 49.4   | \-\-- |
|                      |        |        | $26.31 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1998            | \      | \      | \      | 50.1   | \-\-- |
|                      | $12.06 | $15.82 | $27.88 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1999            | \      | \      | \      | 51.1   | 532   |
|                      | $12.58 | $16.36 | $28.94 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 2000            | \      | \      | \      | 54.8   | 623   |
|                      | $12.84 | $18.38 | $31.22 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 2001            | \      | \      | \      | 59.3   | 652   |
|                      | $12.87 | $21.02 | $33.89 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 2002            | \      | \      | \      | 62.7   | 696   |
|                      | $14.47 | $22.14 | $36.61 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| January 2003         | \      | \      | \      | 67.3   | \-\-- |
|                      | $13.38 | $25.73 | $39.11 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| January 2004         | \      | \      | \      | 70.1   | 734   |
|                      | $13.73 | $27.56 | $41.29 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| January 2005         | \      | \      | \      | 70.3   | 734   |
|                      | $14.25 | $29.08 | $43.33 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| 10-year-percent      | \-\--  | \-\--  | 93.9%  | 59.8%  | \-\-- |
| change, 1995-2005    |        |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
| **Communities with a |        |        |        |        |       |
| Finding of Effective |        |        |        |        |       |
| Competition**        |        |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1995            | \-\--  | \-\--  | \      | 38.0   | \-\-- |
|                      |        |        | $21.64 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1996            | \-\--  | \-\--  | \      | 39.6   | \-\-- |
|                      |        |        | $23.32 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1997            | \-\--  | \-\--  | \      | 46.5   | \-\-- |
|                      |        |        | $25.29 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1998            | \      | \      | \      | 54.0   | \-\-- |
|                      | $11.12 | $15.00 | $26.12 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 1999            | \      | \      | \      | 52.3   | 619   |
|                      | $12.03 | $15.27 | $27.30 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 2000            | \      | \      | \      | 59.9   | 630   |
|                      | $12.03 | $17.41 | $29.44 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 2001            | \      | \      | \      | 60.9   | 666   |
|                      | $12.43 | $19.23 | $31.66 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| July 2002            | \      | \      | \      | 62.9   | 677   |
|                      | $14.09 | $20.25 | $34.34 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| January 2003         | \      | \      | \      | 69.7   | \-\-- |
|                      | $14.25 | $22.61 | $36.86 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| January 2004         | \      | \      | \      | 72.5   | 734   |
|                      | $14.58 | $23.59 | $38.17 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| January 2005         | \      | \      | \      | 72.0   | 754   |
|                      | $14.80 | $25.35 | $40.15 |        |       |
+----------------------+--------+--------+--------+--------+-------+
| 10-year-percent      | \-\--  | \-\--  | 85.5%  | 89.5%  | \-\-- |
| change, 1995-2005    |        |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+
| Sources and notes:   |        |        |        |        |       |
| *See* Attachment 10. |        |        |        |        |       |
+----------------------+--------+--------+--------+--------+-------+

#  {#section-1 .unnumbered}

# AppendIx A {#appendix-a .unnumbered}

# Survey Methodology {#survey-methodology .unnumbered}

## Sampling Procedure

1.  Our sample was drawn from the list of community-unit identifiers the
    Commission assigns to each cable operator for each community that a
    cable operator serves.[^23] Prior to drawing our sample, we divided
    this list into noncompetitive communities and communities relieved
    from rate regulation, depending on whether the Commission had made a
    finding of effective competition in that community as of January
    1, 2005. Moreover, we assigned each noncompetitive community to one
    of three subgroups \-- large, medium, or small \-- depending on the
    number of subscribers served by the cable system. Each community
    relieved from rate regulation was also assigned to a subgroup --
    communities with a second cable operator, DBS, wireless overbuild,
    or low penetration \-- depending on the primary basis for the
    finding of effective competition. Communities with a second cable
    operator were further divided into incumbent cable operators and the
    rival second cable operator. Attachment 1 of this Report provides
    additional information on these sample groups and subgroups.

```{=html}
<!-- -->
```
34. To determine the number of communities needed in our sample in order
    to achieve statistical precision, we applied a statistical
    formula.[^24] Based on this formula, the sample size equaled 497 of
    the 31,655 communities in the noncompetitive group and 284 of the
    1,275 communities relieved from rate regulation.[^25] We divided the
    number of observations to be selected from each group into
    subgroups,[^26] based on our estimate of each subgroup's percentage
    share of cable subscribers. Adjustments were made, however, to
    ensure that a sufficient number of sample observations were
    allocated to each subgroup, considering expected price variances
    within the subgroups. Sample selections were drawn at random from
    each subgroup, with each community having a known probability of
    selection. The probability of selection for any one community
    depended upon our estimate of its number of cable subscribers
    relative to the total number of cable subscribers in the subgroup.
    This method of selection was chosen so that the sample would be more
    representative of a typical subscriber on a nationwide basis. For
    each subgroup of communities with a finding of effective
    competition, we selected no more than one community per county from
    any particular cable operator.

35. After drawing the sample, we asked cable operators to complete a
    questionnaire for each of their communities selected for the sample.
    The questionnaire requested data as of January 1, 2005, and more
    limited amounts of data as of January 1, 2004. Cable operators in
    the noncompetitive sample group completed 484 of 497 questionnaires,
    representing a 97% response rate. The "large" subgroup (comprised of
    communities receiving service from a cable headend facility serving
    more than 10,000 subscribers) completed 397 of 398 questionnaires;
    the "medium" subgroup (1,001-10,000 subscribers) completed 48 of 52
    questionnaires; and the "small" subgroup (1,000 or less subscribers)
    completed 39 of 47 questionnaires. Cable operators in the
    communities relieved from rate regulation completed 280 of 284
    questionnaires, representing a 99% response rate. Operators in
    communities with a second cable operator completed 111 of 112
    questionnaires; the DBS subgroup completed 124 of 125
    questionnaires; the wireless overbuild subgroup completed 27 of 27
    questionnaires; and the low penetration subgroup completed 18 of 20
    questionnaires.

36. We reviewed the questionnaires for completeness and accuracy. When a
    response to a question was incomplete or appeared to be incorrect,
    we asked the responding cable operator to check its answer and
    revise the response if necessary. After this review process, we
    calculated the statistical averages for responses to each question.
    These averages were calculated at the subgroup level, then at the
    group level as a subscriber-weighted average of subgroups, and
    finally overall as a subscriber-weighted average of the
    noncompetitive communities and communities relieved from rate
    regulation combined. In this manner, the effect from a subgroup's
    average on its group average, as well as on the overall average,
    increased in direct proportion to its weight. The weights, which are
    equal to our estimate of each subgroup's percentage share of cable
    subscribers nationwide, are shown in Attachment 1.[^27]

## Sampling Accuracy

37. Because our Survey is based on a sample of communities rather than a
    100% census, the price averages in this Report are subject to
    sampling variance. Sample results are likely to be different from
    results that would be obtained if we were able to collect prices
    from all communities nationwide. If it were possible to survey all
    cable communities we might increase the accuracy of this 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. The Attachments report estimates of
    potential sampling variance or "standard error" for each price
    average calculated as of January 1, 2005. Standard errors can be
    used 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").[^28] Standard errors can also be used
    to identify whether differences in prices, either over time or
    between noncompetitive communities and communities relieved from
    rate regulation, are statistically significant at a 95 percent
    confidence level.

38. In addition to variance inherent in the process of sampling,
    variances between sample results and true price averages may occur
    for reasons involving errors in (a) survey design*;* (b) survey
    responses; and (c) data collection and processing. One limit on our
    survey design involved the community count of subscribers used to
    develop subscriber-weights to compute weighted averages. As in
    previous surveys, we estimated the number of subscribers in each
    community by using the data reported on FCC Form 325 as of 1994,
    supplemented by current subscriber information whenever possible.
    These 1994 data are the most recent census of cable subscribers at
    the community level, and for this reason our weights did not reflect
    post-1994 growth in cable subscribers. Nevertheless, because it is
    likely that percentage growth across communities has tended to be
    evenly distributed, our weights serve as a reasonable, although
    imperfect, approximation of current weights. To limit survey error,
    we continued to apply quality control measures to enhance the
    accuracy of survey responses. 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.

    **APPENDIX B**

# Econometric Analysis {#econometric-analysis-1 .unnumbered}

1.  In this report, we return to econometric analysis in order to
    provide a more sophisticated examination of the data collected.[^29]
    The model we describe below was designed to examine the effects of
    market structure as well as demand and cost factors on cable prices.
    The estimation of the relationship between market concentration and
    measures of firm performance was pioneered by Collins and Peterson
    in their 1969 study of the effects of concentration on profits in
    417 industries.[^30] Later, Weiss used a slightly different model
    specification to estimate the effects of concentration on
    profitability.[^31] Since the publication of these two seminal
    articles, regressions of profit/price on concentration have become a
    frequently used empirical tool in industrial organization
    literature.[^32]

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39. The model is based on the textbook paradigm of
    "structure-conduct-performance," i.e., performance is affected by
    conduct (of buyers and sellers), which in turn is affected by
    structure (of the relevant market).[^33] A majority of the studies
    have used market concentration as a measure of structure, and price
    or profit as a measure of performance. In this study, we use the
    same regression techniques that have been used previously and apply
    them to the MVPD industry to estimate the effects of a cable
    operator's share of the local market (a measure of market structure)
    on the price of cable service (a measure of performance).

## Model Specification

40. Following the approach taken in previous empirical studies, we
    specify the following log linear relationship between cable prices
    and market concentration along with other explanatory variables:

    Log Price~i~ = b~o~ + b~1~ Log Market Share~i~ + b~2~ Log
    Income~i~ + b~3~ Log National Subscribers~i~ + b~4~ Log
    Capacity~i~ + b~5~ Log Density~i~ + b~6~ Vertical Dummy~i~ + b~7~
    Effective Competition~i~ + b~8~ Local-into-Local~i~ + e~i,.~

    Where

    Log Price~i~ = log of cable price at i^th^ cable community,

    Log Market Size~i~ = log of cable's share of the MVPD market in
    system area,

    Log Income~i~ = log of median family income,

    Log National Subscriber~i~ = log of number of parent company
    subscribers of cable operator,

    Log Capacity~i~ = log of cable plant's capacity in MHz,

    Log Density~i~ = log of population density in the community served,

    Vertical Dummy~i~ = vertical dummy (0,1 indicating presence or
    absence of vertical affiliation with one or more programming
    networks),

    Effective Competition Dummy~i~ = effective competition dummy (0,1
    indicating whether a petition requesting a finding of effective
    competition in the community has been granted),

    Local-into-Local~i~ = local-into-local dummy (0,1 indicating
    availability or non-availability of local programming in DBS
    operators' program offerings in the community served), and

    e~i~ = error term.

41. The above equation includes variables representing market structure
    as well as demand and cost factors. Certain variables can influence
    both demand and cost. For example, median family income can be
    considered both a demand and a cost factor. High income is generally
    associated with increased ability to pay for cable services (thus
    influencing demand), but may also mean that higher labor cost
    prevails in the area, thus contributing to higher cable prices.

42. Cable plant capacity measured in megahertz is another variable that
    represents a combination of cost and demand factors. Higher
    megahertz may enable a cable operator to provide more channels and a
    variety of services including Internet access and telephony, which
    may lead to higher demand, which in turn may lead to higher cable
    prices. But upgrading the cable plant to provide increased capacity
    in megahertz also requires investment capital and so represents a
    cost factor. In the past, cable operators have upgraded their plant
    to meet competition from other MVPD operators, particularly DBS, as
    well as to be able to provide advanced services.

43. Similarly, population density can represent both a cost and a demand
    factor. A more densely populated area may suggest higher demand for
    cable services and therefore higher cable prices. It is possible,
    however, that a densely populated area may be part of a large city,
    which may have competing forms of entertainment available to
    consumers, which in turn may lead to lower demand for cable. Higher
    density, however, can also mean lower construction costs per home
    passed, which may lower the cost of providing cable services. The
    "local-into-local" dummy variable indicates the presence of more
    intense local competition from DBS in the MVPD market and thus may
    be associated with lower cable prices in the area. The effective
    competition dummy variable indicates that the cable operator has
    been freed from basic rate regulation and may face competition from
    additional MVPDs.

44. The "vertical affiliation" dummy variable, the "market share"
    variable, and the "number of nationwide subscribers" variable are
    three variables that represent market structure in the equation. If
    a vertically integrated cable operator enjoys cost savings or
    increased efficiencies due to the ownership of or affiliation with
    one or more programming networks, then the prices charged by the
    affiliated cable operator may be lower if some of the benefits are
    passed on to consumers. Vertically integrated operators may wield
    market power in the sale of programming, and may be able to deny
    carriage of "must-have" affiliated programming to competing MVPD
    operators. This may lead to higher cable prices.[^34]

45. A positive relationship between market share and prices is expected
    where a dominant firm is able to exploit its dominant position and
    charge higher prices than its competitors. Higher prices as a result
    of unilateral action by the dominant firm may in many instances lead
    to a loss of consumer welfare. However, a positive relationship
    between market share and prices can also result if the markets in
    which firms have larger market shares tend to be markets with higher
    costs. In these circumstances, market share may not be a good
    indicator of market power and higher prices may not represent a loss
    of consumer welfare.[^35]

46. The variable indicating the number of nationwide subscribers
    indicates the overall size of the parent company of the cable
    operator. If large cable operators have a cost advantage over
    smaller operators, then prices should be lower in areas served by a
    cable operator that has a large number of subscribers nationwide.

47. Although the above equation provides a useful analysis of the
    effects of market structure and other demand and cost variables on
    prices, it may suffer from endogeneity due to omitted relevant
    variables.[^36] Failure to include variables relevant to determining
    the price of cable service can bias the estimated impact of any
    included variables, such as market share, that are correlated with
    the omitted variables. As previously discussed, the failure to
    properly observe the quality of the product can lead to erroneous
    conclusions regarding the market share variable. In addition, over
    time, markets that exhibit higher prices may attract increased
    investment, increased research and development, and the entry of new
    competitors, thus affecting market shares. One consequence of the
    endogeneity of market shares is that the use of the ordinary least
    squares (OLS) technique to estimate the equation will lead to biased
    conclusions because of the correlation between the market share
    variable and the error term, which would violate one of the basic
    assumptions of OLS.[^37]

48. To correct for the endogeneity of market share, we use the
    instrumental variable (IV) technique to estimate the equation. The
    instrumental variable method purges the link between explanatory
    variables and the error term by using appropriate exogenous
    variables as instruments. The selected instruments must be strongly
    correlated with the endogenous variable and must not be correlated
    with the omitted variables, whose effects are incorporated into the
    error term. We use nine variables related to market size and the
    cost of entry into the market as instruments for market share since
    these factors may affect market share but are not necessarily
    related to the omitted factors. Specifically, we use the following
    variables as instruments: number of households, location of
    franchise area in terms of latitude, age of the cable system,
    percent of Spanish speaking people in the population, percent of
    multiple dwelling units in the franchise area, percent of households
    without telephone service, percent of households with children under
    18 years of age, presence or absence of a second cable operator in
    the franchise area, and whether or not the cable operator is
    regulated.

49. We use the natural log of the variables to estimate the equation.
    Although other functional forms may be equally suited for the
    estimation of this equation, we choose the log linear form so that
    the estimated coefficients can be interpreted as elasticities.
    Cable's market share, national subscriber size, capacity in
    megahertz, number of households, regulation, the presence of a
    second cable operator, and local-into-local variables are from the
    Survey. The vertical integration dummy is based on information
    provided in the 2004 Competition Report and the age of the cable
    system is derived from cable system registration information
    reported by cable operators.[^38] All other variables are from the
    Census Bureau.[^39]

## Results

50. The Table shown below reports the estimated regression coefficients
    obtained by using the IV technique.[^40]

  ---------------------------- --------------------- ---------------------
  **IV Regression Estimation**                       

  **Dependent Variable (Log    **Estimate of         **t-Statistic**
  Price)**                     Coefficient**         

  Log Income                   0.030                 1.07

  Log National Subscribers     0.025\*               5.96

  Log Capacity                 0.099\*               2.69

  Log Density                  0.026\*               4.65

  Effective Competition Dummy  -0.042\*              4.65

  Local-into-Local             0.031                 0.70

  Log Market Share             0.112\*               2.88

  Vertical Dummy               -0.104\*              6.25

  Constant                     1.749\*               4.69

  Observations                 659                   \-\--

  R-Squared                    0.28                  \-\--

  Root Mean Squared Error      0.418                 \-\--

  \* Significant at 99-percent                       
  confidence level.                                  
  ---------------------------- --------------------- ---------------------

51. All of the estimated regression coefficients have the sign that was
    expected, and, except for median income and local-into-local, are
    statistically significant at a 99% confidence level. The three
    structural variables, the vertically integrated dummy, nationwide
    subscribers, and local market share, are all significant at the 99%
    confidence level. The positive relationship between cable prices and
    market share may suggest a structure-conduct nexus in which cable
    operators with high market shares wield unilateral market power to
    charge higher prices or it may reflect higher costs in markets in
    which cable operators have large market shares. The estimated
    coefficient for cable operators with a parent company having a large
    number of nationwide subscribers is positive and significant
    indicating no cost advantage for cable operators affiliated with
    large multiple service operators.

52. Prices are lower in franchise areas where cable operators are
    vertically integrated than in areas where they are not. The negative
    coefficient for the vertically integrated variable suggests that
    vertically integrated operators pass some of their cost savings to
    their subscribers. The vertically integrated variable, however, is
    also strongly correlated with the number of nationwide subscribers.
    This may affect its significance. We tested an alternative
    specification without the national size variable and found that the
    coefficient for the vertically integrated variable was slightly
    smaller but more significant.

**STATEMENT** **OF**

**CHAIRMAN KEVIN J. MARTIN**

*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*, MM
Docket No. 92-266

Congress requires us to issue an annual report on the price of basic
cable services. This year's report reveals what we already know from our
monthly bills: cable rates are rising. In fact, for the past decade,
cable rates have risen faster than the rate of inflation.

In 1996, Congress passed a comprehensive statute that embraced the idea
that competition was preferable to regulation. Since then, the price for
every service the Commission regulates has decreased---except for cable.
For instance, the average rate for wireless service has plummeted 80%
and average interstate telephony rates have decreased almost 40%. This
is, in part, because those other services have been subjected to
competition from providers who have competed on price, as well as on
service options and quality. In contrast, cable prices alone have
increased, and they have risen more than 90%. (See attached chart.)

Cable does face some competition from DBS, but our report reveals that
DBS and cable do not seem to compete on price. In other words, the
presence of a DBS operator does not have an impact on the price the
cable operator charges its subscribers. Significantly, however, where a
second cable operator is present, cable prices are significantly lower
(\$43.33 without competition vs. \$35.94 where there is competition).

And we are not alone in this conclusion. The Government Accounting
Office also concluded that the average monthly cable rate was
significantly lower only in areas with another wire-based
competitor.[^41]

In light of these findings, I believe it is critical then that the
Commission act to remove regulatory barriers to the ability of a second
cable operator to enter the market. When consumers have the ability to
choose among more than one cable operator, they receive one of the most
important benefits of competition that the 1996 Act envisioned: lower
prices. I look forward to continuing to work to foster additional cable
competition and choice that can lead to greater consumer benefits.

![](media/image3.wmf){width="4.997916666666667in" height="3.75625in"}

**CONCURRING STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

** **

*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*, MM
Docket No. 92-266

 

As I did last year, I will vote to concur in today's report on
ever-rising cable rates.  I think the document we release today does
represent an improvement over years past, but it still has not achieved
the level of comprehensiveness in data-gathering and analysis that I
have called for over the years I have been here.  Nevertheless, I do
thank the Chairman for his willingness to amend the Bureau's methodology
in response to some of the criticisms that Commissioner Adelstein and I
have made about earlier reports.  That helps.

 

Of particular importance, I note that this year's report contains an
econometric analysis of the survey results.  This allows us better to
gauge the relative importance of the various factors influencing the
price of cable service.  For instance, it discloses that there is a
positive relationship between local market share and cable prices, as
well as between a provider's number of nationwide subscribers and
prices.  In other words, customers of a large national cable company
that controls a large share of a local market generally pay more than
customers of a company with either a smaller national or local market
share.  Correlation does not necessarily imply causation, of course, but
this result certainly raises troubling questions about market power that
I hope will receive the Commission's further attention in future
reports.

 

            Despite the welcome addition of econometric analysis,
today's report still suffers from some of the same flaws that have been
identified by critics of earlier reports.  For example, the Government
Accountability Office pointed out more than two years ago that the FCC
relies on an unreliable definition of competition.  Yet today's report
continues along the same lines that the GAO criticized.  Another
example: we continue to rely on the operators' own reports of their rate
and cost structures, without any auditing of our own to assure the
accuracy of their data. 

 

            Given the importance of the cable industry to the nation's
economy and the staggering sums that consumers now pay for video service
each month -- not to mention our statutory mandate under section 623(k)
of our Act -- I believe the FCC has a plain responsibility to provide
more in-depth research.  I hope that next year we can build on the
improvements in this year's report in order to provide industry,
scholars, and the American public with a report that reflects more
comprehensively what is actually happening in the cable market and that
gives a more robust accounting of the factors that affect cable prices.

**CONCURRING Statement of**

**Commissioner Jonathan S. Adelstein**

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, MM
Docket No. 92-266

Once again we are presented with an annual *Report on Cable Industry
Prices* showing the price Americans pay for cable service spiraling ever
upward as cable companies continually report double digit increases in
revenues and cash flow.[^42] And once again this regular report provides
insufficient data and analysis to explain how cable companies' prices
are growing at such tremendous rates, leaving both us and Congress
without the information we need to know how best to combat rising
prices.

The price to consumers for cable service increased an average of 5.2%
this year to bring the ten year total price increase on cable television
rates to a whopping 93%. Few other goods and services in America cost
nearly twice today what they did in 1995. And as anyone would expect
from looking at these ever rising prices, the cable companies behind
them have swelling revenues year in and year out regardless of the
overall American economy. Questions about both ascending prices to
consumers and market dominance in the cable industry will be raised many
times in other proceedings over the next year. Other than the most basic
information that prices are continuing to rise and cable companies are
consolidating and growing richer, this report does not give either us or
the American people much information to work with in considering future
related proceedings.

Over the years, I have consistently pointed out areas where these annual
reports need more effort and also have offered many constructive
suggestions to improve them. While I am happy to see the econometric
analysis finally return in this report, I find its conclusion that cable
companies are using unilateral market power to extort unreasonable
prices sobering. Unfortunately, however, this appears to be the only
positive improvement in the work done on these reports. While an
international market comparison is made, it is made to a single foreign
city -- Hong Kong -- clearly hand-picked to support a particular
viewpoint. Whether one agrees with that viewpoint or not, a factual
analysis such as this is no place to hand pick particular comparisons.
Rather, as an expert agency, our analysis should include a broad
comparison to many similarly situated foreign markets in order to give
an accurate picture of cable competition at home and abroad.

Finally, the econometric analysis that addresses the impact of
consolidation, mergers and vertical integration in the cable industry on
consumer price is short on a meaningful and thoughtful discussion,
beyond the model specification narrative.

The underlying facts analyzed in this annual report are generated solely
from a survey of the cable companies and their responses are simply
assumed to be accurate. The suggestion to perform an audit of some of
these responses to see if we are really being told the truth has been on
the table for years. For example, the cable companies attempt to explain
their soaring prices through increases in the cost of programming
content. How do we know this is the case when the only data we have is
nothing more than what the cable companies decide to tell us? Also,
there are some curious results shown in the raw data that are not
addressed in the analysis. For example, there are some unexplained
differences between the price increases in analog cable and the
decreases or averaged miniscule increases in high quality digital
service and equipment. However, we do not know what the experts think is
the cause of this huge discrepancy, since no analysis was provided.

The lack of meaningful analysis in some areas and wealth of it in others
lend this report to criticism. The huge inconsistency in what types of
data and analysis will be included in any given year reinforce this
weakness since it makes meaningful comparison of the reports nearly
impossible. And the lack of auditing makes all the data in these reports
suspect at best, especially on the data the cable companies use to
justify their prices.

All of these deficiencies and inconsistencies make this report of
limited use in examining a cable industry except to tell us what we
already know: that consumers keep paying higher prices for cable year
after year and that, regardless of economic climate, the cable companies
keep posting huge annual profits. One conclusion that is easy to reach
is that this market is in desperate need of competition. I am hopeful
that the entrance of the telephone companies into this market will
provide badly needed competition that can help keep a lid on prices and
provide the incentive for innovation and new services for consumers.

**STATEMENT OF**

**COMMISSIONER ROBERT M. MCDOWELL**

*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*¸ MM
Docket No. 92-266

This Cable Price Survey presents statistical information about the
average rates for cable basic and expanded basic tiers of service in
markets with varying levels of competition. Compiling this information,
while potentially helpful, is only a first step. While the McDowell
family's cable bill has gone up a lot in recent years, I would like for
us to study the status of video competition in terms of not only prices,
but also value provided to consumers, programming costs, barriers to
entry and so forth. What the Cable Price Survey does not provide is an
analysis of all of the potential factors that could cause overall rate
increases. For instance, are higher rates reflective of many factors
including: consumers buying more bundled service offerings; greater
value being offered today compared with several years ago (such as the
benefits of digital cable over analog, or more channel offerings); cost
recovery due to regulatory burdens; or other causes? Such analyses will
better inform our actions with respect to furthering competition in the
video marketplace. In the meantime, I look forward to continuing to use
this report as a resource. Many thanks to the Media Bureau for their
work on this report.

[^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]: The term "service tier" generally refers to a category of cable
    service or other services provided by a cable operator and for which
    a separate rate is charged by the cable operator. *See* 47 U.S.C. §
    522(l7). Cable operators are required to offer a "basic cable
    service tier" that includes, at a minimum, local broadcast stations
    and public, educational, and governmental ("PEG") access channels
    that may be required pursuant to an agreement with a local
    government. *See* 7 U.S.C. § 543(b)(7). A "cable programming service
    tier" includes channels other than channels carried on the basic
    service tier or for which per channel ("premium") or per program
    ("pay-per-view") charges apply. *See* 47 U.S.C. § 543(k)(1)(2). The
    term "equipment" refers to a set-top converter box, remote control
    unit, and other equipment used to access cable television
    programming. *See* 47 U.S.C. § 543(b)(3).

[^3]: 47 U.S.C. § 543(k)(1) (cross-referencing 47 U.S.C. § 543(a)(2)).

[^4]: The Commission directed cable operators to respond to a survey
    questionnaire. *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*, 20 FCC Rcd 3485 (2005).

[^5]: Under the Cable Act, a cable operator may obtain a finding of
    "effective competition" for a community that meets one of four
    tests: (1) fewer than 30 percent of households subscribe to the
    cable operator's service (low penetration test); (2) at least two
    multichannel video programming distribution ("MVPD") providers each
    offer a comparable service to at least 50 percent of households and
    at least 15 percent of all households subscribe to service other
    than from the largest MVPD (50/15 test); (3) a municipality offers
    MVPD service to at least 50 percent of households (municipal test);
    or (4) a local exchange carrier (LEC) or its affiliate, or an MVPD
    using the facilities of such carrier or its affiliate, offers MVPD
    service by means other than direct broadcast satellite in an area
    that is also served by an unaffiliated cable operator (LEC test).
    *See* 47 C.F.R. § 76.905(b). The term "MVPD" refers to an entity
    such as, but not limited to, a cable operator that makes available
    for purchase multiple channels of video programming. *See* 47 C.F.R.
    § 76.905(d). If a community is deemed subject to effective
    competition, the local franchising authority may no longer regulate
    basic service tier rates, unless it seeks and is granted
    recertification. *See* 47 U.S.C. § 543(a)(2) and 47 U.S.C. § 916(a).

[^6]: The term "incumbent" refers to a cable operator that provided
    service before a competing provider entered the market.

[^7]: We note that, because DBS service is available nationwide, there
    may be other areas of the country where DBS penetration exceeds the
    15 percent threshold set forth in the so-called "50/15" effective
    competition test but the incumbent cable operator has not requested
    a finding of effective competition.

[^8]: *See* Table 11. This 16 percent includes the 4 percent of
    subscribers whose cable service providers do not offer separate
    rates for the basic tier and an expanded basic tier, but instead
    bundle all video channels except for digital service, premium, and
    pay-per-view channels into a basic tier.

[^9]: The term "expanded basic" generally refers to the cable tier with
    (a) the most channels and (b) the most subscribers except for basic
    service. Expanded basic does not include basic service channels,
    music and other audio channels, mini-tiers of channels, digital
    service, premium channels, pay-per-view, or video-on-demand
    channels.

[^10]: The weights or importance given to each subgroup and group in
    calculating the overall average price are based upon estimates of
    the share of cable subscribers in each subgroup and group.

[^11]: We note that several major MSOs have released quarterly financial
    data in recent days. Comcast, Time Warner, Cablevision, and Mediacom
    reported double digit increases in operating cash flow and revenues,
    as compared with the third quarter of 2005. Comcast reported 15 and
    12 percent increases in operating cash flow and revenues,
    respectively; Time Warner reported 28 and 44 percent increases;
    Cablevision reported 16 and 13 percent increases; and Mediacom
    reported 10 and 11 percent increases. Comcast Corp., Comcast Reports
    *Third Quarter 2006 Results*, (press release), October, 26, 2006;
    Time Warner Inc., *Time Warner Inc. Reports Third Quarter 2006
    Results*, (press release), November 1, 2006; Cablevision Systems
    Corp., *Cablevision Systems Corporation Reports Third Quarter 2006
    Results;* (press release), November 8, 2006; Insight Communications
    Co., Mediacom Communications Corp., *Mediacom Communications Reports
    Results for Third Quarter 2006,* (press release), November 2, 2006.
    Comcast's revenue and operating cash-flow has grown by double digits
    for 25 consecutive quarters. Mike Farrell, *Comcast Roars in 1Q*,
    *Top Operator Grows Across the Board, Lifting Sector Stocks*,
    [multichannel news]{.smallcaps}, May 1, 2006 at 6; Comcast Corp.,
    *Comcast Reports Third Quarter 2006 Results*, (press release),
    October, 26, 2006; and *Comcast Reports Second Quarter 2006
    Results*, (press release), July 27, 2006.

[^12]: Throughout the 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
    Commission finding of effective competition represents a relatively
    small group of cable subscribers, an estimated 9 percent of the
    total nationwide, and thus there is only a slight effect from this
    group on the overall average.

[^13]: *See* i-Cable Communications Ltd., at
    http://www,i-cablecomm.com/ir/report/index.php. Between 1995 and
    2002, i-Cable Communications Ltd. held an exclusive license to
    provide pay television service throughout Hong Kong via its Cable TV
    Hong Kong subsidiary. In July 2002, the Hong Kong government opened
    the pay television market to competition. Between 1995 and 2002,
    Cable TV Hong Kong's Average Revenue Per User (ARPU) increased 13
    percent. For purposes of this analysis, we use ARPU as a proxy for
    the average bill paid by cable subscribers. During this same period,
    Hong Kong's Composite CPI increased approximately 2 percent. *See*
    The Government of the Hong Kong Special Administrative Region of the
    People's Republic of China, Census and Statistics Department, at
    http://www.censtatd.gov.hk.

[^14]: From 2002 to 2005, i-Cable's ARPU fell from HK\$233 to HK\$212.
    In its most recent Annual Report, i-Cable ascribed its declining
    ARPU to the advent of "aggressive pricing" and "aggressive
    competition" from its competitors. *See* i-Cable Communications Lt.,
    2005 Annual Report, at 5, 11, available at
    http://www.i-cablecomm.com/ir/report/index/php.

[^15]: *See* http://www.i-cablecomm.com/ir/report/index/php. I-Cable's
    ARPU increased from HK\$206 in 1995 to HK\$212 in 2005, an increase
    of 3 percent.

[^16]: *See* http://www.i-cablecomm.com./ir/report/index/php;
    www.pccw.com/eng.

[^17]: *See* i-Cable Communications Lt., 2005 Annual Report, at 11,
    available at http://www.i-cablecomm.com/ir/report/index/php.

[^18]: BLS, All Urban Consumers, U.S. City Average (monthly series,
    extracted April 2005), Series ID CUUR0000SA0, All Items Less Food
    and Energy, Base Period 1982-84=100 ("CPI").

[^19]: The BLS also publishes an index for cable, satellite television,
    and satellite radio service. BLS, All Urban Consumers, U.S. City
    Average, (monthly series), Series ID CUUR0000SERA02, Cable and
    Satellite Television and Radio Service, Base Period December
    1983=100. In prior Price Survey Reports we compared the data
    collected in our survey to those calculated by BLS for this
    subcategory. However, the BLS index for this subcategory reflects
    the prices charged not just for cable service but also for satellite
    television and satellite radio service. Thus, it is not appropriate
    to compare the numbers we collect regarding cable prices to those in
    this BLS subcategory.

[^20]: *See,* *Adelphia Deal May Cut Time Warner's Programming Cost, but
    Not Consumer's Bills*, New York Times, July 31, 2006, Section C,
    Page 6.

[^21]: Id.

[^22]: *See* Table 10 and Attachment 7 regarding availabilities of
    various cable services.

[^23]: *See* 47 C.F.R. § 76.1801.

[^24]: *See* B. J. Mandel, S*tatistics for Management* (1984) at 258.
    Formula parameters were set to determine a sample size large enough
    to estimate monthly cable prices within 50 cents of actual price
    with 95 percent probability.

[^25]: A relatively higher percentage of competitive communities were
    selected because this group is relatively small and the sampling
    formula requires a minimum number for statistical precision.

[^26]: 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.

[^27]: For a discussion of weighted averages, see W. E. Deming, *Some
    Theory of Sampling* (1950) at 135-211.

[^28]: 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 price for basic-plus-expanded basic service
    as of January 1, 2005 averaged \$43.04, and the standard error was
    32 cents, as shown in Attachment 2. We estimate at a 95 percent
    confidence level that the true average lies between \$42.41 and
    \$43.67. We arrive at the lower end of the range by subtracting
    1.955 x \$0.32 from our average of \$43.10. We arrive at the upper
    end by adding 1.955 x \$0.32 to \$43.10.

[^29]: For previous econometric studies, *see* *Statistical Report on
    Average Rates for Basic Service, Cable Programming Service, and
    Equipment,* 17 FCC Rcd 6301 (2002); 16 FCC Rcd 4346 (2001); 15 FCC
    Rcd 10927 (2000); and 14 FCC Rcd 8331 (1999).

[^30]: N. Collins and L. Peterson, *Price-Cost Margins and Industry
    Structure,* Review of Economics and Statistics, 51 (Aug. 1969) at
    27-286. For discussion of empirical studies, *see* D. Waldman and E.
    Jensen, *Industrial Organization* (2001) at Ch. 16.

[^31]: L. Weiss, *The Concentration-Profits Relationship and Antitrust,*
    in H. Goldschmidt et al, *Industrial Concentration: The New
    Learning* (1974), updated in F.M. Scherer and D. Ross, *Industrial
    Market Structure and Economic Performance,* 3^rd^ Ed. (1990)
    (Scherer and Ross).

[^32]: S*ee, e.g.,* T.F. Bresnahan, *Empirical Studies of Industries
    with Market Power,* R. Schmalnsee and R. Willig, *Handbook of
    Industrial Organization Vol. II* (1989) at Ch. 17; Scherer and Ross
    at 4-5; M.D. Whinston, *Lectures on Antitrust Economics: Chapter 3*
    at 27, www.csio.econ.northwestern.edu (Whinston); and W.N Evans, L.
    Froeb, and G. Werden, *Endogeneity in the Concentration-Price
    Relationship: Causes, Consequences, and Cures,* Journal of
    Industrial Economics (Dec. 1993) at 431-38 (Evans, Froeb, and
    Werden).

[^33]: L. Weiss, *The Structure-Conduct-Performance Paradigm and
    Antitrust,* 127 U. Pa. L. Rev. 1104 (1978-79).

[^34]: T. Chipty, *Vertical Integration, Market Foreclosure, and
    Consumer Welfare in the Cable Television Industry,* American
    Economic Review (Jun. 2001) at 428-53.

[^35]: *See* C.M. Newmark, *Price-Concentration Studies: There You Go
    Again,* DOJ/FTC Joint Workshop on Merger Enforcement, Concentration
    and Market Shares panel (Feb. 2004) (Newmark).

[^36]: *See* Whinston at 28-29 and Evans, Froeb, and Werden.

[^37]: For a discussion of ordinary least squares and endogeneity, see
    J. Wooldridge, *Econometric Analysis of Cross Section and Panel
    Data,* Cambridge: The MIT Press (2002) at Ch. 4: The Single-Equation
    Linear Model and OLS Estimation at 49-81.

[^38]: *See* 2004 Competition Report at Table C-1 and
    www.fcc.gov/mb/engineering/liststate.html.

[^39]: For some communities, we used state level penetration data to
    estimate the number of DBS subscribers. This number was then used to
    estimate cable's share of MVPD subscribers.

[^40]: The effective competition dummy variable takes on a value of one
    if a petition for a finding of effective competition has been
    granted. The statutory definition of effective competition includes
    \"low penetration\" cable operators, i.e.*,* those where fewer than
    30 percent of households in a franchise area subscribe to the cable
    operator's service. Since low penetration operators may behave very
    differently from operators with a more substantial presence, they
    have been excluded. We tested a regression equation using the low
    penetration operators as part of the effective competition dummy
    and, possibly due to the few numbers in the sample, found that the
    results were almost identical to the results reported here.

[^41]: *See* U.S. General Accountability Office, *Issues Related to
    Competition and Subscriber Rates in the Cable Television Industry*,
    GAO-04-8 (Oct. 2003)

[^42]: ¶ 10, FN 11, *infra*.