**SEPARATE STATEMENT OF**

**MICHAEL K. POWELL**

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

What a difference a decade makes. At the close of 1993, the cable
industry, holding a monopoly in nearly every local market, dominated the
pay television landscape---serving nearly 95% of the market with mostly
one-way analog cable systems capable of delivering thirty or so
television channels. In hindsight, however, 1993 would prove to be a
watershed year that marked the beginning of dramatic shifts in the
communications industry that would unleash a decade of benefits to the
American public arising from increased competition, investment,
innovation, and diversity in the video delivery and programming markets.

The transformation started in earnest that year, as we oversaw the
launch of the first high-power DBS service in the United States and over
the course of the decade have seen DBS services compete to whittle away
cable's former near monopoly status. Today, DBS has over 21% of the
pay-television market and cable's 95% share in 1993 now stands at 75
percent.

Much like in the wireless and long-distance industries, the American
public has been the primary beneficiary of the advancement of
facilities-based competition in the television industry. Increased DBS
competition to cable, the steady loss of market share, and Congress'
broad deregulation of the cable industry allowed cable operators across
the country to invest some \$75 billion to upgrade their infrastructure
into a two-way digital broadband platform. As a result, at the dawn of
2004, broadband Internet services, cable telephony services, including
Internet telephony, high-definition television, personal video recorders
and video on demand services are increasingly available to the public.
This investment has, in turn, spurred further investment by other
segments of the communications industry, most notably in the broadband
Internet space as traditional telephone companies and traditional and
emerging wireless providers throughout the country continue to invest in
upgrading their infrastructure to compete in today's converging
communications marketplace. Competition in the pay television market has
had a domino effect of enhancing competition and innovation across the
communications industry. In addition to these new services, competition
is constraining and, at times, lowering prices (most notably in
equipment costs) and forcing operators in the pay-television market to
improve the quality of their service.

These benefits have been significant, but it may be that the greatest
benefits stemming from the investments of DBS and cable operators over
the last ten years has been the expanding diversity of programming,
ideas and opinions that come across our television screens on a daily
basis. Increased infrastructure investment has meant increased channel
capacity and with it more diversity. The thirty channel systems of a
decade ago are today cable and satellite systems offering literally
hundreds of channels. It is unquestioned that this increased channel
capacity has allowed the biggest of our nation's media companies to get
bigger, but it is equally undeniable that it has also provided
opportunities for new, independent cable networks and
programmers---sparking intense competition in the video programming
market as well.

Big and small media companies are bringing more program diversity to
more Americans, serving our individual and diverse interests in
abundance. Whether your interests lie in sports, history, homemaking,
Hollywood, culture, technology, politics, minority programming,
religion, the outdoors or countless other categories, I believe that
there is more on television today, from a greater variety of sources
than at any time in history.

In addition, news, political and public discourse continues to expand on
television. The last ten years has seen the rise of news networks such
as BBC America, Bloomberg TV, the Fox News Channel and MSNBC as well as
many others, serving, along with more established players, as outlets
for opinions from across the political, social and economic spectrum. We
live in a world where every debate amongst presidential candidates is
now on television and where opposing viewpoints can be found making
their case on the topics of the day **\--** from segment to segment on
political program to program. And as our ability to find diverse
programming and viewpoints on our television screens increases, so too
does the amount of local and regional programming. Local cable news and
sports programming continues to proliferate on cable and satellite
television systems.

Over this past decade Americans have responded and taken advantage of
the increased competition, investment, innovation and diversity in the
pay-television and programming markets. More Americans pay for
television today than they did a decade ago. Today, 85% of television
households (94.1 million households) pay for television, as compared to
63% of TV households (60.3 million households) in 1993. As more diverse
and higher quality programming has emerged on cable and satellite
systems, more people are watching. For the second year in a row (and
only the second time in history), cable programming networks
collectively brought more viewers to their channels throughout the day
than did the seven broadcast networks and in primetime, cable networks
brought in a viewing share of over 50% of all television viewers (vs.
44.7% of the seven networks). The shift in viewing should come as no
surprise as the quality of cable programming has also been recognized as
award nominations and wins continue to reach new heights for cable
programming.

The emergence of DBS as a competitive alternative to cable, however, was
not the only innovation of 1993 to forever change the video marketplace.
That year also produced the commercialization of the Internet that has
not only fundamentally changed the life and course of many Americans,
but that will have a tremendous impact on the video delivery and
programming markets in the next decade. Largely non-existent a decade
ago, today, we are beginning to see the possibilities that Internet
video streaming can offer and as this Commission continues its push to
bring universal, affordable and competitive broadband Internet access to
every American, the use of the Internet to deliver even more competitive
and diverse video offerings can and should be realized in the future.
This past year, for instance, sports had a banner year in Internet video
streaming as Major League Baseball made over 1,500 games available over
the Internet. The WNBA, and several college programs including Texas
Tech and the University of Connecticut's women's basketball team have
begun webcasting their games over the last year. Video streaming of
news, movies and other programming have also made great strides over the
past year. The Internet and broadband platforms of tomorrow should
continue to provide producers of programming with increasing
opportunities to serve the individual and diverse interests of the
American people.

Although the past decade in the markets for pay-television and
programming have produced an explosion of benefits for the American
public and the decade ahead looks even brighter, our work is far from
done. Despite the highly competitive nature of this industry, we must
continue to provide investment opportunities for new providers of video
distribution and producers of new networks and programming. We must
continue to allow the Internet's innovators to bring broadband and video
streaming to the masses. And, I, along with my colleagues will continue
to reach out to interested stakeholders to ensure that the Commission
improves and updates it data collection mechanisms to better understand
this changing, competitive and dynamic marketplace. The fact remains
that the United States has the most competitive and diverse media
marketplace the world has ever seen and we must continue to bring the
benefits of that competition and diversity to our citizenry.