Various entities and groups develop and distribute video content. Content producers, such as Sony Pictures Entertainment and CBS Television Studios, sell the right to use their content to a variety of users, such as broadcast networks, cable networks, and local television stations. The financial compensation received by content producers for the use of their copyright-protected content is a licensing fee or royalty. Broadcast and cable networks produce and aggregate programming from other content producers for distribution to the public. Broadcast networks consist mainly of four major networks (ABC, CBS, FOX, and NBC), and several smaller networks, such as the CW Television Network, MyNetworkTV, and ION Television. Content is produced by the major networks’ affiliated production companies, which can include movie and television studios, and independent producers. Cable networks aggregate programming from content producers and some also produce programming, which can include niche programming—that is, programming that targets specific demographics. For instance, Lifetime Television offers programming that specifically targets women, while MTV offers programming that targets the 18-to-34 age group. Video content is distributed to households by local television stations, cable and satellite companies, and most recently, OVDs. Each of the four major broadcast networks owns and operates some local television stations; other stations may be independently owned but affiliated with one of the major networks or, as is the case with noncommercial educational television, unaffiliated with any major network. FCC licenses local television stations, which have the right to transmit a video broadcast signal on a specific radio frequency in a particular area and at a particular strength. Local television stations that are affiliated with a broadcast network negotiate licensing agreements with their network for the right to air network-furnished content, including prime time shows, afternoon soap operas, and national news programs. MVPDs obtain a variety of programming from both local stations and cable networks. Time Warner Cable, DISH Network, and Verizon are examples of cable, satellite, and telephone MVPDs, respectively, that license and distribute content to subscribers. Figure 1 illustrates how television programming is distributed through broadcast and traditional subscription video service. Consumers can watch movies and television programs through computers, set top boxes, game consoles, and of course televisions. Some may also have the option of using tablets, smartphones, and other mobile devices to view content via the Internet, either through a MVPD service or an OVD, such as Netflix. Typically, the general public views television programming through broadcast or subscription video service. Local television stations provide free over-the-air programming to the public. In contrast, consumers pay fees to providers of subscription video services, including cable companies, satellite providers, or telephone companies. According to the National Cable and Telecommunications Association (NCTA), the trade association for cable companies, in 2012, over 85 percent of U.S. households had a MVPD subscription, with the remainder accessing television through an antenna. Industry participants receive revenue from a variety of sources. Companies that create programming receive the majority of their revenue from license fees. Broadcast networks receive the majority of their revenue from advertising. Cable networks receive revenue from both monthly subscriber fees, paid by MVPDs, and advertising. MVPDs— which own, operate, and maintain their cable and satellite networks— receive the majority of their revenues from monthly subscription fees paid by consumers, supplemented with advertising. Many MVPDs also provide broadband Internet and telephone services over their networks or in partnership with other companies. Pub. L. No. 98-549, 98 Stat. 2780 (1984). ensuring reasonable rates for both the basic cable service and the cable programming service tier (CPST), commonly referred to as expanded basic, for cable systems not subject to effective competition as defined by the Act; Congress passed the 1992 Act in response to increasing rates. In addition, the 1992 Act required cable companies to carry all local television stations that requested carriage—known as must carry—or negotiate with television stations seeking compensation—known as retransmission consent. Cable companies that also produced content were required to provide their content to unaffiliated MVPDs at nondiscriminatory rates—known as program access. The Telecommunications Act of 1996 phased out regulation of rates for the CPST and included provisions that allowed for the growth of telephone companies in the video distribution marketplace. For example, the 1996 Act eliminated the restriction on telephone companies providing video service directly to subscribers in areas where they provided telephone service. Several large media and entertainment companies continue to produce much of the content watched by consumers. According to a 2012 report cited by FCC, seven companies’ broadcast and cable networks accounted for about 95 percent of all television viewing hours in the United States. These seven companies hold some combination of television and movie production studios, broadcast networks, and cable networks. The seven companies and some of their holdings include: CBS: CBS (broadcast network), CBS Television Studios, Showtime; Discovery Communications: Discovery Channel, TLC, A&E, Animal Disney: ABC (broadcast network), ESPN, Disney Channel, Walt NBCUniversal: NBC (broadcast network), Universal Pictures, USA Network, Telemundo Television Studios, The Weather Channel; News Corporation: FOX (broadcast network), FOX News Channel, 20th Century Fox, 20th Century Fox Television; Time Warner: The CW Network (broadcast network), CNN, HBO, TBS, Warner Brothers Studios; and Viacom: MTV, Comedy Central, Nickelodeon, Paramount Pictures. We previously reported that the major broadcast networks (ABC, CBS, FOX, and NBC) and their affiliated studios produced from 76 to 86 percent of prime-time programming hours in 2002, 2005, 2008, and 2009, with the remaining hours coming from independent producers.similarly reported that the production studios of major media and entertainment companies, which also hold broadcast and cable networks, often create and license television programs and movies. This pattern does not hold for all companies. For example, Discovery Communications does not own a major television or movie studio and Sony Corporation, another large media and entertainment company, operates a television and movie studio, but does not operate a broadcast or cable network. The concentration of content production among a handful of large media and entertainment companies has changed little in recent years. We compared the ownership of major broadcast and cable networks from 2005 through 2012, and found little change in the pattern of ownership and concentration of production. For example, of the top 20 cable networks by subscribership in 2005, more than half experienced no change in ownership from 2005 through 2012. However, some ownership change did occur during this period. In 2005, the former Viacom split into two companies—CBS and Viacom. In 2009, the Time Warner Cable distribution business was spun off from the Time Warner Inc. content business. Lastly, Comcast, the largest distribution company in the United States, merged with NBCUniversal;NBCUniversal’s content and networks to Comcast’s existing, more limited media holdings, which include the Golf Channel and E! Entertainment. Since 2005, the introduction of telephone-based video service has brought additional MVPD competition to some areas. Traditional telephone companies AT&T and Verizon—through their respective U- verse and FiOS products—have led this change, introducing video services in various areas across the country and competing with cable and satellite companies. Verizon first introduced its FiOS TV service in 2005 and as of year-end 2012, reported having 4.7 million subscribers with service available to 17.6 million households. As of year-end 2012, AT&T’s U-verse service had 4.5 million subscribers with service available to more than 24.5 million households. In addition to AT&T and Verizon, other competition has emerged in a limited number of areas. For example, Google introduced Google Fiber in the Kansas City metropolitan area. Like cable companies, AT&T, and Verizon, Google Fiber includes broadband Internet and television service. Google Fiber is a pilot project, and it is unknown to what extent Google will expand its deployment to other cities; although, in April 2013, Google announced that it would introduce Google Fiber in Austin, Texas, and Provo, Utah. In addition, we have previously reported that the Universal Service Fund managed by FCC, which provides subsidies to telephone companies that serve rural and other remote areas with high costs, enables some companies to upgrade their telephone networks, including upgrading to fiber optic cable and extending it closer to their customers. The upgraded networks enable these companies to provide video and broadband service in some rural and remote areas. With the new entry in some areas, roughly 1 in 3 households had access to at least 4 MVPDs at year-end 2010. As a result, the nationwide market shares have shifted among MVPDs since 2005 (see fig. 2). In particular, cable companies have seen their nationwide market share drop, continuing a longer-term decline. For example, NCTA estimated that cable companies’ share of MVPD subscribers has dropped from 98 percent in 1992 to 57 percent in 2012. Satellite services have continued to grow, although more slowly in recent years. Financial analysts and other experts report that satellite companies could face increasing competitive challenges from cable and telephone companies going forward. In particular, as consumers increasingly purchase a bundle of video, broadband Internet, and telephone services, satellite’s slower Internet service could dissuade consumers from purchasing satellite For example, DirecTV reported that various telephone and service.broadband companies also sell its service as part of a bundle with their voice and data services, and these companies could focus less effort and resources selling DirecTV’s service or decline to sell it at all as they deploy networks with the capability of providing video, voice, and data services. Although more households have access to at least 4 MVPDs than in the past, roughly 2 in 3 households still had access to 3 or fewer MVPDs at year-end 2010, 2 of which were the satellite providers.