CMCSA » Topics » Video Services

This excerpt taken from the CMCSA 10-K filed Feb 20, 2009.

Video Services

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This excerpt taken from the CMCSA 10-K filed Feb 20, 2008.

Video Services

We compete with a number of different sources that provide news, information and entertainment programming to consumers, including:

 

 

DBS providers that transmit satellite signals containing video programming, data and other information to receiving dishes located on the subscriber’s premises

 

 

incumbent local exchange carriers (“ILECs”) that have built and are continuing to build wireline fiber-optic-based networks, in some cases using Internet Protocol (“IP”) technology, to provide video services in substantial portions of their service areas and in an increasing number of our service areas, in addition to marketing DBS service in certain areas

 

 

other wireline communications providers that build and operate wireline communications systems in the same communities that we serve, including those operating as franchised cable operators or under an alternative regulatory scheme known as open video systems

 

 

online services that offer Internet video streaming, downloading and distribution of movies, television shows and other video programming

 

 

satellite master antenna television systems, known as SMATVs, that generally serve condominiums, apartment and office complexes, and residential developments

 

 

local television broadcast stations that provide free over-the-air programming that can be received using an antenna

 

 

digital subscription services transmitted over local television broadcast stations that can be received by a special set-top box

 

 

wireless and other emerging mobile technologies that provide for the distribution and viewing of video programming

 

 

video stores and home video products

 

 

movie theaters

 

 

newspapers, magazines and books

 

 

live concerts and sporting events

In recent years, Congress has enacted legislation and the FCC has adopted regulatory policies intended to provide a favorable operating environment for existing competitors and for potential new competitors to our cable systems. The FCC adopted rules favoring new investment by ILECs in networks capable of distributing video


 

  5   Comcast 2007 Annual Report on Form 10-K


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programming and rules allocating and auctioning spectrum for new wireless services that may compete with our video service offerings. Furthermore, Congress and various state governments are considering measures that would reduce or eliminate local franchising requirements for new entrants into the multichannel video marketplace, including ILECs. Certain of these franchising entry measures have already been adopted by the FCC and in many states in which we operate. We could be significantly disadvantaged if proposals to change franchising rules for our competitors, but not for cable operators, are approved and implemented (see “ Legislation and Regulation” below).

Direct Broadcast Satellite Systems. According to recent government and industry reports, conventional, medium-power and high-power satellites provide video programming to over 30 million subscribers in the United States. DBS providers with high-power satellites typically offer more than 300 channels of programming, including programming services substantially similar to those our cable systems provide. Two companies, DIRECTV and EchoStar, provide service to substantially all of these DBS subscribers.

High-power satellite service can be received throughout the continental United States through small rooftop or side-mounted outdoor antennas. Satellite systems use video compression technology to increase channel capacity and digital technology to improve the quality and quantity of the signals transmitted to their subscribers. Our digital cable service is competitive with the programming, channel capacity and quality of signals currently delivered to subscribers by DBS providers.

Federal legislation establishes, among other things, a compulsory copyright license that permits satellite systems to retransmit local broadcast television signals to subscribers who reside in the local television station’s market. These companies are currently transmitting local broadcast signals in most markets that we serve. Additionally, federal law generally provides satellite systems with access to cable-affiliated video programming services delivered by satellite. These DBS providers are also attempting to expand their service offerings to include, among other things, high-speed Internet services. They have also entered into marketing arrangements with ILECs in which the DBS providers’ video services are promoted and sold together with an ILEC’s high-speed Internet and phone services.

Incumbent Local Exchange Carriers. ILECs, in particular AT&T and Verizon, have built and are continuing to build fiber-optic-based networks to provide video services in substantial portions of their service areas. These ILECs have begun to offer video services in an increasing number of our service areas and, in certain areas, video services are being offered in addition to joint marketing arrangements ILECs have entered into with DBS providers. ILECs have taken various positions on the question of whether they need

a local cable television franchise to provide video services. Some, like Verizon, have applied for local cable franchises while others, like AT&T, claim that they can provide their video services without a local cable franchise. Notwithstanding their positions, both AT&T and Verizon have filed for video service franchise certificates under recent state franchising legislation (see “Legislation and Regulation” below).

Other Wireline Providers. We operate our cable systems under nonexclusive franchises that are issued by a local community governing body, such as a city council or county board of supervisors or, in some cases, by a state regulatory agency. Federal law prohibits franchising authorities from unreasonably denying requests for additional franchises, and it permits franchising authorities to operate cable systems. In addition to ILECs, various companies, including those that traditionally have not provided cable services and have substantial financial resources (such as public utilities, including those that own some of the poles to which our cables are attached), have obtained cable franchises and provide competing communications services. These and other wireline communications systems offer video and other communications services in various areas where we hold franchises. We anticipate that facilities-based competitors will emerge in other franchise areas that we serve.

Satellite Master Antenna Television Systems. Our cable systems also compete for subscribers with SMATV systems. SMATV system operators typically are not subject to regulation in the same manner as local, franchised cable system operators. SMATV systems offer subscribers both improved reception of local television stations and much of the programming offered by our cable systems. In addition, some SMATV operators offer packages of video, internet and phone services to residential and commercial developments.

Broadcast Subscription Services. Local television broadcasters in a few of our service areas sell digital subscription services. These services typically include a limited number of video programming services for a monthly fee.

This excerpt taken from the CMCSA 10-K filed Feb 26, 2007.

Video Services

Ownership Limits. The FCC is considering imposing “horizontal ownership limits” that would limit the percentage of video subscribers that any single cable provider could serve nationwide. A federal appellate court struck down the previous 30% limit, and the FCC is now considering this issue anew. We serve approximately

 

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27% of multichannel video subscribers. If the FCC were to reinstate ownership limits similar to those previously imposed, such limits would restrict our ability to take advantage of future growth opportunities. The FCC is also assessing whether it should reinstate “vertical ownership limits” on the number of affiliated programming networks a cable operator may carry on its cable systems. The previous limit of 40% of the first 75 channels was also invalidated by the federal appellate court. The percentage of affiliated programming networks we currently carry is well below the previous 40% limit, but it is uncertain how any new vertical limits might affect our Programming businesses. In addition, the FCC is considering revisions to its ownership attribution rules that would affect which cable subscribers are counted under any horizontal ownership limit and which programming interests are counted under any vertical ownership limit. It is uncertain when the FCC will rule on these issues.

Pricing and Packaging. The Communications Act and the FCC’s regulations and policies limit the prices that cable systems may charge for limited basic service, equipment and installation as well as the manner in which cable operators may package premium or pay-per-view services with other tiers of service. These rules do not apply to cable systems that are determined by the FCC to be subject to “effective competition,” but these determinations have thus far been made for only a small number of our cable systems. Failure to comply with these rate rules can result in rate reductions and refunds for subscribers. From time to time, Congress and the FCC consider imposing new pricing or packaging regulations on the cable industry, including proposals requiring cable operators to offer programming services on an a la carte or themed-tier basis instead of, or in addition to, our current packaged offerings. It is unclear whether or when Congress, the FCC or any other regulatory agency may adopt any new requirements with respect to the pricing or packaging of video services and how such requirements, if adopted, would affect our Cable and Programming businesses. Additionally, Communications Act uniform pricing requirements may affect our ability to respond to increased competition through offers, promotions or other discounts that aim to retain existing subscribers or regain those we have lost.

Must-Carry/Retransmission Consent. Cable operators are currently required to carry, without compensation, the programming transmitted by most local commercial and non-commercial television stations (“must-carry”). Alternatively, local television stations may insist that a cable operator negotiate for “retransmission consent,” which may enable popular stations to demand cash payments or other significant concessions (such as the carriage of, and payment for, other programming networks affiliated with the broadcaster) as a condition of transmitting the TV broadcast signals that cable subscribers expect to receive. As part of the transition from analog to digital broadcast transmission (now scheduled for completion in February 2009), Congress and the FCC gave each local broadcast station a digital channel, capable of carrying multiple programming streams, in addition to its current analog channel. The FCC has to date rejected proposals to require cable operators to: (i) simultaneously carry both the analog and digital signals of each broadcaster during the transition (cable operators currently are obligated to carry only the broadcaster’s analog signal during the transition); and (ii) carry the multiple program streams transmitted within a broadcaster’s digital signal (cable operators currently are obligated to carry only the primary digital video stream of the broadcaster after the broadcaster surrenders its analog channel). However, such proposals may continue to be presented by the FCC. In general, if such expanded carriage requirements were adopted, we would have less freedom and capacity to provide the services that we believe will be of greatest interest to our subscribers.

Program Access/Licensee Agreements. The Communications Act and the FCC’s “program access” rules generally prevent satellite video programmers affiliated with cable operators from favoring cable operators over competing MVPDs, such as DBS, and limit the ability of such programmers to offer exclusive programming arrangements to cable operators. The FCC has extended the exclusivity restrictions through October 2007 and is expected to launch a proceeding to consider a further extension of the exclusivity restrictions in the first half of 2007. There is also increased attention at the FCC and in Congress focused on exclusive arrangements involving sports programming. In addition, the Communications Act and the FCC’s “program carriage” rules prohibit cable operators or other MVPDs from requiring a financial interest in any video programming network as a condition of carriage or from unreasonably restraining the ability of an unaffiliated programming network to compete fairly by discriminating against the network on the basis of its nonaffiliation in the selection, terms or conditions for carriage. The FCC is planning to launch a rulemaking aimed at streamlining the complaint processes for program

 

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access and program carriage complaints. Any decision by the FCC or Congress to apply new program access or program carriage regulations to cable operators could have an adverse impact on our businesses. Additionally, the FCC’s Adelphia Order (discussed below) expands the application of the program access rules to Comcast-affiliated regional sports networks (“RSNs”) and establishes an arbitration option for disputes over carriage of unaffiliated RSNs.

Cable Equipment Issues. The FCC has adopted regulations aimed at promoting the retail sale of set-top boxes and other equipment that can be used to receive digital video services. Currently, most cable subscribers access these services using a leased set-top box that integrates cable access security with other operating functions. Subscribers may also obtain digital video services through a separate piece of equipment, known as a CableCARD, that connects to digital cable devices purchased at retail. Effective July 2007, cable operators must cease placing into service new set-top boxes with integrated security. At that time, newly deployed leased set-top boxes must use a separate piece of equipment (typically a CableCARD) to provide access to digital video services. A federal court upheld the ban on integrated set-top box security in August 2006, leaving any subsequent relief to the FCC. We and other companies subject to the ban are currently seeking FCC waivers to exempt some limited function set-top boxes from the ban and/or to extend the deadline to accommodate a newer security technology that can be downloaded to leased set-top boxes as well as retail equipment. Our waiver request for limited-function set-top boxes was denied by the FCC’s Media Bureau in January 2007. We have requested a review of that decision by the full FCC, but there is no assurance that our request will be granted. If the FCC does not extend the deadline and does not grant our waiver request, we will be forced to incur added costs in purchasing CableCARD-enabled set-top boxes and the associated CableCARDs.

In addition, the FCC has adopted rules to implement an agreement between the cable and consumer electronics industries aimed at promoting the manufacture of “plug-and-play” TV sets that can connect directly to the cable network and receive one-way analog and digital video services without the need for a set-top box. We believe that we are substantially in compliance with these one-way plug-and-play requirements.

Franchise Matters. Cable operators generally operate their cable systems pursuant to non-exclusive franchises granted by local or state franchising authorities. While the terms and conditions of franchises vary materially from jurisdiction to jurisdiction, franchises typically last for a fixed term, obligate the franchisee to pay franchise fees and meet service quality, customer service and other requirements, and are terminable if the franchisee fails to comply with material provisions. The Communications Act contains provisions governing the franchising process, including, among other things, renewal procedures designed to protect incumbent franchisees against arbitrary denials of renewal. We believe that our franchise renewal prospects generally are favorable.

There has been considerable activity at the federal and state level regarding franchise requirements imposed on new entrants. In December 2006, the FCC adopted new rules designed to ease the franchising process and reduce franchising burdens for new entrants. In announcing this decision, the FCC said that it would, among other things, limit the range of financial, construction and other commitments that franchising authorities can request of new entrants, require franchising authorities to act on franchise applications by certain new entrants (such as ILECs) within 90 days, and preempt certain local “level playing field” franchising requirements. However, the FCC has not yet released the text of its order, so the terms are not yet fully known. We expect the order will be subject to a court challenge once it is released. In addition, Congress and various state governments are considering measures that would lessen or eliminate franchising requirements for new entrants, including ILECs. Several states have already enacted legislation to provide statewide franchising or to simplify local franchising requirements for new entrants, thus relieving new entrants of many of the local franchising burdens faced by incumbent operators. Certain of these state statutes allow the incumbent cable operator to “opt into” the new state franchise where a competing state franchise has been issued for the incumbent’s franchise area. However, even in those states where the incumbent cable operator is allowed to opt into a state franchise, the incumbent operator typically retains certain franchise obligations that are more burdensome than the new entrant’s state franchise. We have significant operations in several of the states that have passed state franchising legislation and we anticipate that additional states will pass similar franchising legislation.

 

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The FCC has also announced that it will initiate a follow-on rulemaking to consider whether to make similar changes for existing cable operators. We could be materially disadvantaged if rules that provide less burdensome franchising requirements for new entrants, but not existing operators, are implemented. Furthermore, Congress may also consider proposals to eliminate or streamline local franchising requirements for ILECs and other new entrants. If enacted, this legislation could materially disadvantage existing operators.

Pole Attachments. The Communications Act requires phone companies and other utilities (other than those owned by municipalities or cooperatives) to provide cable systems with nondiscriminatory access to any pole or right-of-way controlled by the utility. The rates that utilities may charge for such access are regulated by the FCC or, alternatively, by states that certify to the FCC that they regulate such rates. Several states in which we have cable systems have certified that they regulate pole rates. There is always the possibility that the FCC or a state could permit the increase of pole attachment rates paid by cable operators. Additionally, higher pole attachment rates apply to pole attachments that are subject to the FCC’s telecommunications services pole rates. The applicability of and method for calculating those rates for cable systems over which various phone services are transmitted remain unclear, and there is a risk that we will face significantly higher pole attachment costs as our phone business expands.

Privacy Regulation. The Communications Act generally restricts the nonconsensual collection and disclosure to third parties of subscribers’ personal information by cable operators and phone providers. Additional requirements may be imposed if and to the extent state or local authorities establish their own privacy standards. In addition, the FCC, the Federal Trade Commission and many states have adopted rules that limit the telemarketing practices of cable operators and other commercial entities.

Copyright Regulation. In exchange for filing certain reports and contributing a percentage of revenue to a federal copyright royalty pool, cable operators can obtain blanket permission to retransmit copyrighted material contained in broadcast signals. The possible modification or elimination of this copyright license is the subject of ongoing legislative and administrative review. The elimination or substantial modification of the cable compulsory license could adversely affect our ability to obtain certain programming and substantially increase our programming expenses. Further, the Copyright Office has not yet made any determinations as to how the compulsory license will apply to digital broadcast signals and services. In addition, we pay standard industry licensing fees to use music in the programs we create, including our Cable businesses’ local advertising and local origination programming, and our Programming businesses’ original programs. These licensing fees have been the source of litigation with music performance rights organizations in the past, and we cannot predict with certainty whether license fee disputes may arise in the future.

PEG/Leased Access. The Communications Act permits franchising authorities to require cable operators to set aside the use of channels for public, educational and governmental (“PEG”) access programming. Many of our cable systems provide substantial channel capacity and financial support for PEG programming. The Communications Act also requires a cable system with 36 or more channels to make available a portion of its channel capacity for commercial leased access by third parties to provide programming that may compete with services offered directly by the cable operator. To date, we have generally not been required to devote significant channel capacity to leased access. However, the FCC’s Adelphia Order will now permit programmers seeking to obtain commercial leased access carriage on our systems to submit rate and terms disputes to commercial arbitration. Further, the FCC has stated that a new rulemaking will be commenced in an effort to facilitate the use of commercial leased access by potential programmers. New FCC rules that significantly alter the rates or terms for commercial leased access could have an adverse impact on our business.

This excerpt taken from the CMCSA 10-K filed Feb 22, 2006.

Video Services

 

We compete with a number of different sources that provide news, information and entertainment programming to consumers, including:

 

    program distributors that use direct broadcast satellite, or DBS, systems that transmit satellite signals containing video programming, data and other information to receiving dishes of varying sizes located on the subscriber’s premises,

 

    incumbent local exchange carriers (“ILECs”) are building wireline fiber-optic networks to provide video services in substantial portions of their service areas (and have begun to offer this service in limited areas), in addition to marketing DBS service in certain areas,

 

    other wireline communications providers who build and operate wireline communications systems in the same communities that we serve, including those operating as franchised cable operators or under an alternative regulatory scheme known as Open Video Systems, or OVS,

 

    online services, including Internet video streaming and distribution of television shows (and portions thereof) and movies,

 

    satellite master antenna television systems, commonly known as SMATVs, that generally serve condominiums, apartment and office complexes, and residential developments,

 

    local television broadcast stations that provide free over-the-air programming which can be received using an antenna and a television set,

 

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    digital subscription services transmitted over local television broadcast stations that can be received by a special set-top box,

 

    video stores and home video products,

 

    movie theaters,

 

    newspapers, magazines and bookstores,

 

    live concerts and sporting events, and

 

    wireless and other emerging technologies in the areas of distributing and viewing video programming.

 

In recent years, Congress has enacted legislation and the FCC has adopted regulatory policies intended to provide a favorable operating environment for existing competitors and for potential new competitors to our cable systems. The FCC adopted rules favoring new investment by ILECs in fiber-optic networks capable of distributing video programming and rules allocating and auctioning spectrum for new wireless services that may compete with our video service offerings. Furthermore, Congress, the FCC and various state governments are considering measures that would reduce or eliminate local franchising requirements for new entrants into the multichannel video marketplace, including the ILECs. The State of Texas has enacted legislation to provide a statewide franchise to new entrants, thus eliminating the requirement that such entrants obtain franchises from individual local franchising authorities. In order to compete effectively, we strive to provide, at a reasonable price to subscribers, new products and services, superior technical performance and customer service, and a greater variety of video programming.

 

DBS Systems. According to recent government and industry reports, conventional, medium- and high-power satellites currently provide video programming to over 27 million subscribers in the United States. DBS providers with high-power satellites typically offer more than 300 channels of programming, including programming services substantially similar to those our cable systems provide. Two companies, DIRECTV and EchoStar, provide service to substantially all of these DBS subscribers.

 

High-power DBS service can be received throughout the continental United States through small rooftop or side-mounted outside antennas. DBS systems use video compression technology to increase channel capacity and digital technology to improve the quality and quantity of the signals transmitted to their subscribers. Our digital cable service is competitive with the programming, channel capacity and quality of signals delivered to subscribers by DBS systems.

 

Federal legislation establishes, among other things, a compulsory copyright license that permits DBS systems to retransmit local broadcast television signals to subscribers who reside in the local television station’s market. These companies are currently transmitting local broadcast signals in most markets that we serve. Additionally, federal law generally provides DBS systems with access to all cable-affiliated video programming services delivered by satellite. As a result, DBS providers are competitive with cable system operators like us because they offer programming that closely resembles what we offer. These DBS providers are attempting to expand their service offerings to include, among other things, high-speed Internet service, and have entered into marketing arrangements in which their service is promoted and sold by ILECs.

 

ILECs. ILECs, in particular AT&T and Verizon, are building fiber-optic networks to provide video services in substantial portions of their service areas (and have begun to offer this service in limited areas), in addition to entering into joint marketing arrangements with DBS providers in certain areas. The ILECs, have taken various positions on the question of whether they need a local cable television franchise to provide video services, including applying for local franchises, seeking state-level regulation only, and claiming that video services can be provided without a cable television franchise.

 

Other Wireline Providers. We operate our cable systems pursuant to non-exclusive franchises that are issued by a local community governing body, such as a city council or county board of supervisors or, in some

 

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cases, by a state regulatory agency. Federal law prohibits franchising authorities from unreasonably denying requests for additional franchises, and it permits franchising authorities to operate cable systems. Various companies, including those that traditionally have not provided cable services and have substantial financial resources (such as public utilities, including those that own some of the poles to which our cables are attached), have obtained cable franchises and provide competing communications services. These and other wireline communications systems offer video and other communications services in various areas where we hold franchises. We anticipate that facilities-based competitors will emerge in other franchise areas that we serve.

 

SMATV. Our cable systems also compete for subscribers with SMATV systems. SMATV system operators typically are not subject to regulation like local franchised cable system operators. SMATV systems offer subscribers both improved reception of local television stations and many of the cable networks offered by our cable systems. In addition, some SMATV operators are offering packages of phone, data and video services to residential and commercial developments. SMATV system operators often enter into exclusive service agreements with building owners or homeowners’ associations, although some states have enacted laws to provide cable systems access to MDUs.

 

Broadcast Subscription Services. Local television broadcasters in selected markets sell digital subscription services. These services typically contain a limited number of cable programming services at a price of approximately $20 per month. Several leading television broadcast station ownership groups have announced that they are providing funding for U.S. Digital Television, Inc., an entity that currently offers these digital subscription services in several markets as a low cost alternative to cable television service. Many other broadcasters are considering similar plans.

 

This excerpt taken from the CMCSA 10-K filed Feb 23, 2005.

Video Services

We compete with a number of different sources that provide news, information and entertainment programming to consumers, including:

    program distributors that use direct broadcast satellite, or DBS, systems that transmit satellite signals containing video programming, data and other information to receiving dishes of varying sizes located on the subscriber's premises,

    local exchange carriers, commonly known as LECs, that are marketing DBS service, and some that are building wireline fiber-optic networks and beginning to provide service in various communities across the United States,

    other wireline communications providers who build and operate wireline communications systems in the same communities that we serve, including those operating as franchised cable operators or under an alternative regulatory scheme known as Open Video Systems, or OVS,

    satellite master antenna television systems, commonly known as SMATVs, that generally serve condominiums, apartment and office complexes, and residential developments,

    local television broadcast stations that provide free over-the-air programming which can be received using an antenna and a television set,

    digital subscription services transmitted over local television broadcast stations that can be received by a special set-top box,

    interactive online computer services, including Internet video streaming and distribution of movies,

    video stores and home video products,

    movie theaters,

    newspapers, magazines and bookstores, and

    live concerts and sporting events.

In recent years, Congress has enacted legislation and the FCC has adopted regulatory policies intended to provide a favorable operating environment for existing competitors and for potential new competitors to our cable systems. The FCC recently adopted rules favoring new investment by LECs in fiber-optic networks capable of distributing video programming and rules allocating and auctioning spectrum for new wireless services that are expected to compete with our video service offerings. In order to compete effectively, we strive to provide, at a reasonable price to subscribers, new products and services, superior technical performance and customer service, and a greater variety of video programming.

 DBS Systems.    According to recent government and industry reports, conventional, medium- and high-power satellites currently provide video programming to over 24 million subscribers in the United States. DBS providers with high-power satellites typically offer to their subscribers more than 300 channels of programming, including programming services substantially similar to those our cable systems provide. Two companies, DIRECTV and EchoStar, provide service to substantially all of these DBS subscribers.

DBS service can be received throughout the continental United States through a small rooftop or side-mounted outside antenna. DBS systems use video compression technology to increase channel capacity and digital technology to improve the quality and quantity of the signals transmitted to their subscribers. Our digital cable service is competitive with the programming, channel capacity and quality of signals delivered to subscribers by DBS systems.

Federal legislation establishes, among other things, a compulsory copyright license that permits DBS systems to retransmit local broadcast television signals to subscribers who reside in the local television station's market. These companies are currently transmitting local broadcast signals in most markets that we currently serve. Additionally, federal law generally provides DBS systems with access to all cable-affiliated video programming services delivered by satellite. As a result, DBS providers are competitive with cable system operators like us because they offer programming that closely resembles what we offer. These DBS providers are attempting to expand their service offerings to include, among other things, high-speed Internet service and have entered marketing arrangements in which their service is promoted and sold by LECs, such as Verizon Communications, Inc., SBC Communications, Inc., BellSouth Corporation and Qwest Communications International, Inc.

 Local Exchange Carriers (LECs).    In addition to entering into joint marketing arrangements with DBS providers, some LECs are building fiber-optic networks capable of distributing video programming. The LECs, to date, have taken various positions on the question of whether they need a local cable television franchise to provide video services, including applying for a local franchise, seeking state-level regulation only, and claiming that video services can be provided without a cable television franchise.

 Other Wireline Providers.    We operate our cable systems pursuant to a non-exclusive franchise that is issued by the community's governing body, such as a city council, a county board of supervisors or, in some cases, by a state regulatory agency.

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Federal law prohibits franchising authorities from unreasonably denying requests for additional franchises, and it permits franchising authorities to operate cable systems. Companies that traditionally have not provided cable services and that have substantial financial resources (such as public utilities that own some of the poles to which our cables are attached) may also obtain cable franchises and may provide competing communications services. These and other wireline communications systems offer video and other communications services in various areas where we hold franchises. We anticipate that facilities-based competitors will emerge in other franchise areas that we serve.

 SMATV.    Our cable systems also compete for subscribers with SMATV systems. SMATV system operators typically are not subject to regulation like local franchised cable system operators. SMATV systems offer subscribers both improved reception of local television stations and many of the same satellite-delivered programming services offered by our cable systems. In addition, some SMATV operators are offering packages of phone, data and video services to private residential and commercial developments. SMATV system operators often enter into exclusive service agreements with building owners or homeowners' associations, although some states have enacted laws to provide cable systems access to multiple dwelling units.

 Broadcast Subscription Services.    Over the past year, local television broadcasters in selected markets have begun deployment of digital subscription services. These services typically contain a limited number of cable programming services at a price of approximately $20 per month. Recently, several leading television broadcast station ownership groups announced that they are negotiating funding for U.S. Digital Television, Inc., an entity that currently offers these digital subscription services in select markets and has announced plans to offer its service in several additional markets as a low cost alternative to cable television service. Many other broadcasters are considering similar plans.

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