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Cable TV Maintains Dominance

December 18, 1998

WASHINGTON (AP) _ The cable industry has lost a little market share to competitors but continues to be the dominant provider of multiple TV channels to American homes.

The industry’s market share dropped 2 percentage points _ to 85 percent in June 1998 from 87 percent in June 1997, the Federal Communications Commission said Thursday, citing some findings from its annual video competition report to Congress.

The report is expected to be released before Christmas, said FCC spokesman Morgan Broman.

It will be studied closely by lawmakers who are being pressed by consumer groups to delay the March 31, 1999, deregulation of cable TV rates.

Congress decided in a 1996 telecommunications law to lift cable-rate regulations on the March date, believing that widespread competition to cable would have materialized by then. Consumer groups and even some regulators are saying it will not.

``The level of competition that consumers are seeking has not yet arrived,″ concluded FCC Chairman Bill Kennard, adding that the commission and Congress need to do more to increase competition to cable.

The direct-broadcast satellite, or DBS, industry, which includes DirecTV, Primestar and EchoStar, increased its market share to 9.4 percent in June 1998, compared with roughly 7 percent in June 1997, said Deborah Lathen, chief of the FCC’s Cable Services Bureau. Primestar is owned by big cable companies.

These direct-broadcast companies made the biggest inroads. Other multichannel TV providers such as companies that provide programming to big satellite dishes or use wireless technology to deliver multiple channels into homes accounted for a 5 percent market share, Lathen said.

Decker Anstrom, president of the National Cable Television Association, said the report shows that ``cable faces vigorous competition from DBS and other video providers.″ One of the industry’s priorities is to make sure rate deregulation goes into effect as scheduled.

But Gene Kimmelman, co-director of the Consumers Union’s Washington office, said the report ``demonstrates a failure in policy. Cable rates continue to soar and competition is growing at less than a snail’s pace.″

Cable TV rates between June 1997 and June 1998 rose 7.3 percent, compared with a 1.7 increase in inflation. But that was accompanied by increases in channels and services, the FCC said.

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