Satellite TV makes big gains on cable


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Sep 8, 2003
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FCC: Providers win nearly one-quarter of pay marketThe Associated Press
Updated: 8:49 p.m. ET Jan. 28, 2004WASHINGTON - Satellite television providers such as DirecTV and the Dish Network that didn't exist 10 years ago now have captured almost one-quarter of all households who pay for TV, the Federal Communications Commission reported Wednesday.

The agency's 10th annual report on TV competition also found subscribers to cable and satellite services have a choice of more than 300 channels beyond the conventional network broadcasts, triple the number a decade ago.

"The vast majority of Americans enjoy more choice, more programming and more services than any time in history," the FCC said.

The FCC report provides support for Chairman Michael Powell and the other two Republicans on the five-member commission, who have been criticized by consumer advocates and lawmakers for enacting new media ownership rules allowing companies to own more TV and radio stations.

Supporters of the rules, which have been challenged in federal court, say that the increased competition from cable and satellite networks has made the old limits on ownership obsolete.

The FCC said the number of non-broadcast channels -- such as HBO, CNN and ESPN -- has grown from slightly more than 100 in 1994 to more than 330 in 2003.

Despite the increased number of channels, consumer advocates said, most viewers still get their news from the network stations and a handful of cable stations owned by the networks' parent companies, such as MSNBC (General Electric, along with software giant Microsoft), Fox News Channel (News Corp.) and CNN (Time Warner, which also owns the WB network).

"You have to look at what people actually watch to form an opinion about political issues," said Gene Kimmelman, senior director for public policy at Consumers Union, the publisher of Consumer Reports magazine. "A handful of companies control the channels consumers watch most for news and information."

The FCC report found that cable, which had a near-monopoly 10 years ago on delivering programming to households willing to pay for it, now has 75 percent of the market. Satellite services have 22 percent. Other competitors, such as telephone companies or electric utilities, have the rest of the market. About 70.5 million households subscribe to cable; 23.7 million get satellite service.

"The FCC's report reaffirms the sweeping competitive changes that have taken place in the video marketplace over the past 10 years," said Robert Sachs, president of the National Cable and Telecommunications Association.

Even with the increased competition, cable rates have continued to rise faster than inflation. Congress deregulated the cable industry in 1996; over the next seven years rates increased by 53 percent, while inflation rose 19 percent.

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