The Federal Communications Commission should investigate ownership concentration in the cable television industry, where a handful of big companies decides what a majority of subscribers will see, a government report said this week.
The report by the National Telecommunications and Information Administration also recommended that measures be taken to encourage other video sources to compete with cable and that telephone companies be permitted to transmit, but not program, video services."Cable service is increasingly relied upon by more than half of all the nation's television households as the primary source of video programming, yet these households are typically unable to choose among two or more cable providers," the report said.
"Such lack of direct competition risks undermining diversity of program choices, and denies the public benefits such as better quality service, lower prices and more choices."
Cable TV is available to about 80 percent of American homes. About half of those households, an estimated 42.7 million, subscribe to cable.
The report by NTIA, a Commerce Department agency, said concentration of ownership among the largest cable companies "has reached levels that warrant investigation, and perhaps, action by the FCC."
Tele-Communications Inc., the nation's largest cable company, owning or controlling systems with about 10 million subscribers, has seen its share of the market grow from 9.1 percent in 1983 to 23.4 percent last year. The company's share more than doubled from 1986 to 1987.
The second-biggest cable company, American Television & Communications Corp., owns or controls systems with about 4.4 million subscribers; Continental Cablevision Inc. is third, with 2.2 million subscribers; Cox Cable Communications and Storer Communications have about 1.5 million each; and Warner Cable and Comcast Cable Communications each have about 1.4 million.
The report says concentration of ownership among cable operators and increasing investment by cable companies in cable program networks may ultimately result in less diversity in programming for subscribers.
Large companies often can get discounts on programming, but they also "may have excessive leverage over program suppliers," the report said.
For example, a large multiple-system cable operators, called an MSO, that was serving several big markets could refuse to carry a particular cable network unless the network dealt with the company on its terms.
"In that situation, the MSOs (able companies) would have substantial leverage vis-a-vis the network programmer," the report said. "In extreme cases, they could dictate whether the service would succeed or fail, thus directly affecting the diversity of programming available to other cable subscribers, whether served by those MSOs or not."