1.Private Cable Systems -
Private cable operator (PCO) systems, also known as satellite master antenna (SMATV) systems, are video distribution facilities that use closed transmission paths without using any public rights-of-way.470 PCOs acquire video programming and distribute it via terrestrial wiring in urban and suburban multiple dwelling units (MDUs), such as apartments and condominiums, as well as commercial multiple tenant units (MTUs), including hotels and office buildings. Traditionally, PCOs receive nonbroadcast programming from resellers called aggregators using satellite master antenna systems atop the buildings they serve. PCOs usually combine this nonbroadcast video programming with local broadcast television signals that they receive using master antennas. Thus, the packages PCOs provide their subscribers are comparable to those of cable systems, and they directly compete with franchised cable operators.
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PCOs continue to serve a small number of MVPD subscribers, either through their own facilities or through partnership arrangements with DBS operators, DIRECTV and EchoStar.471 PCO subscribership has declined to one million subscribers this year, a decrease of 9.1 percent from last year’s 1.1 million.472 The Independent Multi-Family Communications Council (IMCC), the trade association that represents PCOs and the MDUs they serve, indicates that it currently has more than 150 members that are PCOs.473 PCOs have received millions of dollars for the purpose of starting new PCOs in the last two years, and there has been some industry consolidation, creating larger and more stable PCOs. PCOs range in size from large operators serving customers throughout the entire United States, to small operators that serve MDUs in as few as three communities.474
2.Wireless Cable Systems -
Wireless cable systems use Broadband Radio Service (BRS) and Educational Broadband Service (EBS) in the 2 GHz band to transmit video programming and provide broadband services to residential subscribers.475 These services were originally designed for the delivery of multichannel video programming, similar to that of traditional cable systems, but over the past several years licensees have focused their operations instead on providing two-way high-speed Internet access services.476 The number of wireless cable subscribers has declined steadily from a peak of 1.2 million in 1996 to approximately 100,000 as of March 2005, down from an estimated 200,000 subscribers in April 2004.477 Thus, wireless cable systems provide video competition to incumbent cable operators only on a limited basis.
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Last year we reported that BellSouth provides video programming in the areas where it holds MMDS/BRS and ITFS/EBS licenses.478 BellSouth continues to provide video programming to limited areas in the Atlanta, New Orleans, and Louisville television markets and in parts of Florida.479 W.A.T.C.H. TV, an operator of one of the few digital wireless cable systems in the U.S., claims that a wireless cable system can compete successfully against other cable systems and DBS if it digitizes its facilities, which allows it to offer hundreds of channels of programming to its subscribers.480 W.A.T.C.H. TV reports that it has transformed its 11-channel analog video-only service to a state-of-the-art network, offering its 12,000 subscribers in the Lima, Ohio, market 200 channels of digital video and audio programming and offering high-speed Internet access to 4,800 subscribers, at a lower price than that charged by competing cable and DBS operators.481 It further states that it is the only operator in its market to provide competition to incumbent cable operators because DBS does not offer either local-into-local broadcast service or a broadband service for consumers.482
3.Commercial Mobile Radio Service -
In our 2004 Report, we noted that several cellular telephone companies were beginning to offer video services on their mobile telephones.483 Wireless companies are now spending billions of dollars to build third-generation, or 3G, networks which enable the transmission of live video to cellphones, and cellphone makers are selling video-ready telephones for as little as $99 when bought with a subscription to a video service.484 For services currently available, unlimited viewing costs $15 to $20 a month.485 Mobile telephone providers are increasingly offering video that includes content from traditional cable networks, as well as pre-recorded content from a host of other producers. Examples include live and recorded programming from the Discovery Channel, ESPN, Weather Channel, Fox News and Nickelodeon.486
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Several major cellular telephone companies are offering video services. Verizon Wireless rolled out V-Cast, a service that offers video programming to cellular telephone users, in February 2005. V-Cast provides news updates, sports highlights, celebrity news, stock market quotes, and information, weather and games for $15 a month. Its television-like video, at high bit rates, allows customers to download music videos and other high-quality content.487 Sprint Corporation began broadcasting live video over its wireless telephones in August 2004. Sprint PCS customers can now view news, video clips and other content in real time over their cellular telephones.488 MobiTV, a video service available from Sprint PCS, Cingular, and several regional carriers, also sends video programming to cellphones and currently has 300,000 subscribers.489 Qualcomm recently introduced its TV-to-cellphone technology, called MediaFLO.490 HBO and Cingular Wireless are reportedly considering a wireless content distribution arrangement.491
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