Cable Lost Three Points To DBS

Washington - Under pressure from the direct broadcast satellite industry, incumbent cable operators, though still dominant, lost almost three percentage points of share to pay-TV competitors, according to recent 12-month data filed
by the cable industry Thursday with federal regulators.

The National Cable & Telecommunications Association said cable incumbents served 77.1 percent of pay-TV homes in July. A year ago, the Federal Communications Commission pegged cable's share at 80 percent.

According to NCTA's data, the U.S. has 88.8 million pay-TV subscribers, with cable serving 68.5 million and DBS serving 16 million, or 18 percent of all
pay-TV households.

NCTA said 40 states can now claim at least 15 percent DBS penetration, 30 states at least 20 percent, 13 states at least 25 percent, 5 states at least 30
percent, and one state - Vermont - at least 40 percent.

'Cable and DBS, along with other video providers, are battling it out, home
by home, customer by customer,' NCTA said in comments filed for the Federal
Communications Commission's annual competition report for Congress.

NCTA said DBS competition is checking the ability of operators to raise
rates. Citing Bureau of Labor Statistics data, NCTA said that during the
15-month period ending June 30, cable rates rose 4.95 percent compared with the
national inflation rate of 3.97 percent.

Given the intense competition for pay-TV subscribers, NCTA urged the FCC to
allow certain program sale rules to expire next October. The FCC currently
requires cable operators to sell their satellite-delivered networks to DBS.

'. There is more than enough programming competing for viewership to ensure
that cable's competitors will not fail for lack of available programming,' NCTA