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Cable sub total appears on decline in 2002

For the first time in industry history, cable subscribership may show an
annual decline -- for calendar-year 2002 -- the Federal Communications Commission
said Tuesday in its ninth annual report on video competition.

Although the report tracked industry trends for the fiscal year ended June,
the FCC felt confident in predicting a possible decline for the calendar year, as

At the end of June, cable subscribership stood at 68.8 million, up 0.4
percent from 68.5 million the year before.

Cable's sluggish performance caused the multichannel-providers category --
which also includes satellite TV; SMATV (satellite-master-antenna TV) service to apartments, condos and
offices; and wireless cable -- to lose TV-household share, reversing decades of
strong growth in pay TV penetration.

Despite a 1.8 percent increase in the number of pay TV subscribers, growth failed to
keep pace with the climb in the number of TV households. Consequently,
multichannel penetration declined 1.2 percent to 85.3 percent of TV households,
the FCC reported.

The FCC didn't address reasons for the decline, although it did say that rates rose
6.3 percent vs. a 1.1 percent rise in the Consumer Price Index.

It didn't mention the per-channel price of cable, which has historically
beaten inflation thanks to the expansion of many cable systems.

The cable news wasn't all bad: Industry revenue grew (approximately 16
percent), as did audience share and consumer expenditures on premium channels,
pay-per-view and modem service.

Direct-broadcast satellite household share grew from 16 million households to 18 million, and its
share rose to 20.3 percent.