In response to the recent controversy over the rate of cable TV penetration into US homes, SNL Kagan last week released an analysis showing cable penetration at 58% at yearend 2006 – well below the 70% threshold suggested by FCC Chairman Kevin Martin at his Nov. 27 meeting.
SNL Kagan data also indicates that cable penetration of homes passed peaked at 65.5% in 1998. As of yearend 2006, cable subscriptions stood at 65.4 million, or 58.4% of 111.9 million homes passed, according to the data. Due to two recent quarters of declining cable subscriptions, this figure is likely to drop further by the end of 2007, SNL Kagan said.
“The FCC chairman was trying to invoke the 70/70 regulation clause to allow him to more closely regulate cable television,” said SNL Kagan senior analyst Robin Flynn. “But he relied on just one statistic from Warren Communications that shows cable penetration at 71.4%, when the FCC had always said in the past that cable penetration was in the area of 60%. And that’s what our data shows as well.”
The controversy deepened when Commissioners Jonathan Adelstein and Robert McDowell revealed on Nov. 27 that the FCC’s own surveys, which are not completed by smaller operators, put the 2006 basic penetration of homes passed figure at 54% to 55%.
In the days leading up to the FCC meeting, Martin came under fire for using data widely considered incomplete to invoke powers under a 1984 federal law (though opposition to FCC’s involvement is not universal). The 70/70 rule states that if 70% of American homes can get cable TV with 36 channels or more and 70% also subscribe, then the FCC can take action to ensure diversity and competition.
Since Warren Communications responded to the controversy by saying its data could not be used to verify Martin’s 70/70 test finding, Martin is no longer pushing to invoke the rule, instead saying the FCC needs to gather more data directly from cable operators.
About the data: SNL Kagan subscription data is based on exclusive quarterly surveys of cable MSOs, as well as publicly reported data for major cable operators. The survey data is augmented with SNL Kagan estimates to provide a full view of US cable industry metrics.