Kagan: Cable Nowhere Near 70% Penetration

Not that it really matters at this point, but research firm SNL Kagan has poured more cold water FCC chairman Kevin Martin’s bid to regulate cable. Kagan says that of 111.9 million homes reached by one cable TV system or another, only 65.4 million, or about 58% subscribed at the end of 2006. That’s well below the 70% threshold that would let Martin pursue his regulation bid. Cable penetration actually peaked at 65.5% in 1998, according to Kagan figures.

Release after the jump.

Related: FCC’s Martin Takes Aim At Comcast (CMCSA)
Cable Regulation: Stillborn At The FCC

SNL Kagan Analysis Shows Cable Penetration at 58%
Estimate is well below the 70% benchmark identified by FCC Chairman Kevin Martin
Monterey, Calif. (Nov. 30, 2007) – In response to the recent controversy over the rate of cable TV penetration into U.S. homes, SNL Kagan has released an analysis showing cable penetration at 58% at year-end 2006. This percentage is well below the 70% threshold suggested by FCC Chairman Kevin Martin in his Nov. 27 meeting.
SNL Kagan data also indicates cable penetration of homes passed peaked at 65.5% in 1998. As of year-end 2006, cable subscriptions stood at 65.4 million, or 58.4% of 111.9 million homes passed. Due to two recent quarters of declining cable subscriptions, this figure is likely to drop further by the end of 2007.
“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 last week’s FCC meeting, Martin came under fire for using data widely considered incomplete to invoke powers under a 1984 federal law. 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.

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