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| Slide 1 |
Competition In The Video Marketplace
Grier C. Raclin
Department of Justice Antitrust Division
2007 Telecommunications Symposium
November 29, 2007
Introduction to Charter
The Video Marketplace is Highly Competitive
Charter and cable in general face robust competition in the video marketplace from, among other sources:
Satellite Operators (Direct TV; EchoStar) with ~30M subscribers (~33% market share) and ~$28B in combined annual revenues
Competing Cable Companies, including over-builders (e.g., RCN), municipal cable operators, and private cable operators/SMATVs – possibly growing presence in light of FCC’s MDU non-exclusivity and “Drywall” orders
Local Telcos expanding into video (e.g., NRTC’s “IP Prime”) and advantaged with Rural Loan availability
. . . . . and, of course
Each RBOC enjoys tremendous advantages in terms of having huge capitalization and revenue flows; in-place networks, systems & infrastructure (build at rate payers’ cost); and well-known brand names.
AT&T has ~20x, and VZ has ~16x, Charter’s Revenues
AT&T has 411x, and VZ has 230x, Charter’s Market Cap.
And the Future Promises More Competition
RBOCs promising dramatic growth
Power Companies soon be offering “Broadband over-Powerline” video services
IPTV offering video over the internet; including majors (CBS’ Audience Network; NBC/Fox’s Wulu; ABC’s Full Episode Player; Disney’s XD Theater) and new entrants (e.g., NetFlix; Amazon; IP Prime; Joost; Veoh)
Mobile Delivery Platforms to cell phones and PDAs, such as Google’s latest platform proposal
Neither State nor Federal Regulations Constrain New Entrants
Charter’s Commercial Responses
Competition in the video industry is longstanding and robust, with two to four competitors in each local market.
Regulatory action in the past two to three years, under the guise of removing barriers to entry, has actually put the regulatory “thumb on the scale” in favor of huge new entrants that do not require further regulatory advantages.