Articles About Cable, DSL, And The Internet

SNL Kagan Analysis Shows Cable Penetration at 58 Percent

Monterey, Calif. (Vocus) November 30, 2007 -- In response to the recent controversy over the rate of cable TV penetration (www.snl.com) 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.

SNL Kagan U.S. Cable TV Summary Data, 2006

Occupied U.S. household snapshot &    

Occupied housing units, 109.9

+ Vacant held off market for occasional use, 1.9

+ Vacant usual residence somewhere else, 1.1

Total occupied housing units, 113.0

Total U.S. TV households (TVHH)*, 111.3

U.S. TV households as a % of occupied HH, 98.5%

Total U.S. occupied cable homes passed@, 111.9

Unique U.S. cable homes passed    

Total U.S. occupied cable homes passed@, 111.9

Minus overbuilder overlap, 3.5

Total unique occupied cable homes passed, 108.4

Cable TV basic subscribers, 65.4

Cable TV basic subs / homes passed, 58.4%

Cable TV basic subs / TV homes, 58.8%

2006 average basic subs, 65.3

Weighted average basic rate, $41.12

2006 basic video cable TV revenue, $32,274

TV households, subscribers and revenues in millions

& Data from U.S. Census Bureau.

*U.S. TV HH based on The Nielsen Co. data © 2007.

@ Includes overlap from cable overbuilders

© 2007 SNL Kagan, a division of SNL Financial LC. All rights reserved.

SNL Kagan sub data is based upon our 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 U.S. cable industry metrics. All of this information is available exclusively as part of the SNL Kagan Information Service. For more information on the SNL Kagan Information Service, call 866-296-3743 or e-mail SNLKaganSales@snl.com.

About SNL Kagan:

SNL Kagan is the ultimate resource for complete financial intelligence on the broad and dynamic media & communications sector, including the broadcasting, cable, entertainment, motion picture, telecom, wireless, satellite, publishing and new media industries. The SNL Kagan suite of products integrates breaking news, comprehensive data and expert analysis into an electronic database available online and updated around the clock. SNL Kagan combines the 38-year heritage of Kagan Research with parent company SNL Financial's 20 years of experience in providing essential guidance to Wall Street and to America's top corporations. For more information, visit www.snlkagan.com.

Contact:

Lauren Keyson

Public Relations Manager

Tel. 212.341.7319

SNL Financial * One SNL Plaza * Charlottesville, VA * 22902 * 434.977.1600

Other office locations: Ahmedabad, India; Arlington, VA; Islamabad, Pakistan; Jersey City, NJ; London, England; Monterey, CA; New York, NY.

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