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MARKET CATEGORIES AND SYSTEM LOCATION
In examining the probable effect of various provisions for
payment of copyright fees we will consider separately the
characteristics of typical cable systems in four types of markets:
the top 50 markets, markets ranked 51-100, markets below 100,
and areas located outside television markets.
The FCC rules permit
different signal carriage in each of these situations, and impose
differential requirements affecting system costs.
In addition, the
density of housing, the prevalence of underground utilities and the
level of family income also varies by market size.
summary of these major market characteristics is set forth in
As R. E. Park's econometric findings 2/ strongly demonstrate, the
location within the market is also of fundamental importance to
determining penetration levels.
For this study we therefore sub
divide each of the markets 1-50, 51-100, and 100+ into typical
"middle market" and "edge market" systems.
locations are close to off-the-air signals, while edge market
systems are approximately half-way between the transmitter and the
B-contour limit of the local signals.
(The forth category, an
"outside market" system, is necessarily at or beyond the location
of a typical edge market system.)
Thus the typical systems to be
analyzed fall into one of seven boxes in the following matrix:
2/ "Prospects for Cable in the 100 Largest Television Markets"
20 channels 2-way capability
20 channels 12 channels
12 channels 2-way capability 2-way capability -way capability
standard; minimum below 10,000 subscribers
standard; minimun standard; minimum minimum below 10,000
below 10,000 subscribers
Within each box, indicating a specific market type/system
location, we further consider the two or three most likely lineups
of available local signals.
While we have not reported every
combination which can occur, the cases tabulated are representative
of the majority of signal patterns to be encountered and they
cover a degree of variation sufficient to include most other
At the time Comanor and Mitchell's research was under
taken virtually no reliable statistical information was available
to quantify the effects on cable penetration of the number, types
and quality of local signals available, the additional cable
signals provided, the price of cable service and the incomes of
That study provided estimates of most of
these variables by use of multiple regression analysis on a randomly
selected sample of 149 systems drawn from the Television Factbook.
The authors noted that these systems were largely outside of
the top 100 markets or in areas of quite poor reception, or both.
Projection of penetration in the major markets under the then
proposed FCC rules (allowing four distant independent signals)
was recognized as subject to considerable error.
Since publication of the Comanor-Mitchell paper the measurement
of factors determining penetration has been advanced considerably
by Park in his study "Prospects for Cable in the 100 Largest
Park uses statistical techniques closely
related to those employed earlier.
He improves on the Comanor
Mitchell study in three major ways:
First, all 63 cable systems analyzed by Park had at least
three A-contour, good reception-quality signals available off
Second, all data were verified with system operators by
telephone interview, insuring greater accuracy than available
from only published sources.
Third, two improved measures of signal quality were incor
porated into the analysis. Distance of the cable system from
each transmitter was explicitly included, and UHF signals were
measured separately to account for more rapid signal attenuation
with distance and the absence of UHF tuners in some households.
The complete penetration equation as estimated by Park
measures the effects of the following variables :
....number of off-the-air VHF signals, with separate
categories for networks, duplicate networks, inde-
..... number of off-the-air UHF signals, by the same
categories; by distance from transmitter; with
.... number of cable signals, by the same categories
on the viability of cable systems in the major markets.
jecting penetration rates for the systems studied here the average
figure predicted by Park's equation has generally been used, since