Edgar Filing: TIME WARNER CABLE INC.

Filed by Comcast Corporation

(Commission File No.: 001-32871)

Pursuant to Rule 425 of the Securities Act of 1933

and deemed filed pursuant to Rule 14a-6(b)

of the Securities Exchange Act of 1934

Subject Company: Time Warner Cable Inc.

Commission File No. for Registration Statement

on Form S-4 filed by Comcast Corporation: 333-194698

The following Response to the Federal Communication Commission’s Information & Data Request was posted by Comcast on its website:

SEPTEMBER 11, 2014 RESPONSES OF COMCAST CORPORATION TO THE

COMMISSION’S INFORMATION AND DATA REQUEST

1.	Produce, in both (i) PDF and (ii) ESRI Shapefile format, a map showing the location of each cable system owned by, operated by, managed by, or attributed to the Company.

RESPONSE:

Maps responsive to this request have been provided to the FCC as Exhibits 1.1-1.41. Exhibit 1.1 consists of one ESRI Shapefile (.SHP) file and related files containing a national map showing Comcast’s cable systems for use with electronic mapping software. Exhibits 1.2-1.40 consists of maps in PDF format of the various states in the United States, with county and Designated Market Area (“DMA”) boundaries indicated, that display the cable systems owned by, operated by, managed by, or attributed to Comcast.

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Identify, as of December 31, 2009, December 31, 2010, December 31, 2011, December 31, 2012, December 31, 2013, and June 30, 2014, each cable system owned by, operated by, managed by, or attributed to the Company, and for each cable system identify the nature of the Company’s interests, and state and identify the following:

the Community Unit Identifiers (CUID);

the Physical System Identifiers (PSID);

the name and number of the DMA served by the cable system;

the census blocks served by the cable system;

the zip codes served by the cable system;

the internal Company names and codes that apply to the cable system;

the facilities-based competing providers of Internet access service and MVPD service (excluding private cable and wireless cable operators), separately identified by service and provider, and the distribution technology used by the competing provider (e.g., wireless, fiber optic cable, hybrid fiber optic cable, or satellite) for each zip code served;

any internal estimates of the percentage of homes passed that are overbuilt by any facilities-based competing provider of MVPD service and Internet access service separately for each such competing provider;

the total capacity and the total unused capacity of each of the Company’s cable systems by (i) MHz and the spectrum allocated to each cable service and any other service, and (ii) the number of non-broadcast programming networks; and

the headends serving each cable system and the number of cable services subscribers served by each headend.

RESPONSE:

Comcast is providing data for each cable system owned by, operated by, managed by, or attributed to the Company.

2(a):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 2.1.

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Exhibits 2.1(a)-(f) provide the Community Unit Identifier (CUID) and CUID name for each cable system owned or operated by Comcast, for December 31, 2009; December 31, 2010; December 31, 2011; December 31, 2012; December 31, 2013; and June 30, 2014. In addition, for each cable system and each of the aforementioned dates, Exhibits 2.1(a)-(f) provide the division, region, and sub-region, as well as the cable system name, and cable system code.

2(b):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 2.2.

Exhibits 2.2(a)-(f) provide the Physical System Identifiers (PSID) for each cable system owned or operated by Comcast, for December 31, 2009; December 31, 2010; December 31, 2011; December 31, 2012; December 31, 2013; and June 30, 2014. In addition, for each cable system and each of the aforementioned dates, Exhibits 2.1(a)-(f) provide the division, region, and sub-region, as well as the cable system name, headend name, and cable system code.

2(c):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 2.3.

Exhibits 2.3(a)-(e) provide the DMA name and DMA number for each cable system owned or operated by Comcast, for December 21, 2010; December 21, 2011; December 21, 2012; December 21, 2013; and June 21, 2014. Since monthly reporting at Comcast takes place on the 21st of each month, data responsive to this request are provided as of the 21st rather than as of the 30th or 31st of each requested month. DMA data are not available for 2009 and 2010. In lieu of December 2010 data, DMA data are provided for January 2011.

2(d):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 2.4.

Exhibit 2.4(a)-(f) provide the census block numbers for each cable system owned or operated by Comcast, for December 31, 2010; December 31, 2011; December 31, 2012; December 31, 2013; and June 30, 2014.

2(e):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 2.5. Since monthly reporting at Comcast takes place on the 21st of each month, data responsive to this request are provided as of the 21st

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rather than as of the 30th or 31st of each requested month. Zip code data are not available for 2009 and 2010. In lieu of December 2010 data, zip code data are provided for January 2011.

Exhibit 2.5(a)-(e) provide the zip codes owned or operated by Comcast, for January 21, 2011; December 21, 2011; December 21, 2012; December 21, 2013; and June 21, 2014.

2(f):

In response to this subpart, Comcast refers to Exhibits 2.1(a)-(f).

Exhibit 2.1(a)-(f) provide the name (“Cable System”) and code (“Cable System GL”) for each cable system owned or operated by Comcast, for December 31, 2009; December 31, 2010; December 31, 2011; December 31, 2012; December 31, 2013; and June 30, 2014.

2(g):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibits 2.6 through 2.10.

All data reflected in Exhibits 2.6 and 2.7 have been provided by Centris, a third-party analytics firm. The data includes lists of MVPDs and Internet service providers for each zip code in which Comcast operates. By submitting these data, Comcast does not represent that all providers, or any particular provider, offers services that compete with Comcast. It also does not represent that there are not other competitors in particular zip codes. Each year provided in Exhibit 2.6 and 2.7 contains a zero or a one denoting whether a provider is present (as indicated by a one) or absent (as indicated by a zero) for that month in a particular zip code.1

Exhibit 2.6 provides a list of MVPDs for each zip code in which Comcast operates from January 2010 to the present using data from TV Guide/Rovi. The data could not be provided prior to January 2010 and so January 2010 data is provided in lieu of the year-end 2009 figure. The list of MVPDs is illustrative and may be over- or under-inclusive with respect to any particular zip code and any particular provider, and is not broken out between residential and commercial video providers. Moreover, the fact that a provider is listed in the same zip code as Comcast does not necessarily mean that it overlaps with Comcast’s footprint in that zip code or that it competes with Comcast.

Providers are identified by a unique ID and name and provider technology where possible, which either originated in the TV Guide data or was provided based on National

1 There are zip codes identified in each exhibit for which Comcast and Centris were not able to list other providers either because of a lack of information from the data sources or difficulties in translating census blocks to zip codes. These zip codes represented fewer than 1% of Comcast subscribers.

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Telecommunications & Information Administration (“NTIA”) data for those providers also offering Internet services.2

Exhibit 2.7 provides a list of wired Internet service providers for each zip code in which Comcast operates from 2009 to the present. The data are derived from voluntary, semi-annual reporting to the NTIA on serviceable census blocks. The NTIA asks providers to identify the census blocks in which they have serviceable households, but the fact that a provider services some households within a census block does not mean that providers can provide services to all households in a census block, or all households in the zip code(s) in which each census block falls.3 Moreover, the fact that a provider is listed in the same zip code as Comcast does not necessarily mean that it overlaps with Comcast’s footprint in that zip code or that it competes with Comcast. Finally, the data made available by NTIA do not distinguish between types of customers served, and thus the providers listed in Exhibit 2.7 include, and do not distinguish between, residential and commercial Internet service providers.

In addition to the providers listed in Exhibit 2.7, Comcast also notes that mobile wireless telecommunications providers, including Verizon Wireless, AT&T Wireless, Sprint, and T-Mobile, provide high-speed Internet access services to residential and commercial customers that are available throughout the United States (and certainly within all, or nearly all, of Comcast’s footprint) and are capable of achieving downstream and upstream speeds that qualify as broadband speeds according to the Commission.

2(h):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibits 2.8, 2.9, and 2.10. These exhibits represent internal estimates of the percentage or share of homes passed overbuilt by fiber Internet and video providers.

Exhibit 2.8 provides estimates of Comcast homes passed overbuilt by AT&T U-verse or Verizon FiOS data services as of the second quarter of 2014. These figures do not include estimates for the number or percentage of homes that are TV serviceable. Exhibits 2.9 and 2.10 provide the Company’s internal historical estimates of overbuild from providers offering a package of voice, video, and Internet services in Comcast’s footprint and estimates of fiber overbuild from various providers. 4

2 In the list of video providers, there are additional fields provided to indicate those Comcast zip codes in which it is believed that AT&T U-verse Internet or Verizon FiOS Internet is available, which represents the maximum potential availability for AT&T U-verse TV service and Verizon FiOS TV service.

3 In the relatively few instances in which a census block overlaps two separate zip codes, the census block and providers were attributed to the zip code in which the majority of the census block falls.

4 The Comcast homes passed figures are sourced from COMET, a marketing database that provides a current snapshot of serviceable addresses from the billing systems.

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2(i):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 2.11 and in narrative Word format as Exhibit 2.12. While Comcast is able to provide the details of the current spectrum allocation for its cable systems, historical spectrum allocation data is not available. In lieu of historical spectrum allocation data, Comcast is providing a narrative description of the history of spectrum allocations.

Exhibit 2.11 provides the current total capacity of each of Comcast’s cable systems (as of June 30, 2014), expressed in MHz and in EIA Channel Count. It also provides the allocation of the spectrum over broadcast services, non-broadcast services, and other services (DOCSIS, VOD, and non-programming services).

Exhibit 2.12 provides a narrative description of the changes in capacity and spectrum allocation of Comcast’s cable systems over time.

2(j):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 2.13. Since monthly reporting at Comcast takes place on the 21st of each month, data responsive to this request are provided as of the 21st rather than as of the 30th or 31st of each requested month.

Exhibit 2.13(a) provides the headends serving each cable system, as well as the number of video, HSD, and voice subscribers for each headend, for December 21, 2010; December 21, 2011; December 21, 2012; December 21, 2013; and June 21, 2014. Exhibit 2.13(b) provides the same categories of data for December 21, 2009.

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For each zip code identified in response to Request 2(e), and from January 1, 2009, to the present, describe each of the Company’s bundled services plans and standalone services plans offered through any sales channel, and for each plan, describe the (i) MVPD service, including each service tier or programming package offered and the channels (both standard definition and high definition) on each tier or package; (ii) Internet access service, including each tier or package offered and the upload and download speed associated with each such tier or programming package, explaining how the upload speed is calculated if no advertised speed is available; and (iii) telephone services.

RESPONSE:

Comcast will produce predominant rate cards that list each available Comcast service for Comcast’s sub-regions to the FCC in response to this request. {{ }} rate cards will be provided for each year from 2009 through 2014.

[[ ]]. Comcast will also produce a table listing the document identification numbers for the rate cards corresponding to each sub-region.

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4.	For each zip code identified in Request 2(e) and for the Company as a whole, separately for residential subscribers and other subscribers, and for each month for the period beginning January, 2009, to the present, state and produce in CSV or Excel format:

the number of customer locations to which cable services are available, separately for residential customer locations and other customer locations, and the penetration rate;

the number of standalone services and bundled services subscribers as of the last day of the month;

the average revenue per subscriber in the month for standalone services and bundled services;

the number of subscribers who first began subscribing to any of the Company’s standalone services and bundled services in the specified month who were not subscribers to any of the Company’s cable services in the prior month;

the average revenue per new subscriber described in subpart (d) to standalone services and bundled services, and that churned from a competing provider, separately for each competing provider;

the number of subscribers discontinuing all subscriptions to the Company’s cable services;

the average revenue per departing subscriber described in subpart (f) for standalone services and bundled services, and the number of subscribers that churned to competing provider, separately for each competing provider;

the number of the Company’s current subscribers who first began subscribing to any of the Company’s other standalone services or bundled services in the specified month;

the number of subscribers discontinuing their subscription to one or more of the Company’s standalone services or bundled services, but who remain a subscriber to one or more of the Company’s cable services at the end of the specified month;

the churn rate for standalone services and bundled services;

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the per-subscriber acquisition cost or cost per gross addition for standalone services and bundled services and an explanation of how these values were calculated;

the cost per subscriber to the Company’s MVPD service of acquiring video programming distribution rights and an explanation of how these values were calculated;

the cost per subscriber to the Company’s MVPD service of acquiring VOD and PPV distribution rights and an explanation of how these values were calculated;

the average gross and net advertising revenue per subscriber to the Company’s MVPD service and an explanation of how these values were calculated;

other variable costs per subscriber for standalone services and bundled services and an explanation of how these values were calculated; and

the value of each additional subscriber to the Company for standalone services and bundled services and an explanation of how these values were calculated.

RESPONSE:

Information and data responsive to Request 4 have been provided for residential and commercial subscribers. Comcast does not have customers within a third category of “other customers.”

As discussed with the FCC, Comcast is providing data for subparts (a) through (j) at a zip code5 level from January 2011 to the present. [[ ]]6 The data for each subpart are provided in separate exhibits for primary subscribers and bulk subscribers. A subset of Comcast’s subscribers are bulk billed accounts, that is, customers who reside in properties that are billed under bulk contracts, rather than individually.7 The zip code

5 Data is provided by five-digit U.S.P.S. zip codes.

6 [[ ]]. Therefore, the first month for which data is provided for connecting and disconnecting subscribers and churn is February 2011, as these metrics require the prior month’s figures to provide such data.

7 Beginning in 2014, Comcast revised its methodology for counting and reporting on bulk billed customers. For bulk billed properties whose residents have the ability to receive additional cable services, such as additional programming choices or high-definition (“HD”) or DVR services, Comcast now counts and reports customers in these types of properties based on the number of contracted units. For bulk billed properties whose residents are not able to receive additional cable services, the property is now counted as a single customer. Previously, Comcast had counted and reported these customers on an equivalent billing unit basis by dividing monthly revenue received under a bulk contract by the standard monthly residential rate where the property was located (the equivalent bulk unit or “EBU method”). The billable customers method is consistent with the methodology used by other companies in the cable industry, including Time Warner Cable, to count and report customers.

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data from 2011 to the present exclude customers that have any courtesy products.8 Bulk accounts that are the master account holders may have substantial monthly recurring charges (in the thousands of dollars per month) while bulk subservient accounts will have a low monthly recurring charge because the master account pays some or all of the service charges. Therefore, the bulk accounts were broken out separately so as not to affect the monthly recurring charge calculations. Nevertheless, primary and bulk accounts represent total subscriber accounts, less courtesy accounts.

For 2009 to the present, Comcast has provided the data it maintained on standalone and bundled service subscribers at a sub-region level in response to subpart (b) of this Request, which is the number of ending subscribers by product mix. The data were not maintained or provided separately for residential and commercial subscribers for this period. Further, Comcast does not maintain historical data on activity (connects, disconnects, and churn) for standalone and bundled service subscribers at any level prior to 2011.

4(a):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.1(a) and Exhibit 4.1(b). The number of homes passed by product and by customer type is provided in Exhibit 4.1(a) for each of Comcast’s sub-regions, which is the manner in which Comcast maintains homes passed data historically. As discussed with the FCC, Comcast does not maintain the number of homes passed at a zip code level historically. However, Comcast has prepared an estimate of homes passed by zip code as of June 2014, which has been provided in machine-readable Excel spreadsheet format as Exhibit 4.1(b). [[ ]]

Finally, “percent penetration” in Exhibit 4.1(a) has been calculated by dividing the number of continuing Comcast subscribers of each requested service or bundle in each sub-region by the number of households to which that service is available in that sub-region.

4(b):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet or CSV format as Exhibit 4.2(a) through Exhibit 4.2(d), which provide the number of continuing Comcast subscribers – separately for primary and bulk subscribers – for each standalone and bundled service by zip code from 2011 to the present. In addition, in Exhibit 4.2(e), Comcast provides the number of standalone and bundled subscribers at a sub-region level from 2009 to the present. These data, which are the only historical data the Company maintains for customers by product mix (i.e., standalone and bundled services), are not available separately for residential and commercial subscribers.

8 [[ ]].

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4(c):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.3(a) through Exhibit 4.3(d), which provide the average monthly recurring charge for continuing subscribers for each standalone and bundled service by zip code from 2011 to the present.

As discussed with the FCC, [[ ]]

In addition, Exhibits 4.3(e)-(f) provide the average revenue per user (“ARPU”) by product for residential and commercial subscribers for each of Comcast’s sub-regions from January 2009 to the present. This is the most granular level at which Comcast maintains ARPU figures, and it maintains these figures by product and not by product mix (i.e., standalone and bundled services).

4(d):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.4(a) and Exhibit 4.4(b), which provide the number of new connecting subscribers – separately for primary and bulk subscribers – for each standalone and bundled service by zip code from 2011 to the present.

4(e):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.5(a) and Exhibit 4.5(b), which provide the average MRC for new connecting subscribers – separately for primary and bulk subscribers – for each standalone and bundled service by zip code from 2011 to the present. As discussed with the FCC, Comcast does not maintain data in the ordinary course as to which provider a new customer churned from.

4(f):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.6(a) and Exhibit 4.6(b), which provide the number of subscribers discontinuing all subscriptions to the Company’s cable services separately for primary and bulk subscribers. The data are provided for each standalone or bundled service from which the customer disconnected by zip code from 2011 to the present.

4(g):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.7(a) and Exhibit 4.7(b), which provide the average MRC for subscribers that discontinued services altogether – separately for primary and bulk subscribers – for each standalone and bundled service by zip code from 2011 to the

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present. The data are provided for each standalone or bundled service from which the customer disconnected. As discussed with the FCC, [[ ]].9

4(h):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.8(a) and Exhibit 4.8(b), which provide the number of existing subscribers that upgraded by adding one or more new services – separately for primary and bulk subscribers – by zip code from 2011 to the present. The data are provided for the bundle of services to which the subscriber upgraded in that month.

4(i):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.9(a) and Exhibit 4.9(b), which provide the number of existing subscribers that downgraded by removing one or more services but remaining a customer of the Company – separately for primary and bulk subscribers – by zip code from 2011 to the present. The data are provided for the bundle of services from which the subscriber downgraded – i.e., if a customer subscribed to a video and voice bundle the previous month and disconnected either service, they will appear in the data as a downgrade from the video and voice bundle.

4(j):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.10(a) and Exhibit 4.10(b), which provide the churn rate – separately for primary and bulk subscribers – for each standalone and bundled service from which the customer disconnected altogether by zip code from 2011 to the present. The rate of “churn” has been calculated by dividing the number of subscribers that disconnected all services in a given month by the total number of subscribers of that standalone service or bundle of services at the beginning of the same month.

4(k):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.11(a) (residential) and Exhibit 4.11(b) (commercial). The data provided are the cost per new connect (“CPC”), which is the amount Comcast spends in advertising, marketing, and related sales efforts for each new connect. The data are tracked and provided per connected unit (e.g., video, Internet, or voice service). Thus, a new customer that signs up for two services (e.g., video and Internet services) would have approximately twice the cost per connect provided in Exhibits 4.11(a) and (b). Sales, marketing, and advertising expenditures are not tracked or allocated by product or service. Cost per connect is calculated by dividing the total

9 {{ }} Presentations reflecting those surveys will be provided to the Commission as part of Comcast’s reply to the petitions to deny.

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amount that Comcast spends in advertising, marketing, and related sales efforts to acquire a new connect by total connects, which is the sum of services added for each new subscriber (i.e., new “connect”) and each subscriber who upgrades to a new or different service (i.e., “upgrade”). [[ ]]

The data are provided for each of Comcast’s regions, which is the most granular level at which Comcast maintains the data. The data are provided for residential cost per connect from January 2011 to the present and for commercial cost per connect from January 2010 to the present. Comcast does not maintain data on cost per connect prior to those periods.

4(l):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.12. These data contain total video programming cost per subscriber for each of Comcast’s sub-regions, which is the most granular level at which Comcast maintains the data. In addition to the total video programming costs per subscriber, the data are provided for the following video tiers: B1 (Basic), B2 (Digital Starter or Expanded Basic), D1 (Digital Preferred), and Economy (Digital Economy). The total video cost per subscriber is the total cost of video programming divided by the average number of video subscribers during that month. The data are provided for residential and commercial subscribers combined; programming packages and rates generally do not vary for residential and commercial subscribers.

[[ ]] These costs are generally additive as one moves up to a broader tier of service, i.e., the total cost for subscribers to Comcast’s B2 service is the sum of the costs of the B1 tier and the B2 tier. [[ ]]

4(m):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.13. These data provide the expenses Comcast incurred monthly from January 2009 to the present at a sub-region level for transactional video on demand (“TVOD”), subscription video on demand (“SVOD”), and pay-per-view (“PPV”), which is the most granular level at which Comcast maintains the data. The expenses incurred for SVOD reflect payments Comcast makes for standalone SVOD offerings; they do not include any allocation of licensing fees Comcast pays to distribute the linear feed of a programming network that also contains a VOD component. Those fees, which typically cover VOD rights, are reflected in the video programming expenses set forth in response to subpart (l) of this Request and provided in Exhibit 4.12.

4(n):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 4.14. These data provide the net and gross advertising revenue for each DMA in which Comcast offers cable services, [[ ]].

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4(o):

See Appendix.

4(p):

As discussed with the FCC, [[ ]] {{ }}

[[ ]] Comcast designates these materials as its response to subpart (p) of this request.

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5.	Separately for (i) every zip code identified in 2(e), and (ii) every DMA for where the Company provides MVPD service, and separately for every subscription VOD service offered by the Company, for every month from January, 2009, to the present, state:

the number of subscribers to the service at the end of the month;

the number of subscribers that added the service;

the number of subscribers that added the service at the same time that they added MVPD service from the Company;

the number of subscribers that cancelled the service;

the number of subscribers that cancelled the service at the same time that they cancelled MVPD service from the Company;

the total subscription revenues;

the total cost of video programming distribution rights;

the total number of hours viewed; and

the price of the service and a description of all discounts or promotions that were in effect.

RESPONSE:

As discussed with the FCC, Comcast is providing information and data responsive to this Request for its Streampix service, which it launched in February 2012. Streampix is available to Comcast customers for a la carte purchase, as well as being an included feature in connection with Comcast’s MVPD and/or Internet service.

Comcast licenses programming networks in which such licenses include the right to distribute on demand content for that network. Comcast does not regard this on demand content as a distinct SVOD service. Comcast does offer SVOD services such as Disney Family Movies, Bollywood, and the Jewish Channel. Such services have a relatively small number of subscribers and the revenue and expenses attributed to those services are set forth as a portion of the SVOD expenses reflected in Exhibit 4.13 (SVOD expenses) and as a portion of the SVOD revenue reflected in Exhibit 6.6 (VOD/PPV revenue).

Where Comcast is able to provide data for each DMA in which it operates in response to this Request, it has done so.

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5(a):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 5.1, which provide the ending number of Streampix subscribers by zip code from December 2011 to the present.10

5(b):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 5.2, which provide the number of new Streampix subscribers by zip code from December 2011 to the present.

5(c):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 5.3, which provide the number of new Streampix subscribers that also added MVPD service at the same time by zip code from December 2011 to the present.

5(d):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 5.4, which provide the number of Streampix subscribers that cancelled the service by zip code from December 2011 to the present.

5(e):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 5.5, which provide the number of Streampix subscribers that canceled the service at the same time they cancelled their MVPD service by zip code from December 2011 to the present.

5(f):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 5.6, which provide the revenue attributed to Streampix for each of Comcast’s sub-regions from January 2012 to the present. [[ ]]

5(g):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 5.7, which provide the programming expenses for the Streampix service by month from January 2012 to present.

10 While Comcast launched the Streampix service in February 2012, it had a small number of trial accounts beginning in December 2011.

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5(h):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibits 5.8(a) and 5.8(b), which provide the total number of video starts and the total number of hours viewed on the Streampix service by zip code and by DMA from September 2013 to the present, which is as far back as Comcast maintains data at the level requested.

5(i):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 5.9. Comcast offered three different promotions over the life of Streampix, but discontinued all such promotions in the fourth quarter of 2013: (1) a 3-month promotion ($0 for 3 months rolling to $4.99); (2) a 1-month promotion ($0 for 1 month rolling to $4.99) limited to online sales channels; and (3) a 24-month promotion ($0 for 24 months rolling to $4.99) offered with new subscriptions to certain double play service bundles (video and Internet). Currently, Comcast offers the Streampix service on an a la carte basis at $4.99/month. Subscribers to certain video and Internet tiers also receive the Streampix service as part of their package of services. Exhibit 5.9 provides the number of subscribers who receive the Streampix service on any of the above bases (promotional, a la carte, or as part of a service plan) for each of Comcast’s regions.

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6.	Separately for (i) every zip code identified in 2(e), and (ii) every DMA for where the Company provides MVPD service, for every month from January, 2009, to the present, state:

separately for the Company’s paid VOD service and PPV service, (1) the number of subscribers that used the service at least once; (2) the total revenues from subscribers; (3) the total cost of video programming distribution rights; and (4) the total number of hours viewed;

for free VOD service, (1) the number of subscribers that used the service at least once; (2) the total number of hours viewed; and (3) the total cost of video programming distribution rights; and

for the Company’s over-the-top video services (e.g., “TV everywhere), (1) the percentage of the Company’s MVPD subscribers that view video programming via the service, (2) the total number of hours viewed, and (3) the total cost of video programming distribution rights.

RESPONSE:

6(a):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 6.1 through Exhibit 6.6. Exhibit 6.1 provides the total number of PPV users, the number of PPV transactions, and PPV revenue by zip code from October 2012 to the present, which is as far back as Comcast maintains these data. Data is provided for those zip codes in which there was at least one PPV transaction recorded in that month. With respect to subpart (a)(3), Comcast incorporates by reference Exhibit 4.12, which provides PPV and transactional (i.e., paid) VOD expenses by sub-region, [[ ]]. In addition, Exhibit 6.2 provides the per user cost to Comcast for PPV and VOD programming categories. The information and data contained in Exhibit 6.2 are provided on a national basis [[ ]]. In addition, the information and data contained in Exhibit 6.2 are provided on the basis of a programming category. [[ ]]

With respect to transactional (i.e., paid) VOD, Exhibit 6.3 provides the number of paid users, paid views, and paid revenue by zip code from May 2013 to the present, which is as far back as Comcast maintain these data.11 In addition, Exhibit 6.4 reflects data on VOD usage [[ ]].

11 TVOD data include programming provided on an electronic sell-through (“EST”) basis. With an EST purchase, a customer owns a programming asset (i.e., the ability to view a program) and Comcast stores it for them.

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Exhibit 6.5 provides (a) the TV Markets associated with each of Comcast’s regions, and (b) the zip codes associated with each TV Market. Comcast cannot confirm that the mapping from zip code to TV Market is entirely precise but believes it is generally accurate. Finally, Exhibit 6.6 provides combined revenue data for VOD and PPV for each of Comcast’s sub-regions. [[ ]]

6(b):

Information and data responsive to this subpart are provided in Exhibit 6.3 and Exhibit 6.4 discussed above in response to subpart (a). Exhibit 6.3 provides the total number of free VOD users and free VOD views by zip code from May 2013 to the present, which is as far back as Comcast maintains these data. Exhibit 6.3 also provides the total number of VOD hours, which reflects hours for all types of VOD, including free and transactional VOD. Exhibit 6.4, described herein, also provides free VOD usage from January 2010 to the present [[ ]]. As set forth in its response to subpart (m) of Request 4, [[ ]]; such programming is typically part of the license fee Comcast pays video programming networks for their linear and on demand programming and those expenses are reflected in the figures provided in Exhibit 4.12.

6(c):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 6.7, which provides the percentage of Comcast’s video customers that used Comcast’s over-the-top (i.e., TV Everywhere) video service – broken out separately for use through Xfinitytv.com or related Comcast websites and for use through Comcast’s mobile device applications (“apps”) – by zip code back to January 2013. Comcast is unable to provide the average number of hours viewed per subscriber, and it did not maintain data in a way that would allow it to provide usage statistics prior to 2013.

The percentage of the company’s subscribers that view programming via the company’s over-the-top video service variously known as XfinityTV.com, Xfinity TV Go, and TV Everywhere was calculated by dividing the number of video starts initiated by an account within the period by the number of video subscribers within each zip code, as a video subscription is generally required to use the company’s over-the-top video service through the website or through the apps. A video start is triggered upon the successful initiation of linear streaming or VOD content playback within the web or app player without regard to the duration of the playback.

While these data provide a reasonable estimate of usage, there are a number of limitations to these data. Usage activity is collected throughout the month while the subscriber totals are captured at month end. For example, a subscriber who started a video during the month may have disconnected video services prior to the end of the month; their usage would be captured in the numerator, but they would not be reflected as a subscriber in the

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denominator. Therefore, the numerator may contain activity from accounts that are not active subscriber accounts included in the denominator. [[ ]]

Comcast does not maintain data on the cost of video programming distribution rights for its over-the-top (i.e., TV Everywhere) video offerings. [[ ]] and those expenses are reflected in the figures provided in Exhibit 4.12.

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7.	For each month, from January, 2014, to the present, separately for subscribers to the Company’s standalone services and bundled services, and by month of tenure on the subscriber’s current plan, state and produce in CSV or Excel format:

the number of subscribers as of the first day of the month;

the average revenue per subscriber;

the total number of disconnects from the service plan initiated either by the subscriber or the Company in the month;

the number disconnects from the service plan initiated by the Company for non-payment or other reasons in the month;

the number of mover disconnects from the service plan initiated by the subscriber in the month; and

the number of other disconnects from the service plan initiated by the subscriber in the month.

RESPONSE:

Information and data responsive to this Request have been provided in machine-readable CSV format as Exhibit 7.1 and Exhibit 7.2, which provide the requested data separately for primary subscribers and bulk subscribers. The figures are provided as of Comcast’s fiscal month-end, which is the 21st day of the month.12 As in Request 4, Comcast provides monthly recurring charge (“MRC”) in response to subpart (b) for average revenue per subscriber. All of the same qualifications regarding MRC detailed above apply equally here. As discussed with the FCC, [[ ]]. As such, Comcast has provided the data requested on beginning subscribers and disconnects by the tenure of the customer with Comcast (i.e., account history). Disconnects are broken out into four categories: (1) total disconnects, (2) non-payment disconnects, (3) voluntary disconnects, and (4) moving disconnects.

12 Comcast has provided data for service plans, which are defined as a product or set of products broken out by service tier, and is consistent with how it has responded to a request involving service plans in Request 89.

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8.	As of December 31, 2013, and June 30, 2014, and for each DMA, state and produce in CSV or Excel format:

the number of subscribers to the Company’s MVPD service;

the number of the Company’s subscribers who will become subscribers of Comcast’s, SpinCo’s, and Charter’s MVPD service, stated as if the proposed TWC transaction and the proposed divestiture transactions had been consummated as of June 30, 2014;

the number of TV households, citing the source of this information and explaining how this number was calculated;

the number of Hispanic TV households, citing the source of this information and explaining how this number was calculated;

the number of Hispanic households that subscribe to MVPD service, citing the source of this information and explaining how this number was calculated;

the number of Hispanic households that subscribe to the Company’s MVPD service; and

the number of the Company’s Hispanic households who will become subscribers of Comcast’s, Charter’s and SpinCo’s MVPD service, stated as if the proposed TWC transaction and the proposed divestiture transactions had been consummated as of June 30, 2014.

In the event that as a result of the proposed divestiture transactions, the assets, Hispanic households and the Hispanic subscribers in a single DMA will be divided between Comcast, Charter and SpinCo, for subparts (b) and (g), allocate the subscribers and Hispanic households to the receiving applicant, and provide an explanation of the methodology used to make the allocation.

RESPONSE:

8(a):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 8.1. The data are provided on a units cabled basis.

8(b):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 8.2. The data are provided on a units cabled basis

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and are provided separately for the Comcast and SpinCo systems following consummation of the proposed transactions. As discussed with the FCC, the subscriber numbers provided for post-transaction Comcast are for Comcast’s systems only, and do not include subscribers from Charter and Time Warner Cable systems that Comcast will acquire in connection with the proposed transactions.

8(c)-(g):

Information and data responsive to subparts (c) through (g) of this Request have been provided in machine-readable Excel spreadsheet format as Exhibit 8.3. Figures provided for the number of TV households, Hispanic TV households, and Hispanic MVPD subscribers are based on data provided by Nielsen. [[ ]] Comcast has also provided an estimate of its Hispanic MVPD subscribers as of December 2013 and June 2014. As discussed with the FCC, the subscriber numbers provided for post-transaction Comcast do not include subscribers from Charter and Time Warner Cable systems that Comcast will acquire in connection with the proposed transactions.

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Produce all documents relating to the effects of geographic rationalization or clustering with respect to the operation of cable systems and the provision of programming or other services on such cable systems, including documents relating to geographic rationalization or clustering as a result of the proposed TWC transaction and the proposed divestiture transactions.

RESPONSE:

Documents responsive to this request will be produced to the FCC.

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10.	Produce all documents relating to competition in the provision of each relevant service in each relevant area, including, but not limited to, consumer surveys or studies, market studies, forecasts and surveys, and all other documents relating to:

sales, market share or competitive position of the Company or any of its competitors;

the relative strength or weakness of persons selling each relevant service, selling either standalone services or bundled services, and the extent to which providers of each relevant service compete with each other;

supply and demand conditions;

how consumers, MVPDs, and OVDs view or perceive video programming offered by the Company (including the impact of placing programming in a particular neighborhood or tier), the impact of not offering certain programming, the ability to substitute other programming, the impact of bundling more than one programming channel, or the impact of pricing on decisions to purchase video programming or MVPD service, including ratings and consumer surveys relating to video programming offered by the Company;

allegations that any person that provides any relevant service is not behaving in a competitive manner, including, but not limited to, customer and competitor complaints, threatened, pending, or completed lawsuits; and federal and state investigations, including any carriage or program access complaints filed against the Company with the Federal Communications Commission pursuant to 47 C.F.R. § 76.1301 et seq. or 47 C.F.R. § 76.1000 et seq., or to the Comcast-NBCU Order at App. A, § IV.G.1.a since January 1, 2009;

any actual or potential effect on the supply, demand, cost, or price of any relevant service as a result of competition from any other possible substitute service or provider, and the role of reputation and reliability in competition with other persons who supply any relevant service;

churn, subscriber acquisition costs, costs per gross addition, and subscriber retention costs, including consumer costs incurred in switching to another person’s relevant service, and data and studies analyzing the source of the Company’s new subscribers, why subscribers disconnect service with the Company and the reasons for disconnections, and factors affecting consumers’ decisions to switch to or from a relevant service offered by the Company, including but not limited to pricing, quality of service and disputes between the Company and edge providers, CDNs or transit service providers;

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(1) consumer satisfaction with the Company’s relevant services (including all documents relating to plans, policies and procedures for addressing concerns raised by rankings and surveys), and (2) consumer substitution between the Company’s Internet access service and DSL service, service using fiber to the node technology, service using fiber to the premises technology, and mobile wireless broadband services;

the Company’s experience or success in obtaining or retaining customers through marketing or promotions targeted at providers of relevant services, geographic areas, types of customers, and ethnic groups such as Hispanics or Asians, including the offers made and the amount spent on the marketing effort, the number of new subscribers gained, churn rates for such subscribers, and revenue realized by the Company;

the characteristics of consumers who want to purchase standalone services or bundled services, and the sales, market share or competitive position of the Company or any of its competitors in the sale of standalone services or bundled services;

the provision of video programming over the Internet, including, the sales, market share, or competitive position of the Company or its competitors, the relative strength or weakness of companies, including the Company and its competitors, that are currently providing or are planning to engage in online video distribution;

any advantage or disadvantage to any person arising from the size of its footprint or its subscribership on its ability: (1) to negotiate terms with persons selling or licensing video programming, including but not limited to terms that grant the Company exclusive rights to programming; (2) to negotiate terms of interconnection agreements with edge providers, persons who provide Internet backbone services, persons who provide Internet access service, and transit service providers; and (3) competition with other providers of MVPD service and persons that provide Internet access service;

the Company’s decisions whether to block, stop, throttle, slow, favor, congest or otherwise hinder the transmission of any OVD service or other content, including the CDN, transit service provider or peer that supports the OVD service or to favor, prioritize or otherwise advantage the Company’s relevant service over such competing service;

the role of innovations in competition or potential competition relating to improvements and innovations in features, functionality, platforms, performance, cost or other advantages to users of the service;

the impact of cord shavers, cord cutters and cord nevers on the Company’s marketing, revenues and profits of each relevant service; and

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the Company’s experience and success with video programming, broadcast television stations, broadcast programming networks, and non-broadcast programming networks targeted at specific ethnic groups, including but not limited to, competition with the video programming broadcast television stations, broadcast programming networks, and non-broadcast programming networks owned by, operated by managed by, attributed to or produced by Univision Communications Inc.

RESPONSE:

Documents responsive to this request will be produced to the FCC.

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11.

Produce all documents created or received by the Company that relate to the Company’s or any other person’s (i) pricing plans; (ii) pricing policies; (iii) pricing lists; (iv) rate cards; (v) pricing forecasts; (vi) pricing strategies; (vii) pricing analysis; (viii) introduction of new pricing plans or promotions; (ix) bundled pricing, including analysis of the profitability of bundles and their impact on customer retention; and (x) pricing decisions relating to each relevant service.

RESPONSE:

Documents responsive to this request will be produced to the FCC.

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12.

State the name and address of each person that has entered or attempted to enter into, or exited from, the provision of each relevant service, from January 1, 2009, to the present. For each such person, identify the services it provides or provided; the area in which it provided the services, including whether the person has sold or distributed the relevant service in the United States; and the date of its entry into or exit from the market. For each entrant, state whether the entrant built a new facility, converted assets previously used for another purpose (identifying that purpose), or began using facilities that were already being used for the same purpose.

RESPONSE:

Information and data responsive to this request have been provided in machine-readable Excel spreadsheet format as Exhibit 12.

Comcast’s response to this request is based on information obtained through reasonable inquiry of knowledgeable employees of the company and from publicly available sources, but does not provide a comprehensive list of all entrants since 2009 in each relevant service. Although Comcast believes the sources on which its response is based to be generally reliable, it cannot fully verify the reliability of information obtained from third-party sources, many of which are self-reported.13

With respect to the geographic areas in which the entrants listed in Exhibit 12 provide service, MVPD services provided by DBS providers are available on a nationwide basis, and the availability of other providers varies depending on the geographic reach of the cable systems deployed by cable operators and telephone companies that provide MVPD services. Information with respect to this geographic reach has been provided in Comcast’s response to Request 2 above. OVD services and other Internet Edge services are generally available on a nationwide basis to households that have access to the Internet. Video programming services are generally available on a nationwide basis; the availability of certain specific video programming services may be regional or local (e.g., regional sports or local news networks). Internet access service provided by mobile wireless or satellite providers are generally available on a nationwide basis, and the availability of other providers varies depending on the geographic reach of the cable and telephone company systems that provide these services. Internet backbone services are generally available on a nationwide basis.

Comcast generally does not maintain information concerning the facilities used by the entities listed in Exhibit 12.

13 Exhibit 12 does not include information that is already provided regarding Comcast-owned programming networks to the extent such information is already provided in response to Request 18.

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13.

Provide a list of possible new entrants into the provision of, or a substitute for, each relevant service, stating why the Company believes each person is a possible entrant or could provide a substitute service, including but not limited to, mobile wireless broadband service, and what steps it has taken toward entry. Submit a list of all requirements for entry into the provision of, or a substitute for, a relevant service and an estimate of the time required to meet each requirement, and provide all documents relating to research and development, planning and design, production requirements, distribution systems, service requirements, patents, licenses, sales and marketing activities, and any necessary governmental and customer approvals for entry in to the provision of each relevant service.

RESPONSE:

Documents responsive to this request will be produced to the FCC. Comcast’s response to this request is based on information obtained through reasonable inquiry of knowledgeable employees of the company and from publicly available sources, but does not provide a comprehensive list of all possible new entrants or possible substitute services, nor of all requirements and timing variations of meeting them, which vary greatly depending on scope of entry (as discussed in greater detail in response to Request 15). Although Comcast believes the sources on which its response is based to be generally reliable, it cannot fully verify the reliability of information obtained from third-party sources, many of which are self-reported.

A. Video Programming Distribution

1. MVPD

MVPD services are currently provided by cable companies (also known as multiple system operators or “MSOs”), telephone companies, Satellite Master Antenna TV companies, and direct broadcast satellite (“DBS”) companies. Entry into the MVPD market generally requires significant fixed-cost investment to build out the physical infrastructure (e.g., fiber-optic cables, satellites) needed to deliver multiple channels of content. Nevertheless, companies continue to make these investments and to launch new MVPD options for consumers. For example, CenturyLink, Inc. recently began offering its own MVPD service (“Prism TV”) in select markets and has indicated its intention to expand these offerings. Google, Inc. also has begun offering MVPD service in select markets through its Google Fiber service, and has announced its intention to expand to up to 34 communities in nine metropolitan areas. AT&T has also announced plans to accelerate expansion of its U-verse MVPD service across its footprint,14 although the status of those plans is now uncertain given the pending DirecTV transaction. As discussed below with regard to Internet Access, municipal providers may also continue to enter the video programming distribution market.

14 Remarks of Randall Stephenson, Chairman & CEO, AT&T Inc., Morgan Stanley Technology, Media & Telecom Conference (Mar. 6, 2014) available at http://seekingalpha.com/article/2072813-at-and-ts-ceo-presents-at-morgan-stanley-technology-media-and-telecom-conference-transcript.

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Based on the success of AT&T U-verse, Verizon FiOS, and CenturyLink Prism, other telephone companies appear to be particularly well positioned to enter the MVPD market. Following Google’s example, other technology companies may decide to enter the MVPD market as well, taking advantage of complementary products, brand recognition, customer relationships, and large cash positions.

2. OVD

The OVD industry continues to grow and evolve, and video content available on the Internet has proliferated from numerous sources.15 As the FCC noted in a recent report, the OVD industry continues to innovate, and “no single business strategy has emerged as the dominant model.”16 OVDs use various business strategies for offering access to content, including free access supported by advertising, subscription services (both with and without advertising), or on-demand purchases or rentals, with some OVDs offering more than one option.17 OVDs are also increasingly popular among consumers. One OVD, Netflix, reportedly now has over 39 million U.S. subscribers (over 50 million worldwide), representing half of all Internet customers in the United States and almost twice as many subscribers as the largest MVPD, Comcast. As a result, Netflix accounted for approximately 34 percent of all peak-period Internet download traffic in North America as of May 2014.18 Hulu, according to the FCC, is “the major player among advertiser-supported OVDs” and makes available over 1,500 TV shows, 21,000 TV episodes, and 1,700 movies.19 Additionally, Amazon, Google, and Apple each offer their own robust OVD services.

Several companies, inside and outside traditional media, are continuing to experiment with new business models and technology platforms, including business models that reportedly will be offered as a potential substitute for MVPD services. A partial list of possible future entrants in the provision of OVD services includes the following:

15 See Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, Fifteenth Report, 28 FCC Rcd 10496 ¶ 223 & n.787 (2013) (“Fifteenth Video Competition Report”) (noting that Sandvine, an Internet network equipment and software company, measured over 28,000 unique websites streaming multiple videos online in the U.S. in a single month during Fall 2011).

16 See id. ¶ 269.

17 See id. ¶ 270.

18 Sandvine, Global Internet Phenomena Report 1H 2014, at 6 (2014), available at https://www.sandvine.com/downloads/general/global-internet-phenomena/2014/1h-2014-global-internet-phenomena-report.pdf; see also Drew Fitzgerald, Netflix’s Share of Internet Traffic Grows, Wall St. J., May 14, 2014, http://online.wsj.com/news/articles/SB10001424052702304908304579561802483718502. Four other OVD services (YouTube, iTunes, Amazon Video, and Hulu) were listed among the top ten applications driving peak period download traffic in North America as of May 2014. See Fitzgerald, supra.

19 See Fifteenth Video Competition Report ¶ 271.

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a. Start-up OVDs

The most popular OVD today, Netflix, launched as a DVD-by-mail company that evolved its business into an Internet start-up and is now the world’s leading Internet television network offering more than a billion hours of TV shows and movies each month. Similarly, Machinima.com was founded in 2000 and now bills itself as “the dominant video entertainment network for young males around the world.”20 In addition to making its videos available through its own website, Machinima serves more than 2 billion monthly video views reaching over 175 million unique viewers each month, and features, among other things, scripted series, original content, and weekly and daily shows, all available through an app on a variety of Internet-connected devices. Other OVDs have had even more modest beginnings. Vimeo, for example, was founded by a group of filmmakers who wanted to share their creative work and personal moments of their lives; it enables consumers to produce their own content and share it with others on the Internet, including by developing “Channels” around common themes such as Documentary Films, Animation, Sports, etc. Given the low barriers of entry to distribution of video on the Internet, start-up OVDs are likely to continue to emerge on an ongoing basis.

b. Consumer Electronics Manufacturers

Consumer electronics manufacturers are potential entrants into the provision of OVD services. These manufacturers can use OVD services to stimulate sales of their consumer electronics or diversify their businesses. Manufacturers may also have strong brand recognition and existing marketing and advertising channels that could provide an advantage in starting a new OVD service. Indeed, multiple consumer electronics manufacturers have launched OVDs in recent years. Apple, Inc., for example, primarily sells computers and other devices but also sells video content through its iTunes service. That service, in turn, drives demand for Apple products, including the Apple TV set-top device. Sony Corp. has launched its own OVD service and is developing original exclusive video programming content for Sony PlayStation consoles.21 Sony also has announced plans to launch a full MVPD replacement service over the Internet and is actively negotiating carriage contracts with programmers.22 Similarly, Microsoft offers an OVD service, Xbox Video, available on Xbox devices, mobile devices, and web browsers. Microsoft Xbox also supports multiple third-party OVD applications, including HBO GO, Netflix, Amazon Instant Video, and several others. Given the advantages that consumer electronics manufacturers can capitalize on and the success of OVDs launched by similar companies, these consumer electronics manufacturers may decide to expand or evolve their OVD services, and other consumer electronics manufacturers may decide to launch their own OVD services.

20 About Machinima, Machinima, Inc., https://www.machinima.com/overview/ (last visited Sept. 10, 2014).

21 See Chris O’Brien, E3: Sony VP talks ‘Powers,’ its first TV series for PlayStation, L.A. Times, June 13, 2014, http://www.latimes.com/business/technology/la-fi-tn-sony-vp-talks-powers-its-first-tv-series-for-playstation--20140613-story.html.

22 Andrew Wallenstein, Sony in Talks for Virtual MSO Service, Variety, Jan. 3, 2013, http://variety.com/2013/digital/news/sony-in-talks-for-virtual-mso-service-1118064150.

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c. Video Programming Providers

A video content provider that decides it is in its business interest to do so can create an OVD service by allowing online access to its content, either through its own website or in partnership with an existing online video service. A substantial number of studios, broadcast networks, sports leagues, and programming networks offer content on the Internet or on mobile applications, including Sony, Warner Brothers, Paramount, ABC, CBS, FOX, NBC, ESPN, NBC Sports Network, Fox Sports, the NFL, NHL, NBA, and MLB, among others.23 Video content providers that currently do not provide such access, and possess the rights to do so, may enter the provision of OVD services by providing such access.

d. Internet Search Engines, Portals, and Social Networking Sites

Potential entrants into the OVD market may include other Internet-based companies such as Internet search engines, portals, and social networking sites. Online video distribution is complementary to these sites’ existing users: online video can be used to attract, retain, and more effectively monetize website users. Moreover, Internet-based companies may be able to use existing servers, network infrastructure, and commercial relationships to facilitate storage and distribution of bandwidth-intensive high-definition online video.

Some existing search engines and social networking sites already distribute video content online. Facebook, for example, entered the OVD market in 2011, offering online movie rentals for Warner Brothers, Miramax, and Universal Studios movies through applications on Facebook.24 Google, which already owns the largest provider of online video in the world, YouTube,25 launched an Internet-based entertainment store, Google Play, in March 2012, which includes thousands of episodes of television programs, including content from NBCUniversal, ABC Studios, and Sony Pictures.26 Yahoo! likewise has an OVD service that includes original content and content from multiple video programming networks.27 New search engines, Internet portals, and social networking sites are likely to emerge that will also launch OVDs to take advantage of the popularity of online video programming.

23 See Fifteenth Video Competition Report ¶ 224.

24 See id. ¶ 230.

25 See comScore Releases June 2014 U.S. Online Video Rankings, comScore, Inc. (July 21, 2014), http://www.comscore.com/Insights/Market-Rankings/comScore-Releases-June-2014-US-Online-Video-Rankings.

26 See Fifteenth Video Competition Report ¶ 235; Google play, Google, https://play.google.com/store (last visited Sept. 10, 2014).

27 See Fifteenth Video Competition Report ¶ 229.

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e. Retail Companies

Online and brick-and-mortar retailers also are current and potential entrants into the OVD market. Retail companies can use competitive advantages such as an established Internet presence, customer bases, and existing retail relationships with content providers and electronics manufacturers to successfully launch a new OVD service. Large retail companies may also have easy access to capital to finance such a venture.

Amazon, for example, is the leading online retail company, but also has a growing online video business. Amazon currently offers streaming and downloadable television programs and movies on a transactional basis through its Amazon Instant Video service and on a subscription basis through its Prime Instant Video Service. Amazon also has signed a series of agreements with HBO and other programmers for prior seasons of popular TV shows. Amazon recently launched the Amazon Fire TV set-top box, which includes multiple OVD applications in addition to Amazon Instant Video, and also sells a tablet device (the Kindle Fire) that allows for mobile viewing of HD video (either streamed in real time or downloaded to the device).

Similarly, Wal-Mart, primarily a brick-and-mortar consumer goods retailer, owns the OVD Vudu and makes Vudu available to electronics manufacturers to integrate into their products. Best Buy, with its nearly 2,000 retail locations, also has an OVD service, CinemaNow, which allows customers to rent or purchase TV or movie programming.

f. MVPDs

Cable operators and direct broadcast satellite companies can each offer their own over-the-top services.28 MVPDs already maintain a presence on the Internet, and many already provide interactive online portals that allow their subscribers to view programming over-the-top or to schedule programs for recording on a digital video recorder (“DVR”), among other functions.

Indeed, several MVPDs, including Verizon and DirecTV, already have begun to offer, or announced plans to offer, such services. For example, in February 2012, Verizon formed a joint venture with the parent company of Redbox to provide over-the-top services.29 And, earlier this year, Verizon purchased an online video streaming service from Intel that purportedly will enable it to provide a competitive MVPD substitute service over the Internet, including over wireless broadband networks.30 Similarly, in 2012, DISH Network launched DISHWorld, which offers international movie content that customers

28 See id. ¶ 239 (noting that “[s]everal MVPDs offer services to non-subscribers”).

29 Id. ¶ 240.

30 Hayley Tsukayama, Verizon buys Intel’s cloud TV service, Wash. Post, Jan. 21, 2014, http://www.washingtonpost.com/business/technology/verizon-buys-intels-cloud-tv-service/2014/01/21/67e94336-82a5-11e3-9dd4-e7278db80d86_story.html; Janko Roettgers, Why Verizon is Buying Intel Media: It’s All About Taking on Comcast, Gigaom, Jan. 21, 2014, http://gigaom.com/2014/01/21/why-verizon-is-buying-intel-media-its-all-about-taking-on-comcast.

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can stream on various devices,31 and more recently, announced that it would offer a new service allowing subscribers to stream live and on-demand content from A&E and Walt Disney networks such as ABC and ESPN over the Internet.32 DISH is also reported to be considering acquiring T-Mobile, which could give DISH “a national wireless network over which it could deliver mobile video” and “challenge conventional cable television.”33 These recent trends suggest that MVPDs that do not already offer an over-the-top service, but possess online programming distribution rights, are potential candidates for entry into the provision of OVD service. Indeed, IPTV services such as Sky Angel now offer over-the-top access to various cable networks, similar to MVPDs.

In this manner, OVDs and MVPDs can, in some regards, be viewed as providing either complementary or substitute services.

B. Video Programming

The number of video programming networks and the diversity of programming available have changed significantly over the last two decades. Looking only at cable television networks, the U.S. Court of Appeals for the D.C. Circuit observed in 2009 that “the number of cable networks has increased by almost 500 percent since 1992 and has grown at an ever faster rate since 2000.”34 Firms that have begun to provide video programming through new cable networks have included not only existing cable network providers and MVPDs, but also movie studios, television production companies, sports teams and associations, venture capital firms, and independent content producers. Moreover, new video programming distributed online or by video-on-demand (“VOD”) services continues to emerge.

Based on recent trends and on the number of entities that have announced their interest in creating new video programming, and the increasing number of available outlets for video programming, it is reasonable to conclude that new video programmers will continue to emerge.

31 See Fifteenth Video Competition Report ¶ 239.

32 Press Release, Dish Network Corp., ESPN and Disney/ABC Television Group Launch WATCH Authenticated Products to DISH Customers (Apr. 1, 2014), http://about.dish.com/press-release/programming/espn-and-disneyabc-television-group-launch-watch-authenticated-products-di; Daniel Frankel, Dish trademarks new name and logo, possible for online video service: ‘Nutv’, FierceCable, Sept. 2, 2014, http://www.fiercecable.com/story/dish-trademarks-new-name-and-logo-possibly-online-video-service-nutv/2014-09-02.

33 Alex Sherman et al., Dish Said to Discuss T-Mobile Deal with Deutsche Telekom, Bloomberg, Sept. 5, 2014, http://www.bloomberg.com/news/2014-09-05/dish-said-to-discuss-t-mobile-deal-with-deutsche-telekom.html.

34 Comcast Corp. v. FCC, 579 F.3d 1, 8 (D.C. Cir. 2009).

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1. Demand for New Video Programming Networks

New video programming likely will be launched to address the changing needs of diverse audiences, evolving interests of the viewing public, and new technologies:

a. Affinity Groups

As the demographic composition of the United States shifts, new video programming will likely emerge to meet the needs of diverse audiences. Over the past 10 years, for example, a number of Spanish-language cable television networks have emerged to satisfy the needs and interests of the United States’ growing Hispanic population. As various ethnic populations of the United States continue to grow, video programming options, including new video programming networks, will likely continue to emerge to meet demands for language- and culture-specific content.

b. Evolving Interests

New video programming also will likely emerge in response to viewers’ evolving interests. A number of new cable television networks – including Wine TV, Crime & Investigation Network, and Retirement Living TV – have emerged in the past ten years to serve the special interests of niche audiences.35 Based on these trends, it is likely that new networks will be introduced to address consumers’ changing interests.

c. New Technology

New and existing video programming providers also are likely to harness emerging technologies to provide cutting-edge content to consumers. For example, advanced TV set-top boxes with interactive features could allow programmers to develop customizable channels. Viacom recently announced plans to launch a children’s programming network that allows viewers to indicate preferences and personalize the content aired on the channel.36 Other companies also likely will enter the video programming market to take advantage of new opportunities made available by improved technology.

2. Possible Future Entrants

A partial list of possible future entrants to the provision of video programming includes the following:

35 OVDs such as YouTube have also begun developing video programming to cater to specific interest. See Lauren Indvik, YouTube CEO: The Future of Content Is Niche Channels, Mashable (Jan. 31, 2012), http://mashable.com/2012/01/31/youtube-niche-content-passive-viewing.

36 See Amol Sharma, Viacom to Launch Customized Kids’ TV Channel, Wall St. J., Jan. 14, 2014, http://online.wsj.com/news/articles/SB10001424052702303754404579312904182126302.

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a. Existing Video Programming Providers

Existing owners of cable television networks are likely in the future to launch new video programming networks and develop new video programming for distribution in other formats. Existing cable network providers enjoy the benefits of (a) carriage relationships with MVPDs, (b) relationships with advertisers, and (c) experiential knowledge derived from launching other programming networks. News Corp., for example, launched two new networks in 2013 (Fox Sports and FXX).37 Other large, established cable television networks are likely to continue developing and launching new channels to cater to changing preferences of cable television audiences. Existing owners of cable television networks are also likely to develop new video programming specifically for online distribution. By launching an Internet-based video programming network, an existing video programmer can use existing production assets to develop content to reach specific audiences and broaden their reach. For example, Discovery Communications Inc., which owns a number of cable television networks, recently launched TestTube, a free, online video network targeted at the young male demographic.38 Other existing video programming providers are likely pursue a similar strategy.

In addition, video programming providers that currently offer only online content may migrate their programming to cable television networks or television VOD services. Some video programming networks that began as VOD-only networks, such as Anime, Fearnet, and Sprout, have used that programming to launch a linear television network. Similarly, funnyordie.com, which began as an online-only viewing service, now distributes content on HBO.

b. Media Figures, Owners of Established Entertainment Brands, and Individual Entrepreneurs

The uncertainties of launching a new cable television network are diminished when the new network is able to leverage a recognized entertainment brand. Media personalities that enjoy such brand recognition are therefore potential entrants into the provision of cable television networks. For example, political commentator Glenn Beck recently launched The Blaze; musician Sean “Diddy” Combs recently launched Revolt, a music-oriented network showing music videos, live performances, and news and interviews; and filmmaker Robert Rodriguez recently launched El Rey.39 Other high-profile media figures may also decide to develop their own video programming networks.

37 Cynthia Littleton, Congloms Firing up New Cable Channels as Climate Improves, Variety, Sept. 13, 2013, http://variety.com/2013/tv/news/congloms-firing-up-new-cable-channels-as-climate-improves-1200609613.

38 Keach Hagey, Discovery to Launch ‘TestTube’ Online Video Network, Wall St. J., May 23, 2013, http://online.wsj.com/news/articles/SB10001424127887323336104578499540671665824.

39 See Jeanine Poggi, New TV Networks Scorecard: Eight Cable Channels to Watch in 2014, Advertising Age, Dec. 26, 2013, http://adage.com/article/media/tv-networks-scorecard-channels-watch-2014/245770.

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Existing media recognition also provides an advantage in developing new online or VOD content. Media figures with a presence on cable television may be particularly likely to develop new programming for distribution online to reach niche audiences. For example, Jeffrey Hayzlett of the Bloomberg TV show C-Suite is launching an over-the-top on-demand video service called C-Suite TV that provides new content that caters to existing C-Suite viewers.40 Other media figures, including former Vice Presidential candidate and Alaska Governor Sarah Palin and comedian Louis CK, have also recently launched online-only video programming networks.41 It is likely that other media figures, entrepreneurs, and owners of entertainment brands will pursue a similar strategy by launching video programming networks on the Internet to reach new audiences.

c. Sports Organizations

Much like established entertainment brands, sports teams and leagues may be able to leverage their current fan base to create new video programming networks. In recent years, several sports teams and leagues, including a number of collegiate sports conferences, have launched cable television networks. In the future, other sports organizations may likewise take advantage of their existing audiences to introduce new video programming networks.

d. Venture Capital Firms

Venture capital firms currently own interests in various video programming networks, including the Gospel Music Channel, Ovation TV, and Tennis Channel. Given their access to capital and existing carriage relationships, these and other venture capital firms could launch new video programming networks in the future.

To the extent that video programming is viewed primarily as a source of entertainment or information, any current or prospective provider of entertainment or information, including many of the potential new entrants in video programming, could potentially be viewed as offering a substitute service.

C. Internet Access Services

1. Subscribers

Internet access services are currently provided by a variety of companies, including cable system operators, telephone companies, satellite companies, and mobile wireless providers. The availability of high-speed Internet access from multiple providers across

40 See Jim O’Neill, C-Suite’s Jeffrey Hayzlett launches an online, on-demand business TV network, Ooyala, July 15, 2014, http://www.ooyala.com/es/videomind/blog/c-suite-s-jeffrey-hayzlett-launches-online-demand-business-tv-network.

41 See Andrew Kirell, Sarah Palin Launches Subscription-Based Online Video Channel, Mediaite, July 27, 2014, http://www.mediaite.com/tv/sarah-palin-launches-subscription-based-online-video-channel/; Louis CK, http://www.louisck.net (last visited Sept. 10, 2014).

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the United States has increased significantly in recent years, and numerous companies are providing broadband Internet access services across a range of technological platforms.42

Telephone companies provide fiber-to-the-premises services to a growing number of American households and are upgrading their DSL-based services, in many cases by building fiber-to-the-node, to offer faster speeds across the country. Today, CenturyLink offers DSL speeds up to 40 Mbps, AT&T offers speeds up to 45Mbps, Verizon offers speeds up to 15 Mbps, and Frontier offers speeds up to 25 Mbps.43

CenturyLink has introduced 1 Gbps fiber-to-the-premises service to business and residential customers in 16 cities, including Denver, Seattle, and Minneapolis-St. Paul.44 CenturyLink also continues to invest in DSL upgrades including VDSL2 and pair bonding to improve broadband speeds across its footprint.45 Overall, telephone companies appear well-positioned to offer highly competitive broadband speeds well into the future.46

Cable overbuilders, new entrants like Google fiber, municipal providers, fixed wireless providers, and satellite broadband providers also are competing vigorously. And well-capitalized and aggressive nationwide mobile broadband providers now offer services that provide speeds comparable to many of the fixed broadband services that consumers purchase.47

42 See Comcast Corp. and Time Warner Cable Inc., Applications and Public Interest Statement, MB Docket No. 14-57, at 42-56 (Apr. 8, 2014) (“Public Interest Statement”).

43 See Letter from Lynn R. Charytan, SVP, Legal Regulatory Affairs and Senior Deputy General Counsel, Comcast Corp., to Marlene H. Dortch, Secretary, FCC, MB Docket No. 10-56, Ex. A, Pt. 3, at 10 (Feb. 21, 2014) (detailing competitive standalone broadband options in Comcast’s top 30 markets).

44 Press Release, CenturyLink, Inc., CenturyLink expands its gigabit service to 16 cities, delivering broadband speeds up to 1 gigabit per second (Aug. 5, 2014), http://news.centurylink.com/news/centurylink-expands-its-gigabit-service-to-16-cities-delivering-broadband-speeds-up-to-1-gigabit-per-second.

45 See, e.g., Glen F. Post, President and CEO, CenturyLink, Inc., Q4 2013 Earnings Call, Tr. at 5 (Feb. 12, 2014) (“We have utilized and continued to utilize a balanced capital investment approach, including gigabit fiber, VDSL2, and pair bonding deployments to efficiently enable higher speeds, enhanced services to consumers and businesses in our markets”).

46 Robert W. Starr, Treasurer & SVP, Frontier Commc’ns Corp., Goldman Sachs TMT Leveraged Finance Conference, Tr. at 5 (Mar. 19, 2014) (noting Frontier is “compet[ing] against [cable] today on the residential and on the small business side and we’re taking share away from them on the residential side . . . . [W]e think that our opportunit[y] against the cable companies continue to be a very good one”).

47 See Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the Telecommunications Act of 1996, as Amended by the Broadband Data Improvement Act, Eighth Broadband Progress Report, 27 FCC Rcd 10342 ¶ 6 (2012) (noting that mobile providers are “deploying new, faster, and more spectrally efficient mobile network technologies, most notably Long Term Evolution (LTE), which offers advertised download speeds as high as 5-12 Mbps”).

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Broadband providers are racing to give consumers access to the Internet content and applications that they demand. For example, in 2010, AT&T offered only traditional ADSL service to the significant majority of the 76 million households in its wireline footprint48 and had announced no plans to upgrade its network in these areas. Today, AT&T is well into the process of deploying a mix of fiber-to-the-premises, fiber-to-the-node, IP-DSLAM, and fixed wireless broadband technologies to as many as 70 million customer locations.49 Google, CenturyLink, Cox, and others have also announced ambitious plans to roll out fiber-to-the-premises networks and have begun to set these plans into motion.50

Notably, in 2010, none of the four nationwide mobile broadband providers had even begun to deploy LTE networks until Verizon began its deployment in December of that year.51 Now, all four major wireless providers operate LTE networks that collectively blanket the nation.52 And, the fastest mobile LTE network in the United States can achieve average download speeds close to 20 Mbps and peak speeds over 70 Mbps.53

48 Press Release, AT&T Inc., AT&T Reports Record 2.8 Million Wireless Net Adds, Strong U-verse Sales, Continued Revenue Gains in the Fourth Quarter (Jan. 27, 2011), http://www.att.com/gen/press-room?pid=18952&cdvn=news&newsarticleid=31519&mapcode=financial (indicating that U-Verse passed 27 million of the living units in AT&T’s footprint in Q4 2010).

49 See Press Release, AT&T Inc., AT&T to Acquire DIRECTV (May 18, 2014), http://about.att.com/story/att_to_acquire_directv.html (“AT&T/DirecTV Press Release”).

50 See Milo Medin, VP, Google Access Services, Exploring New Cities for Google Fiber, Google Fiber Blog (Feb. 19, 2014), http://googlefiberblog.blogspot.com/2014/02/exploring-new-cities-for-google-fiber.html; Press Release, CenturyLink, Inc., CenturyLink Brings 1 Gigabit Fiber Service to Las Vegas (Oct. 9, 2013), http://news.centurylink.com/news/centurylink-brings-1-gigabit-fiber-service-to-las-vegas-2598362; Press Release, Cox Commc’ns, Cox Communications Kicks Off Plan to Offer Residential Gigabit Speeds (May 22, 2014), http://cox.mediaroom.com/index.php?s=43&item=753.

51 Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993; Annual Report and Analysis of Competitive Market Conditions with Respect to Mobile Wireless, Including Commercial Mobile Services, Fifteenth Report, 26 FCC Rcd 9664 ¶¶ 108-14 (2011) (describing the four nationwide mobile broadband providers’ initial efforts to test and deploy LTE services); see also Press Release, Verizon Wireless, Blazingly Fast: Verizon Wireless Launches the World’s Largest 4G LTE Wireless Network on Sunday, Dec. 5 (Dec. 3, 2010), http://www.verizonwireless.com/news/2010/12/pr2010-12-03.html (touting Verizon’s LTE network, which launched in 38 cities in December 2010, as “the world’s largest”).

52 See The Verizon Wireless 4G LTE Network, Verizon Wireless, http://www.verizonwireless.com/news/LTE/Overview.html (last visited Sept. 10, 2014); About Our Network, AT&T, http://about.att.com/news/wireless-network.html (last visited Sept. 10, 2014); Press Release, Sprint Corp., 4G LTE Launched Markets (Sept. 9, 2014), http://newsroom.sprint.com/news-releases/4glte-launchedmarkets.htm; T-Mobile 4G LTE, T-Mobile, http://t-mobile-coverage.t-mobile.com/4gcitylist.aspx (last visited Sept. 10, 2014). According to NTIA data, 97.3 percent of households in the United States have access to a mobile wireless provider offering downstream speed of at least 10 Mbps. See Mark A. Israel, Implications of the Comcast/Time Warner Cable Transaction for Broadband Competition ¶ 62 (Apr. 8, 2014), Exhibit 6, Applications and Public Interest Statement, MB Docket No. 14-57 (“Israel Decl.”). The FCC recently noted in its Open Internet NPRM that LTE subscriptions grew by a factor of nearly 500 during this period, see Protecting and Promoting the Open Internet, Notice of Proposed Rulemaking, 29 FCC Rcd 5561, ¶ 48 n.110 (May 15, 2014), and SNL Kagan predicts that there will be 224 million unique 4G subscriptions in the United States by 2018, see SNL Kagan, Covered Pops & Subscribers by Technology in U.S. Wireless (July 2013). Mobile broadband’s share of the Internet ecosystem is rapidly growing; mobile data traffic is projected to grow three times faster than fixed IP data traffic between 2013 and 2018. See Visual Networking Index: Forecast and Methodology, 2013-2018, Cisco (June 10, 2014), http://www.cisco.com/c/en/us/solutions/collateral/service-provider/ip-ngn-ip-next-generation-network/white_paper_c11-481360.html.

53 See Israel Decl. ¶ 61.

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These competitive developments are reflected in the FCC’s Form 477 data. The tables below illustrate broadband competition at the 10 Mbps threshold. The most recently released round of this data is from June 2013 and thus does not account for significant additional progress that has been made in the past year, but even the June 2013 data reveal a significant increase in competition since the FCC’s previous review:

Number of Fixed Broadband Providers54	% of Households as of December 31, 2009	% of Households in June 2013
At Least 3	2%	54%
At Least 2	22%	92%
At Least 1	80%	99%

Furthermore, when accounting for mobile broadband providers the data show that competition is even more vibrant:

Number of Fixed or Mobile Broadband Providers55	% of Households in December 2009	% of Households in June 2013
At Least 3	2%	91%
At Least 2	22%	98%
At Least 1	80%	99%

Chairman Wheeler recently stressed the importance of targeting ever-higher broadband

54 This chart displays the number of households located in census tracts where fixed broadband providers reported offering broadband Internet access service speeds of at least 10 Mbps downstream and 1.5 Mbps upstream. See FCC, Internet Access Services: Status as of December 31, 2009 (WCB Dec. 2010), 7 & fig. 3(a), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-303405A1.pdf; Internet Access Services: Status as of June 30, 2013, Ind. Analysis & Tech. Division, Wireline Competition Bureau, FCC, (June 2014), at 9 & fig. 5(a), available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0625/DOC-327829A1.pdf (“June 2013 IAS Report”).

55 This chart displays the number of households located in census tracts where fixed broadband providers reported offering broadband Internet access service speeds of at least 10 Mbps downstream and 1.5 Mbps upstream or mobile broadband providers reported operating a network capable of such speeds. See Internet Access Services: Status as of December 31, 2009, Ind. Analysis & Tech. Division, Wireline Competition Bureau, FCC, (Dec. 2010), at 8 & fig. 3(b), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-303405A1.pdf; June 2013 IAS Report at 10 & fig. 5(b).

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speeds in order to meet increasing consumer demand.56 Although many online activities do not require higher speeds, the demand from consumers noted by Chairman Wheeler illustrates the strong incentives that broadband providers have to upgrade and deploy increasingly better technology, and improve and expand their offerings. Thus it is not surprising that various mobile and fixed broadband providers have undertaken significant investments in recent years and are likely to continue to do so.

Moreover, municipal governments also have begun offering Internet access service to local residents.57 For example, Santa Cruz County recently announced a plan to build out Internet infrastructure to extend broadband service.58 Indeed, as of May 2013, there were approximately 135 municipal fiber-optic networks in the United States.59

Potential new entrants into the provision of Internet access services may include telephone companies, technology companies, cable overbuilders, wireless companies, or more government municipalities. DISH Network also has begun trials partnering with wireless providers such as Sprint to provide fixed wireless services.60 In recent trials, DISH and Sprint achieved download speeds of 200 Mbps.61 And, as innovations in wireless technology lead to faster speeds and greater capacity,62 other wireless options are likely to emerge and begin offering high speed fixed and mobile broadband products. Indeed, the price per gigabyte of transmitting data over mobile wireless networks is likely to continue decreasing as available spectrum and spectral efficiency both increase.63 These reductions in cost will likely cause reductions in prices for consumers and greater usage of mobile wireless broadband.64

56 Remarks of Chairman Tom Wheeler, FCC, “The Facts and Future of Broadband Competition,” 1776 Headquarters, Washington, D.C. (Sept. 4, 2014), http://www.fcc.gov/document/chairman-remarks-facts-and-future-broadband-competition.

57 See Edward Wyatt, Fast Internet is Chattanooga’s New Locomotive, N.Y. Times, Feb. 3, 2014, http://www.nytimes.com/2014/02/04/technology/fast-internet-service-speeds-business-development-in-chattanooga.html?_r=0 (describing Chattanooga, Tennessee’s taxpayer-owned fiber optic network).

58 Jason Hoppin, Santa Cruz County to get new Internet backbone, Santa Cruz Sentinel, Apr. 11, 2014, http://www.santacruzsentinel.com/news/ci_25549462/santa-cruz-county-get-new-internet-backbone.

59 Masha Zager, Number of Municipal FTTP Networks Climbs to 135, Broadband Communities, May/June 2013, http://www.bbpmag.com/Features/0513feature-MuniCensus.php.

60 Press Release, Sprint Corp., Sprint and DISH to Trial Fixed Wireless Broadband Service (Dec. 17, 2013), http://newsroom.sprint.com/news-releases/sprint-and-dish-to-trial-fixed-wireless-broadband-service.htm.

61 Sarah Reedy, Son: Dish Could be Sprint’s Great Ally, LightReading, Mar. 27, 2014, http://www.lightreading.com/mobile/4g-lte/son-dish-could-be-sprints-greatally/d/d-id/708408.

62 See Sacha Segan, Fastest Mobile Networks 2014, PC Magazine, June 11, 2014, http://www.pcmag.com/article2/0,2817,2459185,00.asp.

63 See Israel Decl. ¶ 67.

64 Id.

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2. Edge Providers65

Entities that provide content, applications, or services over the Internet frequently can be providers of similar services in offline settings. For example, Sony has a series of PlayStation video game platforms that can work with the internet or offline. Depending on the service, providers of offline versions of the service are likely to be well-positioned as new entrants as an edge provider service. To the extent that substitute products are available, these are likely to be provided by existing providers of offline versions of the services, depending on the type of service described.

Voice over Internet Protocol (“VoIP”) services are currently offered by many companies, and several new service providers have launched in the past few years. Existing VoIP providers includes companies like Cisco that offer an array of communication and networking services for businesses. Other companies offering communication services and equipment to business are likely to develop and launch new VoIP offerings.

Existing VoIP providers also include mobile app-based services such as Viber. Given the ongoing improvements in mobile wireless networks and ubiquitous use of mobile devices like tablets, new app developers are particularly likely to enter the provision of VoIP service. For example, the popular instant messaging service WhatsApp? is reported to be developing a VoIP product.66

D. Internet Backbone Services

The Internet backbone service industries are dynamic and continue to evolve in response to changes in technology and consumer preferences. In the order approving the Level 3/Global Crossing merger, the FCC noted that “the number of Tier 1 ISPs appears to have grown since 2005” and that “[t]he emergence of several new Tier 1 peers . . . undercuts the argument that there are overwhelming barriers to entry into the Tier 1 market.”67 Several other companies in addition to traditional Tier 1 ISPs offer combinations of direct peering, transit, and Content Delivery Network (“CDN”) services, and that number is likely to continue to grow. Indeed, evidence suggests that the traditional view of a “hierarchy” of Internet backbone services, in which Tier 1 ISPs typically peer with one another on a settlement-free basis and other ISPs purchase transit from the Tier 1 providers, no longer describes the range of relationships in Internet backbone services.68 Instead, Internet companies in need of Internet backbone services have multiple alternatives, including CDNs, as well as direct peering or partial transit.69

65 OVDs are discussed above under Video Programming Services.

66 Lance Whitney, WhatsApp could add voice calling very soon, CNET.com, Apr. 9, 2014, http://www.cnet.com/news/whatsapp-could-add-voice-calling-very-soon/.

67 Fifteenth Video Competition Report ¶ 28.

68 See Israel Decl. ¶ 74.

69 Id.

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Internet-based companies including Google, Facebook, and Amazon have also begun investing in their own Internet backbone infrastructure.70 By investing in fiber networks, Internet-based companies may be able to reduce their own content delivery costs and improve performance. As overall Internet traffic increases with the proliferation of high-definition streaming video and other bandwidth-intensive applications, more Internet-based companies are likely to invest in infrastructure and enter the Internet backbone service market, making them possible entrants into the CDN market as well.

E. Content Delivery Networks

CDNs are, like Internet Backbone services, part of the process of delivering content over the Internet to ultimate end users. As discussed with regard to Internet Backbone services, the industry for the process of delivering content over the Internet is in flux and dynamic. CDNs are part of a broader trend towards increasing the number of traffic delivery options beyond relying on transit services provided by traditional global backbone networks. In response to overall increases in Internet traffic and demand for higher quality, various companies have been developing innovative traffic exchange solutions. Indeed, the lines distinguishing among backbone networks, Internet access providers, and content providers are increasingly blurry.71

The companies discussed above as potential new entrants for providing Internet Backbone services are likely potential providers of CDNs as well. For example, Level 3 Communications began providing CDNs after having established an Internet Backbone service. Other Internet Backbone services providers, as well as other content providers, may begin investing in CDNs. Content providers that invest in a CDN for their own content (such as Google and Apple) may later be able to use that CDN in order to provide capacity to third parties.

70 See Drew Fitzgerald & Spencer E. Ante, Tech Firms Push to Control Web’s Pipes, Wall St. J., Dec. 16, 2013, http://online.wsj.com/news/article_email/SB10001424052702304173704579262361885883936-lMyQjAxMTAzMDEwNjExNDYyWj.

71 Dennis Weller, The Internet Market For Quality, 84 Comm. & Strategies 35, 38 (2011).

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14.

Produce all documents relating to the Company’s or any other person’s pre-transaction and post-transaction plans relating to any relevant service, including, but not limited to, business plans; short-term and long-range strategies and objectives; budgets and financial projections; presentations to management committees, executive committees, and boards of directors; expansion plans; research and development efforts; and plans to deploy DOCSIS 3.1, converged cable access platform, converged regional area network, IP Cable and Wi-Fi access points and mobile wireless broadband services; plans relating to the company’s time-shifted and place-shifted video programming, dynamic ad insertion service, addressable advertising; plans to offer an OVD service outside the Company’s current service area or to provide the Company’s video programming to unaffiliated OVDs, wireless backhaul services, and business services; and plans to reduce costs, to improve services or service quality, and to manage communications security and reliability risks. For regularly prepared budgets and financial projections, the Company need only produce one copy of final year-end documents for 2011 through 2013 and cumulative year-to-date documents for 2014.

RESPONSE:

Documents responsive to this request will be produced to the FCC.

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15.

Separately for each relevant service (i) describe the minimum viable scale necessary for entry, including but not limited to, hurdle rates, the capital required for entry, construction of new facilities, spectrum and/or licensing requirements, whether carriage on any particular MVPD or OVD is necessary and if so, the identity of each such provider, and the number of subscribers and advertisers needed to break-even, and to the extent not already produced, (ii) produce all documents relating to the Company’s entry into each of the above services since January 1, 2009. Indicate in your response whether your response would vary based upon the type of video programming (e.g., movies, sports, Spanish-language).

RESPONSE:

A. Video Programming Distribution

1. MVPD

a. Minimum Viable Scale Necessary for Entry

Due to the number and complexity of the variables affecting the costs of providing an MVPD service, as described below, Comcast is unable to offer any specific estimate of the minimum viable scale necessary for entry into the market for MVPD service.72 The minimum viable scale necessary for entry in the MVPD market is a function of a number of factors, including costs (equipment, infrastructure, programming, marketing, etc.), regulatory mandates and obligations, and the objectives of the entrant (which may or may not require that the service be profitable on a standalone basis). MVPDs must establish, maintain, and operate distribution systems, acquire or create programming networks, and organize networks onto channels lineups. There are also significant regulatory requirements for entry into the market. Accordingly, minimum viable scale necessary for entry cannot be predicted in the abstract. There are, however, many MVPDs with only one thousand subscribers or fewer.73

A new MVPD may need to make significant fixed-cost investments to begin providing services. For example, an MVPD may have to build out infrastructure and acquire equipment for distributing video programming content to subscribers’ premises. Video programming can be distributed by coaxial cable, fiber-optic cable, a combination of fiber-optic cables and telephone cables, or DBS, and wireless licenses. An MVPD seeking to enter the market could either build new systems or acquire existing systems,

72 The Second Request defined MVPDs and OVDs as separate Relevant Products and Comcast is responding accordingly. As noted in the introductory comments, however, the issue of antitrust product market definition is not addressed here. The Complaint filed in connection with the NBCUniversal transaction could be read to define a single antitrust product market that includes both MVPDs and OVDs. See Complaint, United States v. Comcast Corp., No. 1:11-cv-00106 ¶¶ 34-35 (D.D.C. Jan. 18, 2011). In the same transaction review, the FCC concluded that it did not need to determine whether MVPDs and OVDs operated in the same market. See Applications of Comcast Corp., Gen. Elec. Co., and NBC Universal, Inc. for Consent to Assign Licenses and Transfer Control of Licenses, Memorandum Opinion and Order, 26 FCC Rcd 4238 ¶ 41 (2011) (“NBCUniversal Order”).

73 See Press Release, Am. Cable Ass’n, Smaller Cable Companies, Larger Programmers Have Long Benefited From Buying Groups Like NCTC, (Mar. 24, 2014), http://www.americancable.org/node/4718.

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such as Google reportedly did when it purchased existing infrastructure and equipment in Provo, Utah for one dollar ($1).74 The cost of building or acquiring distribution systems would vary based on the type of system involved (e.g., DBS or cable). Costs would also depend on the size of the geographic area and number of subscribers a new entrant intends to serve and other factors such as population density.

A new MVPD would also need to acquire the rights to distribute video programming. These acquisition costs would depend on whether the MVPD planned to develop new programming or use programming from existing content providers. Programming costs would also depend on the amount of programming (i.e., number of channels) an MVPD intends to carry. Some programming networks may cost significantly more than others depending on their perceived quality or popularity with subscribers; others cost very little or are free and survive primarily on advertising revenue. A new MVPD could choose to negotiate these contracts directly or could save costs by negotiating through a Bargaining Agent, such as the NCTC. Accordingly, overall programming costs would depend on the mix of networks an MVPD decides to carry.

Other costs associated with providing MVPD services include costs of maintaining and operating systems, marketing, and regulatory costs. Marketing costs will be affected by the types of marketing efforts used, such as call centers, direct mail, online display advertising, television advertising, or door-to-door marketing.

MVPDs also must comply with various regulatory requirements. For example, cable MVPDs must obtain a franchise agreement from the local or state government. DBS providers must obtain satellite licenses from the FCC. The costs associated with obtaining and maintaining cable franchises may vary by locality, as may the cost associated with obtaining and maintaining a DBS license.

b. Number of Subscribers and Advertisers Needed to Break Even

The number of subscribers and advertisers needed to break even also depends on the overall fixed and variable costs associated with operating an MVPD system. Throughout the nation, there are numerous viable MVPDs that compete in the marketplace today with relatively few subscribers (some fewer than one thousand). The time required to break even also will depend on costs, as well as a number of other factors such as an MVPD’s pricing strategy, marketing efforts, other competitors in the market, etc. To the extent an MVPD offers other non-video services over the same network as its video services – e.g., broadband Internet, voice, technology solutions and equipment – as many currently do, revenue from those other services will help defray costs and accelerate the time it takes the MVPD to break even.

74 Angela Moscaritolo, Report: Google Buying Provo Fiber Service for $1, PC Magazine, Apr. 19, 2013, http://www.pcmag.com/article2/0,2817,2417966,00.asp.

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2. OVD

a. Minimum Viable Scale Necessary for Entry

The minimum viable scale necessary for entry in the OVD market is a function primarily of programming cost, content delivery cost, marketing, and revenue strategy, none of which can be predicted in the abstract.

An OVD must provide or create program content, aggregate the content, transport the content to the viewer, provide navigation tools to the viewer, and market the service. Whatever the long-run minimum viable scale, the requirements for distributing video online can be minimal.75

Basic online programming entry requirements do not include costly tangible assets, such as the construction of new facilities. An OVD’s major assets are programming rights to distribute content over the Internet and potentially networking and hosting equipment, all of which can readily be obtained from numerous third parties. Specifically, the provision of OVD services requires developing a programming concept, obtaining the rights to distribute or creating programming, obtaining the needed technology to aggregate and then distribute the programming on the Internet (e.g., servers), creating an operational infrastructure, promoting and marketing the OVD service, and arranging for advertising sales (if the service is to be supported in whole or in part by advertising). Each of these steps can be accomplished in a number of ways, and the costs and time required to accomplish each step necessarily depend on the specific characteristics of the proposed service. In all cases, it is possible to obtain from third parties that specialize in the distribution of content on the Internet (e.g., Amazon Wholesale Services, Akamai, Limelight) the resources necessary to distribute video online, and in some cases, OVDs have launched simply by starting to post videos on servers accessible through the Internet. There are no significant regulatory barriers affecting entry into OVD services.

The capital required to create OVD services for professional content depends on the costs of obtaining video programming, which will in turn depend on factors such as whether the service intends to use existing programming to meet a significant portion of its needs or to develop entirely new programming. The costs of obtaining video programming also will largely depend on whether the OVD seeks exclusive rights to programming and the age of the content. An OVD service’s cost structure will be affected by the scale of its entry, including the number of hours of video it intends to distribute, the quality and length of the videos distributed, and the frequency with which it plans to update its content. The cost structure may also vary based on whether the entrant is already participating in a related line of business and thus is able to share some of the costs of creating and operating the OVD service. Because of the array and complexity of these

75 FCC Commissioner Mignon L. Clyburn noted that Rowdy Orbit IPTV, an online platform featuring professionally produced original programming for minority audiences, was launched with an initial investment of only $526. See Remarks of Commissioner Mignon L. Clyburn, FCC, at the MMTC Broadband and Social Justice Summit (Jan. 22, 2010), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-295888A1.pdf.

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variables, Comcast is unable to offer any specific estimate of the total capital required for entry into the OVD market.

b. Number of Subscribers and Advertisers Required to Break Even

OVDs currently offer advertising-supported, transaction-based, or subscription-based services – or some combination of those models. The time required to break even will depend on the service’s costs and revenues.

With respect to costs, costs of acquiring programming vary widely based on the number, breadth, and quality of programs acquired. Similarly, the cost of distributing programming fluctuates based on the number of simultaneous customers a distributor hopes to serve and the bandwidth and hardware necessary to do so.

For advertiser-supported OVDs, it is not possible to predict the number of advertisers required for a particular OVD to break even, given that this number would necessarily be highly variable, as it is a function of the highly variable costs and revenues. Some OVD providers have few advertisers that pay more to sponsor longer content, others have many advertisers that pay less for frequently changing banner advertisements, while still others utilize a combination of both.

It would be similarly difficult to predict the number of subscribers (and advertisers, if applicable) necessary to break even for a subscription-based OVD service, due to the significant variables on both sides of the break-even equation. In addition to the factors mentioned above regarding how advertising revenue and programming costs are variable, so too are subscription revenues, which would differ depending on the business model of the particular OVD. Subscription revenues could depend on the type of product offered, including the number and breadth of programming options, whether advertisements would still be shown, and the typical subscriber consumption profile (i.e., whether a subscriber watches 10 hours per month or 10 hours per week). And some subscription-based OVD services (e.g., Netflix) do not feature advertising at all.

B. Video Programming Production

1. Minimum Viable Scale Necessary for Entry

Minimum viable scale is a function primarily of programming cost and marketing cost, each of which, in turn, depends upon the particular programming concept and delivery method chosen (e.g., linear networks, video on demand, online a la carte) and as a result cannot be predicted in the abstract. Because of the array and complexity of these variables, as described below, Comcast is unable to offer any specific estimate of the total capital required for entry into video programming services.

Launching a new linear network for MVPD distribution has three primary components: program content, infrastructure, and distribution. Specifically, in order to launch a new linear programming service, a programmer must develop a programming concept, create

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and/or obtain programming, obtain a method to distribute the programming to affiliates (such as uplink capacity and transponder space for satellite delivery of the programming), negotiate distribution agreements with affiliates, promote and market the programming service, arrange for advertising sales (if the service is to be supported in whole or part by advertising), and create an operational infrastructure. Each of these steps can be accomplished in a number of ways, and the costs and time required to accomplish each step depend very much on the specific characteristics of the proposed programming service. In all cases, however, it is possible to obtain from third-party sources the assistance necessary to satisfy each such requirement, and there are few if any regulatory barriers affecting entry into programming services.

Many of these same steps are required for providing video programming services via online distribution, as the provider still needs to take the steps necessary to create a video product, but no longer has the additional requirement of negotiating distribution agreements with MVPDs. Depending on the exact nature of the online product, it would likely be necessary to negotiate advertising sales and/or develop a subscription-based web service in order to recoup revenue. As discussed in the response to Request 44, some new video programmers may choose to create their own website for distributing video content online. Other video programmers may decide to license content to existing OVDs or to upload content to a service such as YouTube (or to even create their own YouTube channel). Producers of video programming increasingly have a choice as to whether to attempt to gain distribution on a linear network (and ultimately an MVPD), as a standalone program available on demand through MVPDs or via an OVD programmer (as in the case of original programming appearing on Netflix such as House of Cards or Orange Is the New Black), or some combination of the two.

In general, the minimum viable scale of on-demand programming, whether delivered online or via an MVPD, is likely to be lower than that of a new linear network because there is not a need to provide the same number of hours of programming and because the programming does not necessarily need to appeal to a wide audience. Due to changes in consumer habits, the desire for “on-demand” programming, whether delivered online or through an MVPD, has risen dramatically in recent years, as reflected in the popularity of on-demand streaming services such as Netflix, devices such as DVRs, and VOD offerings of MVPDs. Meanwhile, the costs to produce and distribute at least some types of on-demand programming have decreased substantially, especially for on-demand programming online. Uploading video programming to a website like YouTube can be a relatively low-cost endeavor, depending on the nature of the programming. For example, with a relatively low initial investment and small scale, a standup comedy routine created and uploaded to YouTube may generate significant viewership.

The scale of a programming services entry affects its cost structure as well. For example, as discussed above, a 24-hour-per-day linear cable channel will typically have a different cost structure than an on-demand online video product. The capital required for entry into the provision of video programming services depends very much on the specific type of video programming service to be provided. Creating and distributing online video

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products through services such as YouTube or Facebook has a relatively low cost to entry (depending on the production quality) compared to launching a new linear cable network. Whether the entrant is already participating in a related line of business (and thus is able to share some of the costs of creating and operating the programming service), is also relevant to its cost structure. For example, as discussed in the response to Request 44, varied businesses such as sports leagues, consumer electronics manufacturers, and retailers are beginning to create video products.

Basic programming entry does not require costly tangible assets, such as the construction of new facilities. A linear cable network has assets such as program license or transponder and fiber rental agreements; such agreements can be structured so that the unused portions of licenses or rentals can be resold upon exit. Cost of entry includes the cost of initial operating losses, which are often incurred while setting up distribution and acquiring content. If a video programming business exits before it reaches the break-even point, it may still be able to recoup its initial operating losses by selling its business either to another entrant or to an existing service. The buyer may either maintain and attempt to improve the performance of the existing format, or it may decide to change it.

2. Necessity of Carriage on a Particular Distributor

Given the numerous outlets and means for the distribution of video programming, programmers have more ways than ever before to distribute their programming and recoup their costs. Thus, programmers are not reliant on distribution of a new video programming service by a particular MVPD or OVD.76 This fact is underscored by the fact that programmers willingly enter into exclusive distribution arrangements with various MVPDs and OVDs. For example, DBS companies have a number of exclusive arrangements with certain programmers that have desirable programming.77 Similarly, some OVDs have exclusive agreements to carry popular content in certain windows.78

Numerous programmers seek to launch linear networks on MVPDs each month, and distributors are always seeking content that may be of interest to their subscribers. Moreover, OVDs are continuing “to expand the amount of content available to

76 See Comcast Corp. v. FCC, 579 F.3d 1, 8 (D.C. Cir. 2009) (observing that the video marketplace has changed significantly in the past 20 years and that cable operators “no longer have the bottleneck power over programming” given entry by other MVPDs and the ability to distribute content over the Internet).

77 See id. at 6, 8. Furthermore, many programmers have thrived with relatively low numbers of subscribers. See Letter from Helgi C. Walker, Wiley Rein LLP, Arthur J. Burke, Davis Polk & Wardwell, and Michael H. Hammer, Willkie Farr & Gallagher LLP, Counsel for Comcast Corp. to Marlene H. Dortch, Secretary, FCC, MM Docket No. 92-264 (Apr. 4, 2007), available at http://apps.fcc.gov/ecfs/document/view?id=6519107965.

78 See, e.g., Todd Spangler, HBO Cuts Exclusive Licensing Deal with Amazon, Variety, Apr. 23, 2014, http://variety.com/2014/digital/news/hbo-cuts-exclusive-licensing-deal-with-amazon-1201161895/; Ryan Lawler, Netflix Strikes Streaming Deal With Disney, Gains Exclusive Access To New Titles Beginning in 2016, TechCrunch, Dec. 4, 2012, http://techcrunch.com/2012/12/04/netflix-disney/; David Goetzl, Netflix, AMC Cut Deal For Exclusive Streaming Rights, MediaPost, Oct. 7, 2011, http://www.mediapost.com/publications/article/160111/netflix-amc-cut-deal-for-exclusive-streaming-righ.html.

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consumers” both with original programming and agreements with traditional video programmers.79 Mutually beneficial relationships between programmers and programming distributors may be established in various ways. Video programmers, for example, may promote carriage of new cable television networks by offering MVPDs financial incentives such as launch fees or launch support, foregoing affiliate fees for a certain period, providing a share of national advertising revenues to the operator, or, in the case of programming that includes home shopping components, by offering a share of merchandising revenues. Video programmers may also promote carriage of new video cable television networks by offering incentives to MVPDs in the form of the ability to insert local advertisements (known as local ad avails), marketing and promotional support, and revenue sharing. Some services are also able to obtain carriage of new programming because their “brand” identity provides assurances to distributors of the quality of their offerings. Additionally, programmers may seek to promote carriage of new cable television networks by offering lower affiliate fees on more established networks to MVPDs that agree to carry the new networks.

Obtaining carriage is only one element of the successful launch of a new linear programming service. Success also depends on gaining consumer awareness and viewership, which leads to advertising revenues. Video programmers may seek to generate consumer awareness and viewership in a number of ways, including advertising, cross-promotion, and distribution on both MVPDs and OVDs. Additionally, the likelihood of successful entry is not necessarily dependent on a service’s entry costs. Although a higher-cost service may be able to command higher affiliate fees and achieve higher ratings and associated advertising revenues, low-cost, niche content may be an attractive addition to an MVPD or OVD programming package.

Notably, distribution of video programming services online does not require carriage on any distributor; the video programmer is able to distribute its programming on its own using the Internet. As noted in the response to Request 44 above, a number of programmers have launched their services on their own online, including movie studios, sports leagues, and even individuals like Glenn Beck, Louis CK, Sarah Palin, and Jeffrey Hayzlett.

3. Number of Subscribers and Advertisers Required to Break Even

The time it takes for a new service to break even depends in large part on the appeal of its programming concept to consumers, its costs, and the objectives of the entrant. For some basic services, high penetration is particularly desirable.80 However, other basic services (similar to special-interest magazines) aim at a niche audience, one which its target advertisers want to reach, and may be able to break even with a smaller subscriber base.

79 Fifteenth Video Competition Report ¶ 9.

80 Entrants who provide such services may be able to achieve high penetration by initially building an audience through television VOD or online distribution. See infra response to Request 44.

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The same is true for services that provide, for example, sports-only programming, multicultural content, or programming based on emerging technology.

It is not possible to predict the number of advertisers required to break even, given that this number would be a function both of costs of establishing advertising relationships, which are highly variable, and the amount each advertiser pays, which also could be highly variable depending on the demographics reached by the service.

Comcast’s response to subpart (a) with respect to video programming would vary based upon the type of video programming involved. For example, there are higher costs associated with licensing certain content, such as live, premium sporting events, than with licensing other content.

C. Internet Access Services

1. Minimum Viable Scale Necessary for Entry

The minimum viable scale necessary for entry in the Internet access services market is a function of several factors, including network infrastructure costs, interconnection costs, marketing costs, and regulatory costs. Accordingly, minimum viable scale necessary for entry cannot be predicted in the abstract.

A new Internet access service provider will need to make fixed-cost investments to begin providing services. For example, an Internet access service provider must acquire equipment for connecting subscribers’ premises to the Internet. Access can be provided by coaxial cable, fiber-optic cable, digital subscriber line (“DSL”) over traditional telephone wires, a combination of fiber-optic cables and DSL, satellite, and fixed or mobile wireless. An Internet access service provider seeking to enter the market could either build new systems or acquire existing systems.

The cost of building or acquiring distribution systems would vary based on the type of system involved. For example, a new provider offering service via fiber-optic cables would have to acquire cables and incur costs deploying the cables in a potential new service area. A new provider offering service via satellite might have to acquire and launch a new satellite. A new provider offering service via fixed or mobile wireless would have to acquire the rights to use a band of wireless spectrum and provide equipment to subscribers to receive the wireless signal. Costs would also depend on the size of the geographic area and the number of subscribers a new entrant intends to serve, and other factors such as population density.

Internet access service providers must also acquire Internet backbone services to connect their subscribers to the rest of the Internet. An Internet access service provider may purchase transit service from a third-party provider or may seek to interconnect directly with other Internet access service providers or Internet content providers. The cost of transit or other Internet backbone services is a function of a variety of market forces. (In

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general, the cost of transit service has decreased dramatically over time.81) The cost of other Internet backbone services, such as peering, also depends on the prevailing cost of transit service.

A new Internet access service provider could also face regulatory costs. As discussed above, a provider offering service via fixed or mobile wireless would have to obtain the rights to use wireless spectrum via licenses or other regulatory authorizations. Providers offering a wireline service may have to obtain permission to use the public rights-of-way from the local government.

Because of the number and complexity of the variables affecting the costs of providing an Internet access service, Comcast is unable to offer any specific estimate of the total capital required or the minimum viable scale necessary for entry into the market for Internet access services.

2. Number of Subscribers Needed to Break Even

The number of subscribers needed to break even also depends on the overall fixed and variable costs associated with operating an Internet access services system. It is expected that a new service will take a number of years to break even; the number of years required will in turn depend on the service’s costs. These costs in turn depend on a variety of factors (discussed above). To the extent an Internet access service provider offers other services over the same network as its Internet services – e.g., multichannel video programming, voice, technology solutions and equipment – as many of them currently do, revenue from those other services will help defray costs and accelerate the time it takes the provider to break even.

D. Internet Edge Providers82

1. Minimum Viable Scale Necessary for Entry

The minimum viable scale necessary for entry in the Internet access services market is a function of several factors, including what services they were intending to provide, marketing costs, and regulatory costs. Accordingly, minimum viable scale necessary for entry cannot be predicted in the abstract.

2. Number of Subscribers Needed to Break Even

The number of subscribers required for an Internet edge provider to break even depends on many of the variables discussed above. Furthermore, many services and content provided over the Internet are not offered on a subscription basis at all. For example, as

81 See Vytautas Valancius, et al., How Many Tiers? Pricing in the Internet Transit Market, 2011 ACM SIGCOMM 194 (2011) (stating that “on average, transit prices are falling by about 30% per year”).

82 OVD service is discussed above in under Video Programming Distribution.

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discussed with regard to OVDs above, an Internet edge provider may earn revenue through advertisements while Internet gaming online may be a complement to sales of video game hardware rather than a source of subscription revenue. Therefore, it is not possible to predict the number of subscribers required to break even in the abstract.

E. Internet Backbone Services

1. Minimum Viable Scale Necessary for Entry

The minimum viable scale necessary for entry in the Internet backbone service market is a function of several factors, including infrastructure costs, maintenance and upgrades, and interconnection costs. Accordingly, minimum viable scale necessary for entry cannot be predicted in the abstract.

A new Internet backbone service provider may need to make significant fixed-cost investments to begin providing services. For example, an Internet backbone service provider would need to acquire fiber-optic Internet backbone networks or utilize current dark fiber capacity for connecting customers’ networks to the rest of the global Internet. The providers would also need to acquire backbone ports for providing interconnection links, and could either purchase new ports and equipment or acquire an existing providers’ equipment. Internet backbone ports are typically housed in large, carrier-neutral facilities owned and operated by companies such as Equinix. There are several such facilities in cities across the United States. An Internet backbone service provider would need to purchase space in a facility and pay for power to run its ports, as well as purchase cable for cross-connecting ports to interconnection counterparties.

The variable costs associated with providing Internet backbone services are a function of several factors. Internet backbone service providers must acquire new backbone ports to meet increasing traffic demands. Internet backbone service providers must also continually monitor capacity and traffic, provide technical support staff to resolve outages, and potentially pay for transit or peering services with other networks. Internet backbone service providers generally benefit from interconnecting with other Internet backbone networks because doing so allows them to send traffic over more routes and provide more efficient service. For example, it might be more efficient for an Internet backbone service provider to send traffic through another Internet backbone service provider that has more capacity in an area that is physically close to the destination of the traffic rather than carrying the traffic over its own network.

In some cases, an Internet backbone service provider may seek to peer with other networks on a settlement-free basis in which exchange of traffic serves as consideration for access to each network. In other cases, Internet backbone service providers may purchase transit or pay other Internet backbone providers for direct interconnection. Settlement-free interconnection would impose costs such as those associated with maintaining and upgrading the network to adequately handle the traffic exchange. The cost of other interconnection services may vary based on supply and demand forces,

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improving technology, and changes in Internet traffic patterns to and from the networks to which the Internet backbone service provider provides services.

Because of the number and complexity of the variables affecting the costs of providing an Internet backbone service, Comcast is unable to offer any specific estimate of the total capital required or the minimum viable scale necessary for entry into the market for Internet backbone services.

F. Content Delivery Networks

1. Minimum Viable Scale Necessary for Entry

The minimum viable scale necessary for entry into the provision of CDN service is a function of several factors, including infrastructure costs, maintenance and upgrades, and interconnection costs. In general, many of the same the factors, including many of the same facilities, affecting the minimum viable scale necessary for an Internet backbone service provider described above also apply to a CDN. Generally, CDNs pay for transit or peering given the one-way direction of their traffic. On occasion, especially with smaller providers, CDNs may arrange for settlement free peering because the smaller provider may otherwise have to pay for transit.

Because of the number and complexity of the variables affecting the costs of providing a CDN service, Comcast is unable to offer any specific estimate of the total capital required or the minimum viable scale necessary for entry into the market for provision of CDN service.

15(ii):

Documents responsive to this subpart will be produced to the FCC.

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16.

Produce all documents (except engineering and architectural plans and blueprints) discussing any plans of the Company or any other person for the construction of new facilities or equipment, the closing of existing facilities, or the expansion, conversion, or modification (if such modification has a planned or actual cost of more than $1 million) of current facilities for providing each relevant service in each relevant area.

RESPONSE:

Documents responsive to this request will be produced to the FCC.

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17.	For each relevant service, standalone services and bundled services, produce (i) one copy of all current selling aids and promotional materials and (ii) all documents relating to advertising plans and strategies.

RESPONSE:

Documents responsive to this request will be produced to the FCC.

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18.	Identify each non-broadcast programming network owned by, operated by, managed by, or attributed to the Company, by stating the information requested by the subparts to this Request, and provide the date and details of any changes to that information:

the nature and percentage of the Company’s ownership interest;

the identity of and percentage owned by each other person who holds an attributable interest;

the date the network was launched, and if acquired from another entity, the date the network was acquired and from whom the Company acquired its ownership interest; and

the nature and extent of the Company’s role in management, including whether the Company has any board representation, management rights, voting rights, and/or veto power supermajority or other investor protections.

RESPONSE:

18(a)-(d):

Information and data responsive to these subparts have been provided as Exhibits 18.1(a)-(b). Exhibit 18.1(a) is a table incorporating the requested information for the non-broadcast cable networks, as well as broadcast networks, NBC and Telemundo (which are listed separately). The months in which ownership and other changes occurred are noted; otherwise they remained constant. Exhibit 18.1(b) is a spreadsheet that provides ownership interests of both Comcast and third-party owners (if any) of these networks on an annual basis.

Comcast also owns 100 percent of and manages the following non-sports, regional networks (year of launch in parentheses): CTV (Michigan) (2008); Hoosier TV (2008); Comcast Hometown Network (CHN) (2009); C2 (2002); CN100 (200883); Comcast Entertainment Television (CET) (2004); Utah 6 (2007); and WNFM-TV (Naples, FL) (1995).

83 Reflects its launch as CN100.

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19.	For each non-broadcast programming network identified in response to Request 18, state separately, and produce in CSV or Excel format, for each month from January, 2009, to the present:

the identity of any MVPD that carries the network, and for each MVPD state (1) the total and per subscriber license fee paid by the MVPD to the Company, (2) the total number of the MVPD’s subscribers that receive the network, (3) the number of minutes per hour granted to the MVPD for local advertising sales and (4) the tier on which the network is carried;

for all MPVDs carrying the network, state (1) the total per subscriber license fees and average per subscriber license fees paid by all MVPDs to the Company, (2) the total number of MVPD subscribers that receive the network, and (3) the average number of minutes per hour granted to MVPDs for local advertising sales;

the average gross advertising revenue per subscriber and the average net advertising revenue per subscriber and an explanation of how these values were calculated; and

the identity of each OVD, including but not limited to Apple, Amazon.com, Google, Netflix, Hulu, and the Company that publishes, sells or distributes, in whole or part, content produced or distributed by the non-broadcast programming network, and the total fees paid each year by the OVD to the Company for the right to distribute such programming.

RESPONSE:

19(a-b):

Information and data responsive to these subparts have been provided in machine-readable Excel spreadsheet format as Exhibits 19.1-19.3 (and subparts).

Exhibits 19.1(a)-(b) provide the total number of subscribers (as well as specifically delineated for each of the top 25 MVPDs) who receive each network on an annual basis. Exhibit 19.1(a) provides this primarily for certain national networks with a monthly average number of subscribers for the year in question; 19.1(b) provides this for other networks (primarily Regional Sports Networks) by providing the year-end number of subscribers for the year in question. Exhibit 19.1(c) provides the number of subscribers for the networks referenced in Exhibit 19.1(a) in months around changes in Comcast’s ownership interest in the networks. (Exhibit 19.1(b) provides the same monthly information.)

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Exhibits 19.1(b) and 19.2(a)-(b) provide subscriber revenues received from MVPDs that carry each programming network. Exhibit 19.2(a) provides the revenue received from MVPDs (specifically delineated for the top 25 MVPDs) on an annual basis for the networks addressed in Exhibit 19.1(a). Exhibit 19.2(b) provides the subscriber revenue for the networks addressed in Exhibit 19.2(a) for certain months around changes in Comcast’s ownership interest. In addition to providing subscriber information, Exhibit 19.1(b) provides subscriber revenue information, including information specifically delineated for the top 25 MVPDs, primarily for Regional Sports Networks.

Exhibits 19.3(a)-(b) provides subscriber revenue in terms of revenue per subscriber for the national networks addressed in Exhibits 19.2(a)-(b). Exhibit 19.3(c) provides this same information primarily for Regional Sports Networks for both in-market subscribers and, where different, total (including out-of-market) subscribers. ({{ }})

As is relevant to Exhibits 19.1-19.3 (and subparts), Comcast provides the following additional explanation.

The information as presented here reflects how this information is maintained and recorded in the ordinary course of business and Comcast believes these Exhibits reflect the most accurate information it is able to provide. As fees for most networks are based on the number of subscribers to whom programming is delivered and subscriber figures are typically in flux, such fees accrued in any given month will on occasion reflect adjustments based on over- or under-payments in past months, or other adjustments based on prior billings. As is noted in Exhibit 19.3(a), for a limited number of networks (in certain years), the annual information is based on partial billing years, usually due to the network only airing for a partial year. (In such instances, the monthly per subscriber rates displayed in Exhibit 19.3(a) reflect the months for which billing occurred.)

Prior to the third quarter of 2012, network subscriber and revenue information with regards to Bright House Networks was not tracked separately from the information tracked for TWC. Beginning in the third quarter of 2012, information for Bright House Networks was tracked separately.

Typically, the high-definition feed of a network is delivered as part of a contractual package with the standard definition feed; when that occurs, subscribers and revenue are not recorded separately for the high-definition and standard-definition feeds. High-definition subscribers are separately recorded in these Exhibits (and in the ordinary course of business) only to the extent that they reflect separate revenue specific to the high-definition feed.

The entry for “Olympics” does not refer to a specific network. Rather, this refers to a surcharge that MVPDs pay in order to receive Olympic coverage on the Comcast/NBCUniversal cable networks that carry the Olympics.

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Comcast owns broadcast networks, including NBC and Telemundo. To the extent that there are no retransmission fees associated with the network as to a particular MVPD, subscribers are generally not tracked for these broadcast networks on that particular MVPD. Subscribers and affiliate revenues are tracked separately to the extent that such broadcasters have retransmission fees associated with the network. Information regarding these broadcast networks are included with the non-broadcast networks here; such information is also responsive to Request 37.

Certain entries on these Exhibits, such as “WNBC,” refer to a specific broadcaster of a programming network owned by Comcast, such as NBC. Such information may also be responsive to Request 36.

Telemundo and Telemundo Retrans are listed separately; the former is a national cable network, while the latter is a local broadcast network with some (though not all) duplicative content.

Comcast provides the following information in response to subpart (a)(3) and (b)(3). Networks generally provide all MVPDs with the same advertising availabilities, which do not generally change year-to-year. The advertising availabilities provided by Comcast networks to MVPDs are as follows: {{ }}

For certain Regional Sports Networks (CSN California, CSN Northwest, and SportsNet New York), due to rights restrictions, there are currently different advertising availabilities provided in-game than during the remaining programming. (The advertising availabilities provided above are the standard, non-game advertising availabilities for these three networks.) {{ }}

In response to subpart (a)(4), Comcast does not track the programming tier on which its networks are carried in the ordinary course of business. (Comcast instead tracks the subscriber totals, which are provided in Exhibits 19.1 and subparts.)

Comcast does not have custody or control of information sufficient to respond to part or all Request 19 with respect to Midco Sports, Pittsburgh Cable News, TV One, Saigon Broadcasting Television Network, and The Weather Channel, which are video programming networks in which Comcast holds non-controlling interests, does not manage, or otherwise lacks the relevant information to answer.

19(c):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibits 19.4(a) (reflecting net advertising revenue per subscriber per network) and 19.4(b) (reflecting gross advertising revenue per subscriber per network).

Comcast notes that these metrics are not kept or used in the ordinary course of business by Comcast, or, as far as Comcast is aware, by the industry generally. Comcast has

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calculated these figures for Exhibit 19.4(a) (reflecting net) by dividing the annual net advertising revenue for each network by 12 (in order to convert to a monthly figure) and then dividing that figure by the monthly subscribers for the corresponding year. Annual gross advertising revenue per subscriber is provided in 19.4(b) and is calculated in a parallel manner. [[ ]]

19(d):

In response to subpart (d) of this Request, information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibits 19.5(a)-(d). Exhibit 19.5(a) provides a list of OVDs to whom Comcast/NBCUniversal has licensed video programming (along with associated revenue on an annual basis and in certain quarters surrounding ownership changes). Programming is not licensed to OVDs on a network-by-network basis, but rather on a studio basis. Therefore the titles that are licensed to OVDs generally do not correspond to the full programming slates of particular networks (whether a broadcast network or a cable network), but rather consist of specific programs of particular networks, as well as movie titles that may not necessarily have appeared on television. (Revenue from licensing is obtained through both television and movies.) Exhibit 19.5(b) (certain streaming OVDs) and 19.5(c) (certain electronic sell through OVDs) provide the programming titles (television and film) available to certain of these OVDs on an annual basis to the extent such data are kept.

Comcast/NBCUniversal has also licensed programming to wireless providers. A list of the wireless providers (which may be considered for these purposes to function as OVDs) to whom Comcast/NBCUniversal have licensed video programming is provided at Exhibit 19.5(d). This Exhibit also provides, for the wireless providers for which it is available, the average number of monthly subscribers during a year. The video programming licensed to wireless providers is generally a package of linear networks, usually including the NBC broadcast network, and on-demand programming for which Comcast/NBCUniversal has charged a fixed rate or a per subscriber rate.

Comcast generally notes that short clips or highlights of programming appearing on Comcast-owned networks may be shown online, generally serving as promotional material, by additional online outlets. Comcast further notes that some of the MVPDs listed in Exhibit 19.1 (and subparts) to whom its networks have licensed programming have the right to display some or all of that programming online, depending on the precise contractual arrangement. Comcast’s response to subpart (d) focuses on long-form programming that is licensed to OVDs for viewership.

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20.

Produce all agreements between the Company and any other person relating to the carriage, licensing, or distribution of any video programming owned by or controlled by the Company, and all documents relating to each negotiation since January 1, 2009, between the Company and any (i) MVPD, and (ii) OVD for video programming, regardless of whether or not the negotiations resulted in a contract (formal or informal). Exclude any documents related to the Project Concord, Inc. v. NBCUniversal Media, LLC proceeding.

RESPONSE:

Documents responsive to this request will be produced to the FCC.

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21.

Identify each instance where an MVPD has discussed raising, threatened to raise, or has raised, a program access complaint as a means to obtain the right to distribute the Company’s non-broadcast programming, including via VOD and PPV, and separately for each type of non-broadcast programming network (i.e., standard or high definition), describe:

the nature of the dispute or issue;

the persons involved in the dispute; and

how and whether the dispute or issue was resolved. To the extent the dispute was settled, explain whether the settlement required the Company to provide program access to the complaining party, and produce all documents relating to each instance identified, and any settlement thereof.

RESPONSE:

Comcast has been involved in numerous program access negotiations during the relevant time period. Although it is possible that a party may have generally referenced or discussed the program access rules in negotiations, Comcast has reviewed its records to identify any program access complaint and any pre-filing notices of a potential program access complaint over this time period. Comcast has identified only the single instance described below.

In December 2009, WaveDivision Holdings, LLC, Horizon Cable TV, Inc., Stanford University, and the City of San Bruno, California, jointly filed a program access complaint seeking to reverse certain changes to the professional sports programming on Comcast SportsNet Bay Area and Comcast SportsNet California, in addition to other relief. Complainants alleged that the realignment of programming on those networks was an unfair practice, that the networks discriminated against Complainants in the price and certain other terms of carriage, and that Comcast Corporation unduly influenced the programming changes. The Comcast entities named in the complaint denied these allegations and asked for dismissal of the action. After an initial conference with the FCC, the proceeding was settled in late 2010 and the complaint was dismissed with prejudice by the FCC in January 2011. Because Complainants already carried the programming at issue, the settlement did not require the Comcast entities to provide program access.

Responsive materials have been provided as Exhibits 21.1-21.4. Additional documents responsive to this request will be produced to the FCC.

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22.

Identify each agreement the Company has entered with another person through which the Company licenses another person to distribute the Company’s broadcast or non-broadcast video programming , that contains any of the following provisions: (i) any economic or non-economic Most-Favored-Nation clause; (ii) any exclusive rights to distribute the programming; (iii) any limits on the further distribution of the programming that is the subject of the agreement either temporally, such as through the use of “windows,” or by another person or class of similar persons; (iv) any limits on the further distribution of the programming on another platform; and (v) any rights to obtain, or limits on distribution of, additional programming whether or not such programming was in existence at the time the agreement was entered; and (vi) any other provision that impacts the way that the programming is distributed or made available to other distributors, and for each such agreement state:

the parties to the agreement;

the date of the agreement;

the term of the agreement;

a description of the provision;

the date that any party to the agreement exercised any rights or received any benefits from any of the provisions set forth in parts (i) through (vi) of this Request; and

a description of any actions taken or benefits received as a result of any of the provisions set forth in parts (i) through (vi) of this Request.

RESPONSE:

NBCUniversal seeks broad distribution of its programming. To that end, {{ }} Nonetheless, on some occasions, {{ }}

Stated broadly, MFN provisions generally require NBCUniversal to provide the MVPD with the benefit of rights NBCUniversal may grant to other distributors.

ADM language generally {{ }}

Further, an NBCUniversal service {{ }}

An MVPD may also {{ }}

Although these provisions {{ }}, NBCUniversal has only agreed to restrictions and conditions that it believes are consistent with common and reasonable industry practice.

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For further information on particular agreements, Comcast refers the FCC to the text of the agreements themselves, which will be produced to the FCC.

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23.

In Section A of Appendix B of the Comcast-NBCU Order, the Commission used a methodology to calculate “critical departure rates” for both permanent and temporary foreclosure of programming. Using this or similar methodology, determine and state how the current transaction will affect critical departure rates for both permanent and temporary foreclosure, (i) separately for each of the NCBU O&Os, (ii) a bundle consisting of all non-broadcast programming networks distributed on a national basis in which the Company has an interest (or attributable interest) (iii) separately for each of the RSNs in which the Company has an interest (or an attributable interest). Describe in detail the methodology employed and produce the underlying data used to determine the various parameters used to calculate these critical departure rates, including but not limited to the profit margin on MVPD service subscribers, per subscriber license fees, per subscriber advertising revenue, departure rates, diversion rates, and churn rates. If the methodology is not identical to that employed in Section A of Appendix B of the Comcast-NBCU Order, describe in detail the changes made to that methodology.

RESPONSE:

In response to this request, Comcast refers to Exhibit 23.1, which was prepared by Cornerstone Research together with Dr. Greg Rosston. Backup data associated with this request will be produced to the FCC.

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24.

In Section B of Appendix B in of the Comcast-NBCU Order, the Commission used a methodology to calculate the magnitude of vertical price rises that would be caused by the transaction. Using this or a similar methodology, calculate the vertical price increases that will be caused by this transaction (i) separately for each NBCU O&O, (ii) a bundle consisting of all non-broadcast programming networks distributed on a national basis in which the company has an interest (or attributable interest), and (iii) separately for each of the RSNs in which the Company has an interest (or an attributable interest). Describe in detail the methodology employed and produce the underlying data used to determine the various parameters needed to calculate these price increases, including but not limited to the profit margin on MVPD service subscribers, the departure rates and diversion rates. If the methodology is not identical to that employed in Section B of Appendix B of the Comcast-NBCU Order, describe in detail the changes made to that methodology.

RESPONSE:

In response to this request, Comcast refers to Exhibit 24.1, which was prepared by Cornerstone Research together with Dr. Greg Rosston. Backup data associated with this request will be produced to the FCC.

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25.

In Section E of Appendix B in of the Comcast-NBCU Order, the Commission used a methodology to investigate whether Comcast favors its own networks and, to the extent this occurs, whether or not this is due to vertical efficiencies or foreclosure incentives. Using this or a similar methodology, provide an analysis of whether Comcast/NBCU favors its own networks and, to the extent this occurs, whether or not this is due to vertical efficiencies or foreclosure incentives. Describe in detail the methodology employed and produce the underlying data on which the analysis is based. If the methodology is not identical to that employed in Section E of Appendix B of the Comcast-NBCU Order, describe in detail the changes made to that methodology.

RESPONSE:

In response to this request, Comcast refers to Exhibit 25.1, which was prepared by Cornerstone Research together with Dr. Greg Rosston. Backup data associated with this request will be produced to the FCC.

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26.	Identify all sports teams, leagues, and other organizations with which the Company (or a network in which the Company has an attributable interest) has a contract granting distribution rights in the United States, and for each contract state:

the official name of the team, league, or organization, the sport played, and its home venue;

the term of the contract that grants the right to distribute the sports programming in the United States and whether the Company has a right of first refusal;

the geographic area in which the Company has rights to distribute the sports programming;

the percentage of total game events entitled to be distributed live under the contract, and the percentage of total game events which the live distribution rights are exclusive to non-broadcast programming networks or cable systems in which the Company has an interest;

any plans to begin distributing game events in the United States; and

whether the Company is currently distributing this sports programming on an attributable or non-attributable sports programming network.

RESPONSE:

Documents responsive to this request will be produced to the FCC. Comcast also incorporates its response to Request 27, below, which provides information on Comcast’s sports rights counterparties. Additional information responsive to this request will be provided to the FCC.

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27.

Provide a list of and produce a copy of all contracts or informal understandings, entered into since January 1, 2009, between the Company (or a network in which the Company has an attributable interest) and any marquee sports league which convey the right to distribute the league’s games or other content in the United States. Include any contract that allows for distribution as a part of any non-broadcast programming network in which the Company has an ownership, controlling or attributable interest, or as video programming on the Internet, whether distributed via MVPD or by an OVD, and all documents relating to negotiations of the contracts produced in response to this Request.

RESPONSE:

Documents responsive to this request will be produced to the FCC, [[ ]]. Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 27, which provides a list of agreements since 2009.

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28.	As of June 30, 2014, identify each RSN in which the Company has an ownership interest (or an attributable interest), and for each RSN identified, state:

the primary DMA in which the RSN is distributed;

the average license fee revenue per subscriber (excluding out of market subscribers);

the average gross and the average net advertising revenue per subscriber (excluding out of market subscribers) and an explanation of how these values were calculated;

the number of subscribers (excluding out of market subscribers) to the RSN, separately for each MVPD that distributes the RSN;

the number of Comcast, Charter, and SpinCo subscribers (excluding out of market subscribers) to the RSN, stated as if the proposed TWC transaction and the proposed divestitures transactions had been consummated on June 30, 2014; and

each MVPD that serves the DMA that does not distribute the RSN and the reason that the MVPD does not distribute the RSN.

RESPONSE:

28(a):

Comcast provides the following information in response to this subpart:

RSN	DMA(s)
CSN Bay Area	San Francisco-Oakland-San Jose
CSN California	San Francisco-Oakland-San Jose; Sacramento-Stockton-Modesto
CSN Chicago	Chicago
CSN Houston	Houston
CSN Mid-Atlantic	Washington, D.C.
CSN New England	Boston

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CSN Northwest	Portland
CSN Philadelphia	Philadelphia
SportsNet New York	New York City

28(b):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 28.1, which provides subscriber revenue on a per subscriber basis for in-market subscribers for June 2014.

28(c):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 28.2. As described in response to Request 19 subpart (c), Comcast notes that this is not a metric that is generally kept or used in the ordinary course of business by Comcast, or, as far as Comcast is aware, by the industry generally. Comcast calculated this total by (separately) taking the gross and net revenue for each of the networks over the 12 months prior to June 30, 2014, dividing that total by 12 in order to convert it to a monthly figure, and then dividing that figure by the number of in-market subscribers for the network as of June 30, 2014.

28(d):

In response to this subpart, Comcast refers to Exhibit 19.1(b), which provides June 30, 2014, subscriber figures (separately for in-market and out-of-market) for certain networks, including each RSN.

28(e):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 28.3. For each of the RSNs which will have subscribers affected by the transaction, Exhibit 28.3 provides the number of in-market subscribers that would be served by Comcast, Charter, and SpinCo. (For other RSNs, the figures provided in Exhibit 19.1(b) apply.) Comcast notes that these figures are being calculated based on Comcast’s best understanding of the current parameters of the transactions. Comcast further notes that it does not have knowledge of whether or how either Charter or SpinCo intend to carry these RSNs (or any other network) following the transactions.

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28(f):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 28.4, which provides the MVPDs that operate in each market referred to in response to 28(a) (to the extent that Comcast is aware of them) that do not carry the RSNs.

All MVPDs have the opportunity to carry the referred-to RSNs. To the extent that such MVPDs do not currently carry the RSNs, it is generally because the MVPD and RSN have been unable to reach mutually agreeable commercial terms of carriage. Comcast RSNs generally seek distribution from each MVPD in these DMAs. For certain larger MVPDs, Exhibit 28.4 also provides comments regarding relevant MVPD/RSN interactions.

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29.	For each channel of video programming that the Company obtained from another person, separately for each month from January 1, 2009 to the present, state:

the name and genre of each channel of video programming the Company obtained;

the number of the Company’s subscribers whose MVPD programming packages include each such channel;

the total and per subscriber fee paid by the Company for each such channel; and

the name and genre of each channel of video programming produced by each such person that the Company chose not to obtain and the reason(s) why the Company chose not to carry the channel.

RESPONSE:

Comcast provides the information below in response to this request. Comcast is interpreting “obtain[ing]” video programming as obtaining the right to distribute video programming on its cable systems rather than obtaining ownership interests in video programming channels.

29(a):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Comcast Exhibit 29.1. While “genre” categorizations are provided here in order to respond to this request, Comcast does not keep “genre” categorizations for each network in the ordinary course of business. Many networks’ programming slates are difficult to categorize and/or could easily be viewed as fitting into two or more different genre categories (e.g., HBO Español could be viewed as a foreign language channel or a movie channel).

29(b):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Comcast Exhibit 29.2.

As is relevant to Exhibits 29.2-29.4, the information contained here is provided in the manner that it is kept by the Comcast content acquisition department in the ordinary course of business. These exhibits do not reflect the actual names of network counterparties, but rather anonymized placeholders for confidentiality purposes. Comcast records costs accrued in a given month. As fees for most networks are based on the number of subscribers to whom programming is delivered and subscriber figures are typically in flux, such fees accrued in any given month often reflect adjustments based on

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over- or under-payments in past months, or other adjustments based on prior billings. [[ ]] Also included in Exhibits 29.2-29.4 are additional, [[ ]].

29(c):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Comcast Exhibits 29.3 and 29.4. Exhibit 29.3 provides total costs per network and Exhibit 29.4 provides costs per network per subscriber. The net effective rate per subscriber is provided in Exhibit 29.4 on the basis of calculating the total cost accrued in a month (provided in Exhibit 29.3) by the number of subscribers across whom that cost is accrued (provided in Exhibit 29.2).

29(d):

Documents responsive to this request will be produced to the FCC. Comcast also incorporates its response to Request 34, below, which provides information on negotiations between Comcast and video programmers. As indicated in that response, Comcast is not aware of any network with which it has engaged in substantive negotiations but then concluded definitely that it would not carry the network. Some negotiations are still ongoing.

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30.

Describe how the Company determines whether to carry a particular non-broadcast programming network on its own systems and in what geographic areas that network will be carried, including the extent to which carriage decisions are made at the corporate level or by an individual system manager (include the identity of specific decision makers), and factors considered by the Company in making its carriage decisions. Explain and provide examples of how the Company evaluates potential replacements for any non-broadcast programming network, including, but not limited to: (i) the geographic areas in which it will offer the replacement non-broadcast programming network; (ii) the metrics used; (iii) how the Company evaluates potential subscriber losses for not carrying a specific non-broadcast network in a market; and (iv) the factors considered when negotiating the terms and conditions of carriage.

RESPONSE:

Comcast strives to offer a wide variety of compelling content for its customers in various packages and at various price points, while also balancing financial costs, opportunity costs, consumer demand, and available bandwidth, among other considerations. Comcast has launched or expanded the carriage of dozens of unaffiliated networks in recent years by more than 50 million subscribers. Comcast carries over 160 independent networks, including many small, diverse, and international networks, and more than six out of seven channels that Comcast carries are unaffiliated.

While each carriage decision involves unique circumstances, Comcast typically considers a number of factors when making the business and editorial judgments that enter into carriage decisions. Comcast typically considers: (1) programming appeal (e.g., demonstrated viewer interest, and will the network help Comcast attract or retain subscribers); (2) cost (i.e., the network’s price and other economic terms); (3) network maturity (i.e., the network’s track record and management); (4) bandwidth constraints; and (5) how the programming fits within Comcast’s channel assortment (when comparing it to networks already carried in that particular market).

While affiliation agreements are negotiated primarily by corporate executives, carriage decisions about new cable networks are typically made in collaboration by executives in the field together with corporate executives within the Content Acquisition, Video Business Unit, and Marketing departments at Comcast Cable who can bring to bear their detailed experience and knowledge of the company and of the industry in applying the criteria set forth above. Content Acquisition executives frequently confer with divisional and regional executives regarding the subscriber demand for particular networks as well as cost and bandwidth constraints within the systems the divisional and regional executives manage. Corporate personnel at Comcast are involved in most decisions related to the carriage of new networks, including whether a particular network will be carried or not, the timing and extent of the launch of a network on Comcast systems, and the service tier on which a network is carried. Executives in the Content Acquisition

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department and in the field frequently meet with programmers to receive carriage proposals and updates on demand for their services.

In many cases, the Content Acquisition department negotiates what is called a “hunting license” with a particular network. In those situations, a master agreement is negotiated to set the general terms of carriage, but decisions about whether to carry that network are made at the local level. In other situations, the Content Acquisition department negotiates a carriage agreement that guarantees some initial linear carriage and allows for some flexibility about tier placement or expansion to additional subscribers. Typically, a Comcast region that wishes to add a network to one or more of its systems’ lineups, or to change a network’s distribution level, [[ ]].

Key executives involved in the carriage decision-making process include [[ ]].

Key Program Carriage Factors

Programming Appeal

Comcast considers network programming content and appeal to subscribers to be of critical importance when making carriage decisions. In assessing the desirability of adding (or expanding or reducing the carriage of) a particular network, Comcast takes into account the composition of its overall programming lineup and the impact of the network on Comcast’s overall ability to attract or retain subscribers.

As noted above, carriage decisions about new cable networks are typically made in collaboration by executives in the field together with corporate executives within the Content Acquisition, Video Business Unit, and Marketing departments at Comcast Cable. In this regard, Comcast does not generally use customer surveys or detailed analyses of potential substitute networks when making carriage decisions but instead relies on its division and system managers in the field – who are focused on knowing the needs of the subscribers they serve – to keep Comcast’s Content Acquisition group informed about customer interest in particular networks. But Comcast does use meaningful customer inquiries, churn and retention observations, and demonstrated viewer interest. Regarding the impact on Comcast’s ability to attract or retain subscribers, this process is not a precise science, but requires Comcast to make a business judgment weighing perceived subscriber interest and sentiment against cost, bandwidth constraints, and the availability of the content to Comcast’s customers via other platforms (which may make using Comcast’s bandwidth to offer such content a less compelling proposition). Moreover, Comcast is often required to decide between carrying competing networks that might both have loyal subscriber bases. Consequently, and as noted above, Content Acquisition executives frequently confer with divisional and regional executives regarding the subscriber demand for particular networks, as well as cost and bandwidth constraints within the systems the divisional and regional executives manage. In most discretionary carriage negotiations, Comcast also typically stays apprised of the extent to which other distributors carry the network – both those distributors that compete directly with

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Comcast as well as other large cable operators who face similar competitive pressures as Comcast.

Cost

Another key factor is cost – the typical cable channel business model generally involves the distributor (Comcast) paying the owners of the cable channels that the distributor carries. Consequently, Comcast must always assess the value of adding a given network to their channel lineups in light of the network’s price and other economic terms (e.g., tier position, launch commitments, long-term price inflators and protection). Perhaps the most critical economic element is wholesale programming cost – that is, how much it will cost Comcast to carry the network.

As a general rule, when negotiating with programmers, Comcast Cable seeks to obtain the lowest possible wholesale cost and greatest packaging flexibility so that it can provide attractive packages of programming at competitive prices. At its most basic level, the monetary cost of a carriage agreement for a given network is frequently the product of the license fee multiplied by the total number of subscribers who receive the network. A network’s total number of subscribers across Comcast’s systems is determined by some combination of (1) the number and breadth of systems distributing the network and (2) the level or package of service in which such systems offer the network. Thus, a network such as ESPN is generally offered on a highly penetrated tier to almost all of Comcast’s systems, whereas a less-widely distributed network might be carried on a less penetrated tier in certain systems and not at all in other systems. If a network has demonstrated its value in the marketplace, its distribution will tend to increase over time, as it is launched in additional systems and/or made available on more broadly penetrated tiers.

Network Management Team Maturity

Comcast also typically considers the track record of a network’s ownership or management team. A network launched by a company or management team that has previously successfully operated cable programming networks will often have a greater likelihood of long-term success. The experience and capabilities of a network’s management team affect how a network raises and manages capital, what programming the network creates or acquires, the level of talent it can attract, the soundness of its business plan, its ability to create an advertising business, and how the entire operation executes that plan.

Bandwidth

Bandwidth and engineering constraints are a significant factor affecting Comcast’s decisions regarding which networks it can carry and in which markets, and/or what format each channel is carried in (standard definition and/or high definition). Bandwidth constraints vary by system across Comcast’s footprint. Although Comcast has major initiatives underway to increase bandwidth, these efforts do not necessarily translate into extra bandwidth available for new channels in any given system. For example, in many

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Comcast systems, existing programming rights (including for example the right to launch an existing channel in HD) cannot be exercised due to bandwidth constraints. Where capacity is freed up, Comcast may opt to exercise these programming rights rather than launch new channels. Comcast also must weigh how much bandwidth to make available for video given the rapidly increasing levels of High Speed Internet (“HSI”) usage. Rather than launch new programming in a particular market, Comcast may opt to make bandwidth available to satisfy HSI demands.

If a system faces bandwidth constraints (which most of the Comcast systems do), it may be hesitant to add programming within genres that are already heavily represented in its programming lineup, absent a passionate fan base for the programming, or it may have to substitute out an existing network, again based on field managers’ assessment of the relevant subscriber interests, in order to launch a new or more desirable channel. And, even where a network is not asking for distribution on a highly-penetrated level of service, the same analysis has to be done because, for instance, it takes up the same amount of bandwidth on Comcast’s systems to add a network to the Sports and Entertainment package as adding a network that is distributed to all Comcast customers.

Programming Fit

In assessing the desirability of adding (or expanding the carriage of) a particular network, Comcast takes into account the composition of its overall programming lineup. In determining programming fit, Comcast typically considers the breadth of the network’s popularity, the passion or intensity of its fan base, and whether similar programming is available elsewhere within Comcast’s channel lineup. There are many genres that are already heavily represented in Comcast’s programming lineup, and that is certainly a relevant factor when Comcast is assessing the value proposition of another network offering programming in such well-represented genres. But the network’s overall popularity and the intensity of its fan base also play significant roles. Thus, a network in a genre that is not represented in Comcast’s lineup may not have much of a potential fan base or subscriber interest, whereas a network with programming in a genre that is already well-represented may be attractive if the network has compelling programming that sets it apart and is highly appealing (and assuming the economic terms make sense for both parties).

For example, although Comcast already carries numerous sports programming channels, it generally is willing to consider new programming that has a particularly passionate fan base. In these instances, Comcast must carefully consider the overall economics of the deal that the network is offering and work with the programmer to determine the most appropriate tier position and/or geographic carriage. College sports programming traditionally falls in this category.

Two examples of new college sports programming added by Comcast include the Big Ten Network and the SEC Network. The Big Ten and SEC conferences are known for their passionate fan bases. Thus, in Comcast systems within the Big Ten Conference

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territory, Comcast carries the network on highly penetrated tiers, since there is naturally a higher percentage of Big Ten sports fans among subscribers in those regions. In systems outside of the Big Ten territory, by contrast, Comcast makes the network available on its Sports and Entertainment package, where the proportionally smaller number of passionate Big Ten sports fans can subscribe to the sports tier to receive the network. The recent expansion of the Big Ten Conference [[ ]]. Rutgers University and the University of Maryland became official members of the Big Ten Conference on July 1, 2014. [[ ]] A similar geographically-focused approach was taken with regard to the recent launch of the SEC Network.

Determining Scope of Carriage

The geographic scope of carriage varies greatly depending upon application of the aforementioned factors. Typically, a Comcast region that wishes to add a network to one or more of its systems’ lineups, or to change a network’s distribution level, [[ ]].

Evaluation of Potential Replacements

Comcast uses all of the factors described above to evaluate potential replacements, in the event that a network is withdrawn or dropped.

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31.	List and describe all requests for program carriage since January 1, 2011, specifying which program carriage requests were approved and which were denied, and for each request state:

the date of the request and the reasons why each non-broadcast programming network request was approved or denied;

the genre of each non-broadcast programming network (i.e., children’s, news, Spanish language, etc.);

c. the tier and channel placement for networks granted carriage;

whether the inclusion of the non-broadcast programming network resulted in any adjustment or modification to the price for the tier on which such programming is carried based on said carriage; and

whether any carriage agreement into which the Company has entered during the last three years has resulted in a change in tier placement for the subject network in any geographic area covered by the agreement.

RESPONSE:

Comcast receives numerous inquiries concerning carriage. Prior to 2011, Comcast did not track each carriage request and it still does not track the specific information sought in this request regarding each request for carriage. In 2011, pursuant to Section IV.N.2 of the Final Judgment, United States, et al. v. Comcast Corp., et al., Civil Action No. 11-cv-00106 (D.D.C. Sept. 1, 2011), Comcast began producing semiannual reports that identify persons who, in writing, have requested or submitted offers for carriage or retransmission of video programming on Comcast systems, including the date of the person’s most recent written request or contractual offer, and the date of Comcast’s response or offer to such person. Comcast is providing copies of the reports covering January 2011 through April 2014 as Exhibit 31.

Further, and as discussed in response to Request 34, many of the requests for carriage Comcast receives (and that are identified in Exhibit 31) are merely inquiries that relate only to proposed programming concepts that are never launched as networks and do not lead to negotiations for a carriage agreement. In fact, it is relatively unusual for Comcast to enter into serious give-and-take negotiations with a video programmer about terms of carriage, licensing, or distribution for an active, launched network and then decline to carry it. Because Comcast wants to avoid inefficient use of its resources, prior to entering into such negotiations, Comcast generally will have made an initial assessment about whether the programmer is offering content that may present an appealing value proposition. In addition, Comcast must consider a programmer’s ability to actually deliver the content. When Comcast enters into negotiations with a programmer, it works hard to reach a result that is mutually agreeable to both parties, even if it takes months or years to finalize an affiliation agreement. See the response to Request 30 for a further discussion of the process by which Comcast makes carriage decisions and the response to Request 34 for a further

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discussion of Comcast’s negotiations for carriage.

As described in response to Request 34, Comcast is not aware of any instances during the relevant time period in which carriage negotiations have concluded without resulting in an agreement. In the chart below, Comcast identifies each network that has launched on Comcast systems during the relevant timeframe, as well as its initial launch date, genre, tier, and a brief statement of the reason for carriage. As discussed in response to Request 30, the decision to launch a network is a product of many factors, which are summarized below as either an Appealing Value Proposition, Competitive Alignment (a response to competitors), or compliance with a voluntary commitment made during the Comcast-NBCUniversal transaction.

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With respect to subsection (d) of this request, the retail price of cable service is the product of many factors, but the most critical element is wholesale programming cost – that is, how much it will cost Comcast to carry the network. Indeed, increases in overall programming costs are a principal cost input for Comcast and translate into increases in cable pricing. {{ }}

With respect to subsection (e) of this request, as discussed in the response to Request 30, in many cases, the Content Acquisition department negotiates what is called a “hunting license” with a particular network. In those situations, a master agreement is negotiated to set the general terms of carriage, but decisions about whether to carry that network are made at the local level. In other situations, the Content Acquisition department negotiates a carriage agreement that guarantees some initial linear carriage and allows for some flexibility about tier placement or expansion to additional subscribers. On occasion, the Content Acquisition department has negotiated carriage agreements that may result in a change in the tier placement of the subject network and has done so since January 1, 2011.

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32.

Provide a list of and produce a copy of all agreements between the Company and any other person for distribution of any video programming carried by the Company’s (i) MVPD service and (ii) OVD service, and in each case produce all documents relating to each negotiation since January 1, 2009, between the Company and any other person regardless of whether the negotiations resulted in an agreement or informal arrangement.

RESPONSE:

Documents responsive to this request, including the requested list of agreements, will be produced to the FCC.

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33.

Identify each agreement the Company has entered with another person through which the Company acquires video programming from another person that contains any of the following provisions: (i) any economic or non-economic Most-Favored-Nation clause; (ii) any exclusive rights to distribute the programming; (iii) any limits on the further distribution of the programming that is the subject of the agreement either temporally, such as through the use of “windows,” or by another person or class of similar persons; (iv) any limits on the further distribution of the programming on another platform; and (v) any rights to obtain, or limits on distribution of, additional programming whether or not such programming was in existence at the time the agreement was entered; (vi) any provision relating to the authentication of users, including any limits on video programming distributors that impact their ability to authenticate the identity of a user for the purpose of delivering additional data to advertisers, and any provision that concerns the extent to which access to the set-top box impacts the ability of any person to authenticate users, for example through the operations of apps; and (vii) any other provision that impacts the way that the programming is distributed or made available to other distributors or providers differential treatment of a service provided by the Company or any affiliate, and for each such agreement state:

the parties to the agreement;

the date of the agreement;

the term of the agreement;

a description of the provision;

the date that any party to the agreement exercised any rights or received any benefits from any of the provisions set forth in parts (i) through (vi) of this Request; and

a description of any actions taken or benefits received as a result of any of the provisions set forth in parts (i) through (vii) of this Request.

RESPONSE:

Comcast understands this request to relate to agreements for carriage on Comcast’s MVPD service.

As discussed in response to Request 30, Comcast strives to offer a wide variety of compelling content to its customers in various packages and at various price points, while also balancing financial costs, opportunity costs, consumer demand, and available bandwidth, among other considerations. Its programming affiliation agreements will

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sometimes include some of the types of provisions identified in this request. For instance, Comcast has a {{ }}

Regarding exclusive rights, Comcast does not have exclusive distribution rights with respect to any linear channel or Video on Demand (“VOD”) that were entered into or renewed following the NBCUniversal transaction, other than short-term arrangements consistent with Condition IV.B. of the Comcast-NBCUniversal Order (i.e., 14 or 30 days). While it may be that a small number of older agreements provide for exclusivity (more likely for VOD), Comcast does not enforce such provisions.

Comcast carefully reviews proposals to limit online display of video programming to ensure compliance with Condition IV.B. To this end, Comcast’s typical contract language in its carriage agreements {{ }}

The remaining aspects of this request are so broadly written as to potentially cover many other typical aspects of Comcast’s agreements. {{ }}

Also, Comcast’s agreements {{ }}

In addition, {{ }}

For further information on particular agreements, Comcast refers the FCC to the text of the agreements themselves, which will be produced to the FCC.

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34.

For each instance that the Company, in negotiations with another person that did not result in an agreement for the Company to either acquire broadcast or non-broadcast video programming from another person, or license another person to distribute the Company’s broadcast or non-broadcast video programming, such negotiations proposed any of the following provisions: (i) any economic or non-economic Most-Favored-Nation clause; (ii) any exclusive rights to distribute the programming; (iii) any limits on the further distribution of the programming that is the subject of the agreement either temporally, such as through “windows,” or by another person or class of similar persons; (iv) any limits on the further distribution of the programming on another platform; and (v) any rights to obtain, or limits on distribution of, additional programming whether or not such programming was in existence at the time the agreement was entered; (vi) any provision relating to the authentication of users, including any limits on video programming distributors that impact their ability to authenticate the identity of a user for the purpose of delivering additional data to advertisers, and any provision that concerns the extent to which access to the set-top box impacts the ability of any person to authenticate users, for example through the operations of apps; and (vii) any other provision that impacts the way that the programming is distributed or made available to other distributors or providers differential treatment of a service provided by the Company or any affiliate, and for each such agreement state:

the person to whom the term was proposed;

the broadcast or non-broadcast video programming that would have been the subject of the provision;

the date the proposal was made; and

the reasons why an agreement was not reached.

RESPONSE:

For purposes of this request, Comcast understands “negotiations” to mean interactions between Comcast Cable and a video programmer in which there was a serious give-and-take about terms of carriage, licensing, or distribution with active, launched networks. Similarly, for purposes of this request, Comcast understands “did not result in an agreement” to mean that negotiations have ceased without finalizing an affiliation agreement.

It is rare for Comcast to enter into negotiations with a video programmer and then decline to carry that programmer. Because Comcast strives to avoid inefficient use of its resources, prior to entering into such negotiations, Comcast generally will have made an initial assessment about whether the programmer is offering content that may present an appealing value proposition. In addition, Comcast must consider a programmer’s ability

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to actually deliver the content (Comcast is frequently approached by parties that have an idea for a network, but lack the funding or expertise needed to launch the network). There have been occasions in the past where Comcast expended the resources to enter into carriage agreements with programmers that have not launched their networks. When Comcast enters into negotiations with a programmer, it works hard to reach a result that is mutually agreeable, even if it takes months or years to finalize an affiliation agreement. See the response to Request 30 for a further discussion of the process by which Comcast makes carriage decisions.

As noted, most of Comcast’s negotiations result in agreements and, during the relevant time period, Comcast is unaware of any negotiations involving the specific provisions identified in this request that concluded without resulting in an agreement. See the response to Request 33 for a further discussion of the types of provisions identified in this request as they may affect Comcast’s programming affiliation agreements.

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35.

Describe each instance since January 1, 2009 when the Company obtained a lower per-subscriber fee than the rate the Company was previously paying for any video programming (including through the acquisition or sale of or affiliation with any MVPD or video programming channel), and for each such instance: (i) state the date, circumstances and the reduction received; (ii) whether the Company passed through the programming cost saving to its residential subscribers in the form of lower monthly subscription fees, moving the relevant channel to a less costly service tier, or in any other way; and (vi) produce all documents discussing any savings, including how the savings were allocated or passed through to subscribers. Produce all documents that would allow a comparison between the per subscriber fee the Company pays for video programming and the per subscriber fee paid by other persons for the same video programming.

RESPONSE:

Information and data responsive to subpart (i) of this request have been provided in machine-readable Excel spreadsheet format as Exhibit 35. Exhibit 35 provides the instances in which Comcast received a reduced per-subscriber fee and the circumstances surrounding that reduction. This exhibit does not reflect the actual names of network counterparties, but rather anonymized placeholders for confidentiality purposes.

In response to subpart (ii) of this request, Comcast generally pays for video programming on a “per-subscriber” basis – meaning that it must pay a fee for each subscriber to whom it distributes a given channel (regardless of whether a particular customer watches the programming). From Comcast’s perspective, this is a variable or marginal cost. Video programming expenses are, by far, the largest variable cost that Comcast incurs, accounting for over {{ }} in 2013. These expenses have been rising rapidly, at a pace well above the general rate of inflation. In response, Comcast has had to pass on a portion of these increased expenses to its customers – although Comcast has generally increased retail cable rates more slowly than wholesale programming expenses have increased. Conversely, the reductions in programming costs that Comcast has been able to achieve in the instances described in Exhibit 35 served to counteract the general trend in increased video programming prices and therefore mitigated to some degree the financial pressure to raise retail cable rates. In short, costs have increased less than they otherwise would have.

Documents responsive to this request will be produced to the FCC, [[ ]].

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36.

Provide a list of all broadcast television stations (i) which the Company owns or has an attributable interest, and (ii) the Company manages or operates pursuant to an agreement, including but not limited to a joint sales agreement or local marketing agreement, (and produce a complete copy of each associated contract), and for each station listed:

identify the licensee, the network affiliation (if any), the call sign, the community of license and DMA in which the broadcast television station operates, and the number of television households it reaches;

identify each MVPD system that currently retransmits the broadcast television station, and for each: (1) state whether the station is carried under a retransmission consent agreement or a must-carry election; (2) if the station is carried under a retransmission consent agreement, state the term and expiration date of such agreement; (3) if the station is carried under a retransmission consent agreement, indicate whether the agreement was combined, bundled, or negotiated concurrently with a contract for rights to other video programming in which the Company has a financial interest (if so, identify the specific video programming with which the retransmission rights were combined, bundled, or negotiated concurrently); and (4) identify the periods of time, if any, during which the broadcast television station was not retransmitted by the MVPD; and

state, for each MVPD that retransmits the broadcast television station, the number of subscribers that receive the retransmitted broadcast television station, and the retransmission consent fee;

state, the monthly revenues received since January, 2009, by each such broadcast station including, but not limited to, revenue received from (1) MVPDs; (2) local advertising; (3) NBCU; and (4) other sources.

RESPONSE:

Comcast is providing data for broadcast television stations which the Company owns or in which it has an attributable interest. The company does not manage or operate any stations in addition to those stations which it owns or in which it has an attributable interest.

A list of all broadcast television which the Company owns or in which it has an attributable interest has been provided in machine-readable Excel spreadsheet format as Exhibit 36.1. Exhibit 36.1 provides a list of broadcast television stations responsive to this request, as well as a number of details regarding each station as described below.

36(a):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 36.1. Exhibit 36.1 provides the call sign, licensee, community of license, Nielsen DMA, Nielsen television households, and network affiliation for all television stations owned by or attributed to NBCUniversal. The number of households reached by each television station is represented in this exhibit by the number of Nielsen television households in each DMA, according to Nielsen.

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36(b):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibits 36.2(a)-(c). Exhibit 36.2(a) contains a list of MVPDs retransmitting NBC stations (excluding retransmission of NBC stations in Puerto Rico). {{ }} In addition, the exhibit provides the number of subscribers, the average billed rate per subscriber and the annualized subscriber fee revenue for each MVPD for each station.

36(c):

In response to this subpart, Comcast refers to Exhibits 36.2(a)-(e).

Exhibit 36.2(a) contains the information responsive to this subpart for NBC stations (excluding retransmission of NBC stations in Puerto Rico). For each MVPD retransmitting a station, it provides the number of subscribers and the average billed rate per subscriber.

Exhibit 36.2(b) contains the same categories of information for Telemundo stations (excluding retransmission of Telemundo stations in Puerto Rico). Exhibit 36.2(c) contains the same categories of information for both NBC and Telemundo to the extent it involves retransmission of broadcast stations in Puerto Rico. Exhibit 36.2(d) and Exhibit 36.2(e) provide a breakdown of subscriber data for NBC and Telemundo stations, respectively, being retransmitted by NCTC members under an NCTC license.

36(d):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 36.3.

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Comcast is providing data for subpart (d)(1) on a quarterly basis for all quarters since January 1, 2013 and on an annual basis for 2012. For years prior to 2012, Comcast did not receive retransmission revenues from MVPDs. Comcast does not maintain the requested information in a form that would allow for reporting on a monthly basis.

As described in more detail above, Exhibit 36.3(a) summarizes revenues received from MVPDs beginning in 2012. Exhibit 36.3(b) and (c) contain the monthly revenues received from national advertising, local advertising, and other sources.

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37.

Identify each broadcast programming network owned by, operated by, managed by, or attributed to the Company, and for each such network, state the nature and extent of the Company’s role in management, including whether the Company has any board representation, management rights, voting rights, veto power or supermajority or investor protection rights, and for the period beginning January, 2009, to the present, state separately for each quarter:

each OVD that distributes, and the total number of subscribers and unique users of each OVD who view, content produced or distributed by each broadcast programming network;

the total revenues, separately categorized by (1) subscription fees, (2) advertising revenues, and (3) other (briefly describe) received from each (a) MVPD; (b) non-affiliated OVD; (c) affiliated OVD; and (d) broadcast affiliate;

the margin the Company earns on each broadcast programming network separately for each (1) MVPD; (2) non-affiliated OVD; and (3) affiliated OVD; and

the value to the Company of selling each broadcast programming network to each additional subscriber (categorized by (1) subscription fees, (2) advertising revenue, and (3) other (briefly describe)), separately for each (a) MVPD; (b) non-affiliated OVD; and (c) affiliated OVD.

RESPONSE:

In response to this request, Comcast refers to Exhibit 18.1, which provides information regarding broadcast networks NBC and Telemundo. The relevant information is reproduced in the table below:

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Channel	Any Changes in Ownership Since 2009	How and When Channel Formed and From Whom Interest Was Acquired	Management & Voting Rights
NBC	Prior to January 2011, the network was owned by NBCUniversal. In January 2011, ownership of the network was transferred to the NBCUniversal joint venture, which was 51 percent owned by Comcast and 49 percent owned by GE. In March 2013, Comcast acquired GE’s ownership interest, increasing Comcast’s interest to 100 percent.	NBC was formed in 1926 by the Radio Corporation of America.	Since Comcast has a 100 percent interest, it has full management control and governance rights.
Telemundo	Prior to January 2011, the network was owned by NBCUniversal, which was owned by GE. In January 2011, ownership of the network was transferred to the NBCUniversal joint venture, which was 51 percent owned by Comcast and 49 percent owned by GE. In March 2013, Comcast acquired GE’s ownership interest, increasing Comcast’s interest to 100 percent.	Telemundo was founded by Angel Ramos in San Juan, Puerto Rico, with the launch of WKAQ on March 28, 1954. Telemundo was launched in the United States in 1987. Telemundo was acquired by NBCUniversal on April 12, 2002.	Since Comcast has a 100 percent interest, it has full management control and governance rights.

37(a):

In response to this subpart, Comcast refers to Exhibits 19.5(a)-19.5(d), which, as described in response to Request 19 (subpart (d)), provide information regarding OVDs to whom Comcast licenses OVDs. As described, the titles that are licensed to OVDs generally do not correspond to the full programming slates of particular networks (whether a broadcast network or a cable network), but rather consist of specific programs

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of particular networks, as well as movie titles that may not necessarily have appeared on television.

37(b):

With regard to revenues from OVDs, Comcast refers to and incorporates its answer in response to subpart (a).

With regard to revenue from MVPDs, Comcast refers to Exhibits 19.2(a)-(b), as described in response to Request 19 (subparts (a)-(b)). All of NBC and Telemundo’s revenues from MVPDs can be categorized as subscriber revenue. These broadcast networks, like cable networks, do not receive advertising revenues from MVPDs.

37(c):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 37.1, which provides total OCF for each broadcast network. Comcast does not maintain data permitting it to calculate network-specific margins on an MVPD or OVD basis, and is therefore providing total OCF for each broadcast network in Exhibit 37.1. After the fixed costs of producing a particular channel or program have been incurred, there are minimal costs associated with providing programming to a particular MVPD or OVD. Comcast also refers to Exhibits 19.3(a)-(b) which provides information regarding NBC retransmission fees per subscriber.

37(d):

Comcast does not maintain additional data permitting it to calculate “value” as distinct from “margin,” and therefore in response to this subpart, Comcast refers to and incorporates its responses to subparts 37(b) and 37(c). In response to subpart (d)(2) regarding advertising revenue, information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 37.2, which provides total advertising revenue for each broadcast network.

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38.	As of June 30, 2014,

identify each broadcast television station owned by or in which the Company has an attributable interest in, and state the call sign of the station and the DMA it serves;

state separately, for each station identified in response to subpart (a), the average retransmission consent fee per subscriber;

state NBCU’s and Telemundo’s average gross and average net advertising revenue per viewer for national broadcast advertising sales, and explain how these values were calculated; and

state separately for each station identified in response to subpart (a), the average gross and the average net advertising revenue per viewer for local spot advertising sales sold by the station, and explain how these values were calculated.

RESPONSE:

38(a):

In response to this subpart, Comcast refers to Exhibit 36.1. Exhibit 36.1 provides the call sign and the Nielsen DMA for all television stations owned by or attributed to NBCUniversal.

38(b):

In response to this subpart, Comcast refers to Exhibits 36.2(a)-(e).

Exhibit 36.2(b) contains the same categories of information for Telemundo stations (excluding retransmission of Telemundo stations in Puerto Rico. Exhibit 36.2(c) contains the same categories of information for both NBC and Telemundo to the extent it involves retransmission of broadcast stations in Puerto Rico. Exhibit 36.2(d) and Exhibit 36.2(e) provide the names of MVPDs that retransmit NBC and Telemundo stations, respectively, under an NCTC license.

38(c):

In response to this subpart, Comcast refers to Exhibits 36.3(b) and (c). Exhibit 36.3(b) and (c) contain the average gross and average net advertising revenues per viewer for national broadcast advertising.

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The average net advertising revenues per viewer for an individual station were calculated by dividing the revenues from national advertising for the station by the number of viewers 18 years of age or older as of January 1, 2014 (as reported by Nielsen). {{ }}

38(d):

In response to this subpart, Comcast refers to Exhibits 36.3(b) and (c). Exhibit 36.3(b) and (c) contain the average gross and average net advertising revenues per viewer for local spot advertising.

The average net advertising revenues per viewer for an individual station were calculated by dividing the revenues from local advertising for the station by the number of viewers 18 years of age or older as of January 1, 2014 (as reported by Nielsen). {{ }}

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39.	Produce all documents relating to:

the Company’s current and continued support for currently deployed operator-supplied CableCARD devices, currently deployed retail CableCARD devices, and future CableCARD devices;

the Company’s plans to deploy system technology or otherwise offer any relevant service that will be incompatible with the current CableCARD standard, including documents discussing the nature of the new technologies and the timeframes for their deployment;

technologies currently deployed by TWC but not by Comcast, such as StartOver and LookBack, including underlying system technologies not generally visible to consumers;

the development and deployment of streaming solutions that provide the Company’s broadcast or non-broadcast video programming to consumer devices with or without using in-home hardware to transcode the video programming;

the extent to which new system technologies used in providing any of the Company’s relevant services would enhance or limit a subscriber’s ability to use a consumer-owned navigation device to record video programming; and

consumer-owned navigation devices, including, but not limited to, compliance with Section 629 of the Communications Act through technologies other than CableCARD, including downloadable security, and agreements to develop and support these technologies, and the retail and wholesale pricing of CableCARDs, including licensing fees. (47 U.S.C. § 549).

RESPONSE:

Documents responsive to this request will be produced to the FCC.

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40.	Describe the Company’s current participation in, support for, and future plans relating to:

CableLabs, and its role in the development of products and technologies deployed by or planned to be deployed by the Company in providing any relevant service, particularly relating to the Comcast X1/X2 platform and other cloud services; and

The Society of Cable Telecommunications Engineers, and its role in the development of products and technologies deployed by or planned to be deployed by the Company in providing any relevant service, particularly relating to the Comcast X1/X2 platform and other cloud services.

RESPONSE:

40(a):

CableLabs is a research and development consortium supported by the cable industry, and has helped develop numerous technologies that are widely deployed by all cable operators today, including DOCSIS (which is the standard that allowed cable operators to begin offering Internet and IP video services) and Packet Cable (for wireless, gaming, and IP voice services). CableLabs also is helping to drive the development of next generation cable technologies, such as DOCSIS 3.1, the Converged Cable Access Platform (“CCAP”),84 and more energy efficient set-top boxes. Comcast has been an active participant in, and supporter of, these activities, and, as detailed in the Public Interest Statement, has started deploying, or will soon deploy, these technologies in its cable systems.85 Comcast will continue to participate in CableLabs’ activities in the

84 CCAP is a new technology that will enable Comcast to bond 16 or more downstream QAM channels and 8 upstream QAM channels to deliver downstream speeds in excess of 250 Mbps and upstream speeds in excess of 50 Mbps over Comcast’s existing HFC network plant. Comcast has begun deployment of CCAP technology and will have it deployed to about [[ ]] percent of its footprint by the end of this year, [[ ]] percent by the end of 2015, and 100 percent in 2016. See Public Interest Statement at 34-35.

85 See Public Interest Statement at 34-35. In December 2013, Comcast joined with other leading multichannel video programming distributors, equipment manufacturers, and energy advocacy groups in launching a historic set-top energy conservation agreement. When fully implemented across the industry, the agreement will result in an estimated $1.5 billion in annual residential electricity savings and reduce carbon emissions by the equivalent of four power plants each year. Comcast already meets most of the energy savings goals set out in the agreement. In 2013, over 93 percent of the new set-top boxes Comcast purchased and brought into its inventory satisfied the Environment Protection Agency’s ENERGY STAR 3.0 efficiency levels, exceeding the 90 percent benchmark established in the agreement. Comcast expects those percentages to increase in 2014. At the same time, Comcast is also working with its vendors on the next-generation of energy-efficient set-top boxes. For example, Comcast is partnering with silicon chip manufacturers to integrate auto-power-down “deep sleep” modes and other energy features into their “system-on-a-chip” technology used in set-top boxes. See A Commitment to Creating the Sustainable Devices of Tomorrow, Comcast Corp., http://corporate.comcast.com/news-information/news-feed/a-commitment-to-creating-the-sustainable-devices-of-tomorrow (last visited Sept. 10, 2014). A new report released last month shows that the voluntary agreement has saved American consumers approximately $168 million in energy bills. According to the Voluntary Agreement for Ongoing Improvement to the Energy Efficiency of Set-Top Boxes 2013 Annual Report, the improved energy efficiency of set-top boxes also represents a savings of nearly 842,000 metric tons of carbon dioxide (CO2) per year. Voluntary Agreement for Ongoing Improvement to the Energy Efficiency of Set-Top Boxes 2013 Annual Report 15 (Aug. 15, 2014). This is equivalent to the output of one-half of a large (500MW) power plant. See Press Release, NCTA, Energy Efficient Set-Top Boxes Saving Consumers Hundreds of Millions of Dollars (Aug. 28, 2014), https://www.ncta.com/news-and-events/media-room/content/energy-efficient-set-top-boxes-saving-consumers-hundreds-millions-dollars.

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future. With respect to the X1 platform,86 while some of the features of the platform make use of technologies developed by CableLabs, such as DOCSIS and CableCARD, CableLabs has not played a role in the development of the X1 platform itself, and Comcast does not envision that changing in the future.

40(b):

Comcast also has been actively involved in the standards-setting work of the Society of Cable Telecommunications Engineers (“SCTE”), and will continue to participate in SCTE activities in the future. Among other things, SCTE has been responsible for setting cable industry standards relating to digital video delivery over cable networks; DOCSIS; emergency alert systems; network monitoring systems; cables, connectors and amplifiers; and construction and maintenance practices. These standards have been broadly adopted in cable networks today, and the X1 platform conforms to the relevant standards. So, for example, the XG1 set-top box, which is used to access the X1 platform, accesses digital video pursuant to SCTE standards and also conforms to SCTE standards for use of CableCARDs and digital connectors in cable equipment. However, SCTE was not involved in the development of the X1 platform itself, and Comcast does not envision that changing in the future.

86 Although Comcast has significantly enhanced the X1 platform since its initial launch, including by launching what has been referred to as the X2 guide, the term X1 platform generally encompasses the original launch of the platform and all subsequent updates, and accordingly, Comcast herein refers to the X1 platform.

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41.

Describe, and produce all documents relating to, each instance the Company has attempted to partner with another MVPD to achieve joint objectives, including but not limited to attempts to launch a coordinated TV Everywhere service. In the description, state the results of each instance and the reasons for its success or failure.

RESPONSE:

As detailed in the response to Request 40, Comcast will work on an industry-wide basis with other cable operators to develop core technologies that are supported in most cable networks and equipment today. These efforts have produced many successes, such as the DOCSIS and digital video distribution standards. More recently, Comcast established a joint venture with Time Warner Cable and Liberty Global to develop the Reference Design Kit (“RDK”), a pre-integrated software bundle that provides a common framework for powering IP set-top boxes and other customer-premises equipment. The RDK was created to accelerate the deployment of next-generation video products and services. However, while these and other joint efforts have been successful in developing core technology capabilities that have broad application across the cable industry, Comcast’s experience has been that joint efforts to develop actual products and services have been more challenging. In many cases, joint efforts do not achieve all of the potential benefits because of well-known difficulties that arise in contracting, including transactional frictions and costs, differences in beliefs and strategy, double marginalization, and the requirement for large investments specific to collaboration with another company in which returns hinge on the future behavior of the other company.

Comcast documented in its Public Interest Statement and/or the accompanying Rosston/Topper and Angelakis declarations specific instances where Comcast and TWC, or Comcast and other cable operators, have sought to achieve efficiencies via contracting or consortium approaches in several contexts with mixed results.87 Comcast provides an abbreviated summary of those efforts here.88 Comcast does not track systematically every possible MVPD collaboration entertained by the company, so what follows is an overview of collaborations that Comcast is aware of that are responsive the Information Request.

First, {{ }}

87 See Public Interest Statement at 81; see also Applications and Public Interest Statement, Declaration of Dr. Gregory L. Rosston & Dr. Michael D. Topper ¶¶ 72-79, 111-115, 141, 158-160, MB Docket No. 14-57 (Apr. 8, 2014) (“Rosston/Topper Decl.”); Applications and Public Interest Statement, Declaration of Michael J. Angelakis ¶ 17, MB Docket No. 14-57 (Apr. 8, 2014).

88 Documents responsive to this request will be produced to the FCC. In addition, material responsive to this request is provided as Exhibit 41.

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Second, Comcast’s and other cable operators’ efforts to develop a common “front door” by which cable customers nationwide could access TV Everywhere content from their local cable operator met with frustration. This front door was conceived of as a single application and user interface for customers to access their respective cable providers’ TV Everywhere content on third-party consumer-owned devices, such as tablets, smartphones, computers, and gaming consoles. {{ }} These efforts were unsuccessful because, among other things, conforming to a common approach given the realities of differing legacy and planned technologies, priorities, and business models became overly complex for the parties. As a result, Comcast and its would-be partners were unwilling to make the necessary investments.

Third, Comcast and TWC were not able to collaborate to offer a “Download To Go” feature across their combined footprint. Comcast offers its customers the ability to download content to mobile devices and tablets via the Xfinity TV Go app, which allows customers to watch content on those devices when not connected to the Internet. Comcast and TWC put time and effort into a technical collaboration to make this technology available to TWC customers. However, they ultimately found that the difficulties and costs associated with supporting two different technology roadmaps were prohibitive and they were not able to proceed with the partnership.

Fourth, for several years Comcast and other cable operators have discussed partnering to serve super-regional businesses that span their footprints. In this regard, Comcast and TWC very recently signed their first (and only) joint contract. Further, TWC recently evaluated the feasibility of a more extensive consortium between cable operators to pursue large, super-regional business customers, and identified a number of potential obstacles to success. For example, TWC concluded that [[ ]].

Fifth, joint industry efforts to develop advanced advertising services also met with failure. Canoe Ventures was a joint venture launched by the six largest cable operators in 2008 to provide advanced services (primarily interactive advertising, but also addressability, and VOD insertion). Canoe encountered numerous challenges due in part to varying degrees of digital capabilities and other technology differences across cable companies. It managed to launch an Interactive TV product in 2010 that let viewers request more information, coupons, or product samples. However, acceptance was limited and Canoe “pulled the plug” on its interactive operations in 2012 and redirected its efforts. The consortium approach added a lot of complexity and difficulty, including disagreements about desired deployment times, management issues (size of staff and tension over who was owner and seller of the platform), and conflicting incentives between owners of the venture. Technical coordination problems between partners and platforms also played a role.

Sixth, {{ }}

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42.

Describe the extent to which the technology, cloud services, software, and hardware developed in support of the X1 and X2 platforms are available for license or purchase by unaffiliated MVPDs from (i) third party hardware, software, and service providers, and (ii) available for license or purchase from Comcast.

RESPONSE:

The X1 platform currently comprises over 400 separate but to some extent interdependent components, and includes technology developed and owned by Comcast as well as technology purchased or licensed on a non-exclusive basis from a variety of third parties, and technology available as open source. The platform includes six basic service systems, and is supported on Comcast-supplied, but third-party-manufactured, set-top boxes (e.g., the XG1) and on customer-owned devices via Xfinity mobile apps. What follows is a general description of each of the six service systems:

RDK: RDK is a pre-integrated software platform based on IP and other technologies that can be used in a wide range of set-top boxes and other devices and provides a common platform for the X1 user interface and other services. RDK allows flexibility for optional components selected by the operator, so the components that Comcast selects can and do differ from those selected by other operators. RDK is licensed out on a royalty-free basis by a joint venture that includes Comcast, Time Warner Cable, and Liberty Global, and has now been licensed to over 150 entities.

[[ ]]

Xcal Data Services: These are the interactive features that customers can access via the user interface and that have been incorporated into the programming guide, such as traffic and weather information. Comcast licenses these services from third-parties.

Viper: The Viper system is the component of the X1 platform that is used for content ingest, storage, processing, and delivery of video content in IP (as opposed to over traditional cable QAM). [[ ]]

Compass: Compass is the system that, among other things, Comcast uses to aggregate metadata from Rovi, Common Sense Media, Rotten Tomatoes, and other sources, and to process search, browse, and recommendation queries from X1 customers to help customize the user experience. [[ ]]

XBO: Xcal Back Office (“XBO”) is the system that provides back office support for the X1 platform. It consists of hosting, monitoring, and other server-based technology and services that Comcast purchases from third parties.

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As noted, Comcast licenses components from third-parties on a non-exclusive basis, so a company that wanted to build its own platform using these same components would be able to pursue that option. Of course, such a company would also need to do its own integration work to combine these components with technologies that the company owns or obtains from open source in order to develop its own finished service. Other investments are required to maintain and support the platform. To give a sense of the level of effort, Comcast has over [[ ]] engineers working on X1.

(It also bears noting that there are already competing services in the marketplace today, such as Cisco’s Videoscape service and Ericsson’s Mediaroom, so a company could also pursue these alternatives.)

As Comcast explained in the Public Interest Statement, Comcast has explored arrangements to enable unaffiliated companies to license the X1 platform in its entirety. {{ }}

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43.	With respect to the deployment of TV Everywhere provide:

a complete list of devices for which the Company provides TV Everywhere authentication and a complete list of applications for which the Company provides TV Everywhere authentication, that also includes identification of each device through which access for each application has been approved;

a list of and description of each application and device for which the Company is currently negotiating TV Everywhere authentication services;

a list of and description of each application and device for which the Company has declined to provide TV Everywhere authentication services;

a description of all the criteria used by the Company to determine whether to enter into an agreement to provide TV Everywhere authentication service to an application, content provider, or device manufacturer;

all documents relating to the planned or possible deployment of TV Everywhere technologies currently offered by Comcast to its current subscribers but not offered by TWC to its current subscribers; and

a description of Comcast’s authentication of HBO Go on consumer-owned devices.

RESPONSE:

43(a):

TV Everywhere (“TVE”) authentication services generally refer to the services a multichannel video programming distributor (“MVPD”) provides to authenticate that a consumer trying to access TVE video programming over the Internet is a customer of the MVPD and that the video programming the customer is attempting to access is part of that customer’s MVPD service. Comcast provides TVE authentication services for programmer websites and programmer applications running on customer-owned devices, and also provides its own TVE services via the XfinityTV.com website and the Xfinity TV Go application running on customer-owned devices. With respect to programmer websites and applications, Comcast currently provides TVE authentication services for the websites and applications of [[ ]] different program networks on up to [[ ]] different device platforms. These numbers have been growing – this year alone, Comcast has already integrated its TVE authentication services with [[ ]] additional networks on [[ ]] different devices – and that trend will continue as more programmers pursue TVE authentication. A chart detailing the programmers that are using Comcast’s TVE authentication services, and the devices on which those apps are authenticated, is attached hereto as Exhibit 43.

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With respect to Comcast’s own TVE services, XfinityTV.com and Xfinity TV Go include on-demand content from the following programmers: [[ ]]

The Comcast website and app also include the following live TV channels:89

89 See Streaming Now Online, Comcast, http://xfinitytv.comcast.net/watch-live-tv (last visited Sept. 9, 2014).

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A&E

History Channel

BBC World News

beIN Sports

beIN Sports en Espanol

Big Ten Network

Disney Channel

Disney Jr

Disney XD

ESPN

ESPN 2

ESPN 3

ESPN Deportes

ESPNews

ESPNU

SEC Network

SEC+

Bravo

CNBC

Golf Channel

MSNBC

mun2

NBC Sports Network

Oxygen

Sprout

Syfy

USA Network

FOX News Channel

FOX Business Channel

FOX Sports 1

FXX

National Geographic Channel

Nat Geo Wild

Nat Geo Wild Portuguese

Pac-12 Network

Pac-12 Arizona

Pac-12 Bay Area

Pac-12 Los Angeles

Pac-12 Mountain

Pac-12 Oregon

Pac-12 Washington

Cooking Channel

DIY

Food Network

HGTV

Travel Channel

Starz

CNN

HLN

TBS

TruTV

TNT

Willow TV

The XfinityTV.com website can be accessed on personal computers and other device platforms using Internet Explorer, Firefox, Chrome, or Safari browsers. The Xfinity TV

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Go app is available on iPhone, the later generations of iPod touch, iPad, Kindle Fire, and some Android phones and tablets.90

43(b):

Programmers hold the rights to enable Comcast customers to access the programmer’s authenticated content via Comcast’s and/or the programmer’s website and app. Comcast typically requests such rights from programmers, and subsequently negotiates TVE rights as part of a broader affiliation agreement with a particular programmer or program group that will also address carriage of cable-delivered programming, content security, marketing, license fees, ad shares, and other aspects of the affiliation relationship. These negotiations usually occur when a program network is first launched or at renewal. However, Comcast continues to be interested in acquiring TVE-related rights from programmers between launch and renewal to more quickly gain the ability to offer consumers more video content via online platforms. Comcast has currently requested rights and/or is actively negotiating TVE rights with the following programmers for authentication via Comcast’s website and apps and the programmer’s website and apps:

Cable Group/Networks

Multicultural Networks

Broadcast Groups/Stations

Other

There are also instances where a particular programmer or program group may not be interested in having Comcast authenticate its website or app (potentially because the programmer has not yet developed its website or app to provide authenticated content). In those cases, Comcast will negotiate with the programmer only for authentication via Comcast’s website and apps. The following programmers fall into this category:

90 The XfinityTV website and Xfinity TV Go app provide a path for online authentication for smaller programming networks that may not have the resources to create a website and/or application that can support video streaming and pay for back-office support for authentication and other services. This includes several small independent programmers that might otherwise not offer online TVE options.

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Multicultural Networks

Broadcast Groups/Stations

In addition, Comcast has had discussions with programmers for which it already provides authentication services about expanding those services to new platforms. This category includes: {{ }}

Finally, Comcast is engaged in negotiations with {{ }} to support authenticated services on those platforms, whether for the Xfinity TV Go app or individual programmer apps.

43(c):

With respect to Comcast’s Xfinity website and app, Comcast customers have access to over 50 live TV channels,91 as well as on-demand content from a wide range of programmers, and Comcast is seeking to obtain the rights to include more programmers in these services in its affiliation negotiations.

As for programmer applications, as explained above, Comcast has been steadily expanding the number of programmer apps that it authenticates. Comcast has not “declined” to authenticate any particular programmer (or device) in the sense of having made any official or final decision in any case that it would and would not do so. However, there are instances where Comcast and a particular programmer have not reached agreement – either on launching authentication services with the programmer, or expanding authentication services to new device platforms. There are a variety of reasons why this may occur. For example, a programmer may not offer Comcast the rights for Comcast subscribers to be authenticated on the programmer’s app or website; or Comcast and a particular programmer may reach an impasse over the value of such rights, or such programmer may not be willing to protect the data that Comcast is providing as part of the authentication services or support Comcast’s fraud mitigation policies. In most cases, Comcast and the programmer work through the issue, but discussions over TVE-related rights and authentication services can sometimes take a long time to complete.

43(d):

Comcast considers a variety of factors when determining whether to enter into a TVE agreement, but, the first step requires the programmer to be willing to grant Comcast the right to give access to authenticated content to Comcast subscribers. As noted, with

91 See Streaming Now Online, Comcast, http://xfinitytv.comcast.net/watch-live-tv (last visited Sept. 9, 2014).

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respect to programmers, Comcast will typically consider TVE rights in the context of a broader negotiation over an affiliation agreement that will often include a wide range of issues covering multiple platforms and services. Consequently, the gives-and-takes of each negotiation will be different, so the precise scope of TVE rights that are negotiated will vary from deal to deal. Authentication services involve handing off sensitive consumer data (about entitlements, subscriber status, services purchased, etc.) to programmers to assist in the programmers’ effort to provide access to such entitled content via the programmer’s website or its applications running on customer-owned devices. In general, Comcast will want to ensure that any TVE agreement satisfies certain guidelines relating to the protection of customer data, fraud prevention (so that customers or other individuals cannot access content they have not paid for), procedures to ensure the security and integrity of the authentication process, and other measures associated with the authentication services. To the extent that a programmer refuses to adhere to adequate fraud prevention, consumer protection, or other important guidelines (which has occurred in some circumstances), this can complicate, delay, or even prevent the authentication of a website or application.92

With respect to devices, Comcast typically enters into an agreement with a device platform provider only where Comcast is seeking the right to include an Xfinity app on the device; otherwise, authentication of a programmer app on a particular device tends to be driven by the agreement between Comcast and the relevant programmer. In determining whether to enter into a direct agreement with a device platform provider, Comcast will take a number of considerations into account:

Customer Benefits: Comcast will review the platform’s usage and performance to assess how a particular platform is likely to add value for its subscribers. Comcast will consider, among other things, whether the platform has a material audience, allows for a unique or enhanced user experience, and enables the trialing of new features.

Service Look-and-Feel: Comcast has a strong interest in preserving the look-and-feel of its services across device platforms. This ensures that customers have a consistent experience whether accessing services on a Comcast-supplied device or a customer-owned device. Comcast will explore whether the device is able, and the device platform provider is willing to, respect the integrity of Comcast's look-and-feel.

Customer Service: Comcast also needs to ensure high quality customer service on a new platform, which needs to scale as more devices are added. When there is an issue with the authentication of the Xfinity TV Go app on a particular device

92 Comcast is not responsible for video distribution of the programmer’s content to the programmer’s website and apps as part of these authentication services. Rather, the programmer is responsible for distribution, and will typically negotiate separate agreements with device platform providers to support use of the programmer’s app on different platforms.

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platform, Comcast typically gets the call from the customer, not the device manufacturer.

Regulatory Requirements: The device platform must be able to deliver Comcast services consistent with applicable regulatory requirements, such as closed captioning and other accessibility mandates.

Comcast’s goal is always to create the best experience for its subscribers, and it will continue to look for ways to maximize device choices. The large and growing number of device platforms on which Comcast supports its TVE services – and its willingness to engage in discussions with potential new device platforms like {{ }} – demonstrates that it is successfully advancing this goal.

43(e):

Documents responsive to this request have been provided to the FCC.

43(f):

HBO has granted Comcast rights to give access to authenticated content to Comcast subscribers, and Comcast authenticates (via Comcast’s TVE authentication services) the HBO Go app on the following devices: desktop/laptop computers, iPad, iPhone, Android smartphones, Kindle Fire, Android 7 and 10 inch tablets, Samsung Smart TVs, Xbox 360, and Apple TV. As noted, {{ }}.

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44.	With regard to the capability of the Company’s content and consumer premises equipment (“CPE”) to interact or operate with unaffiliated content, such as through the use of applications on the Company’s CPE and devices, as described on page 79-80 of the Public Interest Statement, provide:

a list of unaffiliated content supported by the Company that includes a description of the applications, devices or technologies that the Company uses for interoperability with such unaffiliated content;

the licensing and other agreements entered into by the unaffiliated content providers to accomplish the interoperability with the Company’s CPE;

the criteria used to determine whether to grant or deny an unaffiliated person’s request for access to the Company’s CPE, devices or content;

a list of all unaffiliated content providers who have not received approval and the reasons supporting each denial for (1) unaffiliated content sources, such as those from Netflix, Hulu, and Amazon on the Company’s CPE, (2) delivery of unaffiliated content to retail devices in the home, such as to Microsoft’s Xbox, Sony’s Playstation, TiVo devices, Roku devices, and Apple’s AppleTV by in-home streaming, CableCARD, and other technologies; and (3) delivery of unaffiliated content to retail devices outside the home; and

all documents related to CPE research, development and innovation plans.

RESPONSE:

44(a):

Comcast currently includes two Internet-delivered apps from unaffiliated content providers on the X1 platform – Pandora and Facebook.93 Comcast also recently launched a Comcast-developed Internet app that currently lets customers view photos they have put on third party photo-sharing sites; a similar over-the-top Comcast app allowed customers to view headlines from various third-party online news sites, but the app has been decommissioned for lack of use. In addition, Comcast used the platform for a brief period of time to provide an over-the-top app with additional NBCUniversal Olympics

93 For purposes of responding to this request, Comcast assumes that the Commission is focused on launch of unaffiliated Internet-delivered apps on the X1 platform. To the extent the Commission is addressing the broader question of support for unaffiliated content on Comcast’s cable service, Comcast detailed in the Public Interest Statement how most of the programming carried on Xfinity TV is unaffiliated, and how Comcast has been adding diverse, independent programming consistent with its obligations under the NBCUniversal Order. See Public Interest Statement at 114-17; id. at 169-70.

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content to supplement the cable television offerings on various NBCUniversal channels.94 As discussed below, Comcast has had discussions with other third party Internet content providers, including {{ }}, among others, but Comcast’s plans for the platform are still evolving, and Comcast is assessing whether providing a large suite of apps is consistent with the cable-focused nature of Comcast’s service and set-top box offerings.

Notably, the X1 platform also includes a Send-to-TV feature that allows customers to access Internet webpages over the set-top box, in conjunction with a second screen device, such as a tablet or smartphone.95 This is an early-stage feature, which will help Comcast assess the degree to which customers have an interest in accessing Internet content over their set-top box, and whether content providers are interested in developing TV-optimized websites or applications; to date, usage has been low, though Comcast is presently working on improvements to the Send-to-TV feature.

44(b):

Documents responsive to this request will be produced to the FCC. In addition, material responsive to this request is provided as Exhibits 44.1-44.4.

44(c):

Comcast has not established criteria to determine what Internet-delivered apps from unaffiliated content providers will be launched on the X1 platform. As noted, the platform is still nascent, and the distribution of the X1 today is still relatively small: X1 is only used today by {{ }} subscribers, accounting for approximately {{ }} percent of Comcast’s deployed set-top boxes, and approximately {{ }} percent of X1-capable set-top boxes lack the technical capability (e.g., memory and processor speed) to support Internet-delivered apps. The remainder of Comcast’s subscribers receive their cable service using legacy digital set-top boxes, which have no ability to access Internet-delivered applications. While Comcast anticipates that, over the next five years, X1 penetration may increase to approximately {{ }} percent of Comcast subscribers, almost {{ }} Comcast subscribers will still be using legacy equipment.96

94 See Press Release, Comcast Corp., Sochi 2014: A TV Everywhere Success Story (Mar. 7, 2014), http://corporate.comcast.com/news-information/news-feed/sochi-2014-a-tv-everywhere-success-story (“During the 2014 Olympic Winter Games from Sochi, Russia (Feb 6-23), NBCOlympics.com and the NBC Sports Live Extra app featured, for the first time, live streaming coverage of all Winter Games competition plus the closing ceremony, event rewinds and extensive video highlights”). [[ ]]

95 See Download and Use Send to TV, Comcast, http://customer.comcast.com/help-and-support/cable-tv/download-and-use-send-to-tv/ (last visited Sept. 5, 2014). An over-the-top provider could create a Send-to-TV-ready version of its site and ensure that an X1 customer could reach its service directly, while still within the X1 interface, rather than toggling to a different TV-connected device.

96 These penetration levels only include existing Comcast systems. If the systems that Comcast seeks to acquire from Time Warner Cable and Charter are included, those penetration levels would be even smaller since neither Time Warner Cable nor Charter support X1.

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For these reasons, it is premature for Comcast to have reached definitive views about the best direction for the platform. At this stage of development, interactive features on the X1 platform largely have been used for cable-delivered apps that are tightly integrated with the core Xfinity TV cable service.97 The Internet apps that Comcast has launched or pursued are, like the NBC Olympics app, designed specifically to enhance the cable entertainment experience with related or enhanced content. Likewise, Facebook and Pandora were selected as the initial apps for X1 because they seemed increasingly to be a part of what customers were expecting as part of their cable ecosystem – many other providers were offering these same features98 – and because they complement the cable television experience.99 Comcast continues to consider what the best use of the platform would be, especially given that online content and services are already readily available to consumers via the more than 24 million connected TV or streaming media devices.100 Indeed, lack of consumer interest to date in Internet apps on the X1 has resulted in Comcast recently decommissioning its over-the-top “headline” app on the X1 for lack of use; even Pandora, which is [[ ]].

44(d)(1):

Comcast has engaged in discussions with various unaffiliated content providers about launching their apps on the X1 platform, but has certainly not “denied” access to its platform to these providers. Indeed, in some cases (e.g., {{ }}), Comcast is the party that initiated the discussions at issue. But even leaving this aside, edge providers may develop a Send-to-TV compatible site to enable X1 users to access the application over the platform. No permission is required from Comcast to enable “access” from the platform in this way since this feature is fully open. In this regard, Comcast has launched

97 X1 also includes traffic, weather, and a few other cable-delivered apps. See X1 Applications, Comcast Corp., http://customer.comcast.com/help-and-support/cable-tv/dashboard-for-xfinity-tv-on-the-x1-platform/ (last visited Sept. 8, 2014).

98 See, e.g., FiOS TV is the First To Make Pandora Widely Available to Subscribers, Verizon Blog (July 20, 2011), http://forums.verizon.com/t5/Verizon-at-Home/FiOS-TV-Is-the-First-to-Make-Pandora-Widely-Available-to/ba-p/327419; Press Release, AT&T Inc., AT&T Brings Facebook to Your TV Screen with New U-verse TV App, (Aug. 29, 2012), http://www.att.com/gen/press-room?pid=23248&cdvn=news&newsarticleid=35260&mapcode=consumer|news_u-verse.

99 Facebook enables customers to pull up posts and photos that are relevant to the shows they watch, while Pandora enhances the music options available on Music Choice and other offerings on the cable service by providing a more customized listening experience.

100 See Quentin Fottrell, Cable Companies Should Be Afraid of This Trend, MarketWatch, Sept. 3, 2014, http://www.marketwatch.com/story/cable-companies-should-be-afraid-of-this-trend-2014-09-03; see also TDG: Net-connected TV Penetration Tops 60% of Internet Households, Up 19% YOY, PRWeb, Feb. 13, 2014, http://www.prweb.com/releases/2014/02/prweb11582038.htm (over 60% of U.S. homes have at least one connected TV device); Aaron Baar, Good News, Roku, Streaming Media is Catching On, MediaPost, July 9, 2014, http://www.mediapost.com/publications/article/229652/good-news-roku-streaming-media-is-catching-on.html. An X1 set-top box – like any other cable set-top box – can be plugged into any of these devices (e.g., an Apple TV, a Roku, a Samsung smart TV), and an Xfinity user who wants to access an over-the-top app would simply change the input on the TV to the relevant device and navigate to the app on the device’s main menu, or, in some cases, just press a dedicated button on the device’s remote control for that particular app.

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a portal for X1 developers, which includes documentation and guidelines for building a TV-optimized website for display on the X1 platform.

In contrast, an X1 app – just like apps in the mobile space – would likely be more integrated with the device’s capabilities and services because it is offered based on a direct arrangement between Comcast and the app provider. This is not necessarily a matter of Comcast “approving” the launch of the app, but involves discussions between Comcast and edge providers contemplating an X1 app regarding requests by the app provider for its app to be integrated into the X1 menu, into the content search capabilities, and the like, which would require significant design work by Comcast; Comcast has to determine whether to commit those types of resources, which may be premature for the reasons set forth above. Many of these issues would not be “show-stoppers” for a new app launch, but they give a sense of the complexities that can be involved in a launch decision. Application providers have also asked for access to customer data, which would be incompatible with Comcast’s privacy guarantees as a cable provider; have demanded that Comcast allow the app provider to keep a visiting customer in the application (rather than returning to the X1 user interface); and have sought exemption from Comcast’s terms and conditions for the customer’s use of over-the-top applications (i.e., the applicability of any data usage plan, which Comcast does apply for use of any Internet apps over the X1, whether its own or third parties’).

44(d)(2):

To the extent this request relates to TVE services, Comcast addressed that issue in its responses to Question 43 and incorporates those responses by reference here. If, however, the Commission is asking about delivery of unaffiliated apps on retail devices in the home – such as support for the Facebook app on a TiVo or Roku device – Comcast is not involved in those decisions. Rather, the device manufacturer and app provider make such launch decisions. As noted above, an X1 set-top box can be used in conjunction with third party streaming video or connected TV devices, but this would have no impact on what and whether third-party applications were supported on or accessible over such devices. (Likewise, the use of the Xfinity TV application on a third-party device like an iPad has no impact on the support for or access to other applications on that device.)

44(d)(3):

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44(e):

Documents responsive to this request will be produced to the FCC.

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45.

Describe the extent to which retail customers who adopt Comcast’s new services, such as the “robust and innovative” services referred to on page 83 of the Public Interest Statement, are, or will be encouraged, or will otherwise find it necessary to substitute a leased CPE for a retail CPE and the extent to which future relevant services will require proprietary hardware.

RESPONSE:

As noted in the response to Question 43 above, Comcast is strongly committed to giving customers the ability to access their Xfinity services on the device of their choice. This is true for the “robust and innovative” voice services referred to on page 83 of the Public Interest Statement, which are only accessible on retail CPE (given that Comcast does not offer leased phones or other equipment for those services, although for access to voice services at home, customers will need to either purchase or lease an eMTA). It is also true for Xfinity broadband service, which permits customers to use any one of 44 certified third party modems.101 And it is true for TVE services and Xfinity TV cable services, which Comcast understands to be the focus of the question.

Comcast has a strong track record of supporting retail CableCARD-enabled devices in its cable systems, and is committed to continuing that support post-transaction. Comcast also has gone above and beyond the Commission’s CableCARD requirements by working directly with TiVo to give TiVo customers the ability to access Comcast’s VOD services on TiVo devices (which otherwise are not accessible via CableCARD). Comcast has rolled out this “Cardio” solution throughout its footprint. Furthermore, under the terms of an agreement Comcast recently reached with TiVo, Comcast has committed to continue to provide and support CableCARDs in retail devices notwithstanding the D.C. Circuit’s EchoStar decision last year vacating certain CableCARD rules.102 Comcast will ensure that all CableCARD-enabled devices will continue to have access to all linear channels in all current and future Comcast markets.103

Furthermore, Comcast’s transition to IP cable services is resulting in increased access to Comcast services over third party retail devices. X1 customers today can use the Xfinity TV app to watch essentially their entire linear cable lineup (including PEG

101 See DOCSIS Device Information Center, Comcast Corp., http://mydeviceinfo.comcast.net/ (last visited Sept. 8, 2014) (listing certified modems by vendor, including, among others, Zoom Telephonics, ZyXEL, Ubee, and D-Link).

102 As TiVo noted in its comments supporting the transactions, “Comcast has been the most supportive of enabling innovation in retail set-top boxes, thereby enabling consumers to have a robust alternative to an operator-leased set-top box.” TiVo Comments, MB Docket No. 14-57, at 1 (Aug. 25, 2014).

103 Comcast also is an industry leader in supporting Digital Living Network Alliance (“DLNA”) standards that enable the networking of cable services from Comcast-supplied set-top boxes to third-party devices in the home. Comcast was the first cable operator to deploy set-top boxes that utilized DLNA, and will be deploying DLNA CVP-2 in its XG set-top boxes. This capability will enable Comcast customers with compatible DLNA-certified CE devices to access its cable services via the home network.

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and broadcast) on IP-enabled iOS devices running 7.0 or higher, and Android devices running 4.4 or higher, as well as PCs and Macs. 104 This can replace the need for customers to lease multiple set-top boxes from Comcast. Comcast also makes its IP VOD services available through an application on Xbox 360s and Samsung TVs, which likewise can obviate the need for additional set-top boxes. And Comcast is exploring delivery of its IP cable service without the need for any Comcast set-top box at all – so that a customer could receive their in-home cable service entirely on their own IP-enabled devices.105

Moreover, pursuant to the agreement with TiVo, Comcast will make available to TiVo a non-CableCARD solution for accessing Comcast’s IP cable services (linear and VOD) on retail devices. This “Cardless Solution” would be supported in both TiVo and Comcast-supplied set-top boxes. In addition, Comcast has committed to make this “Cardless Solution” available to other CE companies and cable operators.

104 See X1 DVR with Cloud Technologies: General FAQs, Comcast Corp., http://customer.comcast.com/help-and-support/cable-tv/x1-dvr-cloud-technology-general-faqs/ (last visited Sept. 8, 2014).

105 Comcast is doing precisely this at universities today, allowing students to watch live TV and VOD content on their IP-enabled devices, including laptops, tablets, and smartphones, while on campus. See Press Release, Comcast Corp., Comcast Brings TV To Every Screen for Colleges and Universities (Aug. 21, 2014), http://corporate.comcast.com/news-information/news-feed/comcast-brings-tv-to-every-screen-for-colleges-and-universities.

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46.	Provide the following information separately for Strata Marketing, Inc. (“Strata”) and National Cable Communications LLC (“NCC Media”):

all ownership, voting, or management interests in Strata and NCC Media and the parties that hold these interests;

a description of the roles and functions of Strata and NCC Media with respect to, and separately for, national, regional, and local cable spot advertising, including, but not limited to:

the persons that do business with Strata and NCC Media;

ii.

the access, services, and products provided by Strata and NCC Media;

iii.

the criteria used by Strata and NCC Media to determine whether to provide access, services, or products to a person and the prices charged, including any affiliation with Strata, NCC Media, or a person with an interest in Strata or NCC Media; and

iv.

any alternatives to Strata and NCC Media that are available to persons that wish to place cable spot advertising; and

separately for national, regional, and local cable spot advertising, the quarterly revenues received by the Company from Strata and NCC Media since January 1, 2009.

RESPONSE:

46(a):

Comcast owns {{ }} percent of NCC Media. The remaining ownership stakes are held by {{ }}

Comcast owns {{ }} percent of Strata and {{ }}

46(b):

NCC Media serves as a representative for MVPDs (including each major cable, Direct Broadcast Satellite, and telco video provider) in the sale of their local advertising availabilities (i.e., spot cable advertising) to national advertisers. While NCC Media negotiates on their behalf, the represented MVPDs (which sometimes serve as managers of interconnects) [[ ]]. In exchange for serving as a sales representative, NCC Media receives a commission of approximately {{ }} (depending on the counterparty) of the amount of the advertising purchase. NCC Media does business with counterparties with

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whom it is able to reach mutually commercially agreeable terms. Net of NCC Media’s fees, revenue from the sale of advertisements is {{ }} among the MVPDs and/or interconnects that contributed advertising inventory to the sale on the basis of {{ }}.

By representing multiple MVPDs’ and/or interconnects’ local advertising availability inventories across multiple markets, NCC Media enables a national advertiser to reach a large audience and/or to tailor its advertising message to particular regions or particular groups of markets in an efficient manner – by making one buy instead of dozens or more. In this manner, NCC Media reduces transaction costs for national advertisers, since they can negotiate with NCC Media for advertising purchases rather than attempting independently to aggregate availabilities from numerous MVPDs and interconnects to assemble a national or regional purchase. Affiliate MVPDs also benefit from NCC Media as they are able to receive revenue for advertising availabilities without having to invest in selling such availabilities. MVPDs could, as an alternative to using NCC Media as a representative, use a different third-party representative (such as TeleRep, HRP, MMT, Katz Media and Petry Media) or contract directly with national advertisers.

Strata is a software company that provides tools that support both advertising agencies (who buy advertising time) and MVPDs (who sell advertising time). Strata software supports these buyers and sellers in such functions as billing and campaign planning, as well as providing qualitative and quantitative research and analytic software tools. Strata does business with a number of buyers and sellers of advertising, such as advertising agencies and MVPDs. While Strata provides helpful support tools as described above, advertisers do not buy or sell advertisements through Strata as a representative. Therefore, there are no “alternatives” needed to Strata to purchase or sell cable spot advertising. There are several other firms that specialize in providing software to support the advertising industry, including, for example Mediaocean, MSA, Broadway Systems, and Telmar.

46(c):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibits 46.1 and 46.2, which provide revenue Comcast received from Strata (Exhibit 46.1) and NCC Media (Exhibit 46.2) on a quarterly basis.

Comcast {{ }} but rather receives revenue from NCC Media {{ }}. Comcast does not further categorize this revenue. Given the services that NCC Media provides as described in response to Request 46(b), this revenue can be generally categorized as being from national advertisers as NCC Media specializes in providing representation for advertising sales to national advertisers across multiple markets.

As described in response to Request 46(b), Strata provides software that supports both advertising buyers and sellers. Its revenue is not susceptible to separate categorization into local, regional, and national.

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47.	Provide the following information concerning the cable interconnects that are owned by, controlled by, or managed by the Company in the relevant area:

a description of the roles and functions of the cable interconnects with respect to, and separately for national, regional, and local cable spot advertising, including, but not limited to:

the parties that do business with the cable interconnects;

ii.

the access, services, and products provided by the cable interconnects;

iii.

how the Company determines whether to give a person access to a cable interconnect, or provide related services or products to the person, and the prices charged, including the extent to which these determinations depend on whether the party is owned by, controlled by, managed by, or affiliated with the Company; and

iv.

any alternatives to the cable interconnects that are available to persons that wish to place cable spot advertising; and

a listing of all DMAs in which the Company owns, controls, or manages one or more cable interconnects, indicating the following for each such DMA:

whether the DMA also is served by one or more cable interconnects that are not owned, controlled, or managed by the Company;

ii.

the extent to which any such cable interconnects overlap or compete with cable interconnects that are owned, controlled, or managed by the Company; and

separately for national, regional, and local cable spot advertising, the quarterly revenues received by the Company from the cable interconnects since January 1, 2009, in CSV or Excel format.

RESPONSE:

47(a):

Interconnects have typically been established and subsequently managed by the largest MVPD in a particular market in order to compete more effectively in the local advertising market. In particular, participating in an interconnect (as manager or affiliate) permits MVPDs to compete more effectively for local advertising spending with other outlets, such as broadcast television, radio, Internet, print media, and direct mail, all of which sell advertising inventory on a DMA-level with far greater coverage than any individual

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MVPD. It should be noted that MVPDs generally receive only two minutes per hour of advertising availabilities on national cable networks (and none on broadcast networks) versus the 12-14 minutes per hour sold by national cable and broadcast networks. Therefore, the advertising inventory available for MVPDs to sell is considerably smaller than that of cable and broadcast networks, which sell approximately 90 percent of television commercial slots. MVPDs only account for approximately 7 percent of all local advertising sales.

The formation of an interconnect requires significant investments in personnel, research, networking, technology (to handle the processes of inserting an advertisement across multiple MVPDs and systems), and sales/marketing efforts by the MVPD that manages the interconnect. The managing MVPD of an interconnect contracts with other MVPDs in the DMA who want to participate in the local interconnects and contribute their advertising availability inventory to the interconnect for sale. The managing MVPD generally compensates participating MVPDs by distributing the revenue it generates through its sales efforts back to MVPDs [[ ]].

Comcast, when it serves as a managing MVPD of an interconnect, sells the pooled advertising inventory to advertisers, primarily those who wish to advertise across a DMA. Comcast is generally willing to represent any and all MVPDs in an interconnect. Indeed, in recent years, Comcast has actually worked to expand the involvement of otherwise competitive MVPDs (such as satellite and telcos) in the interconnects it manages. Comcast prefers to represent other MVPDs directly rather than dealing further with a middle-man or broker (such as Viamedia); these third party brokers are not necessary to facilitate any MVPD’s participation in the interconnect, and thus bring no value to the interconnect’s operation, while at the same time seeking to “free ride” on the interconnect for separate inventory sales. Despite this, Comcast {{ }} – and Comcast expects that this arrangement will move forward. Comcast does not always serve as the manager of interconnects in which it participates; in certain markets, Comcast provides its advertising inventory to the creator and manager of a local interconnect for sale (including to Viamedia in Evansville).

As an alternative to being represented through a local interconnect, an MVPD may choose to sell its advertising inventory directly to advertisers or through another representative service (such as Viamedia). MVPDs may also do combinations of these, selling some of their advertising inventory through the interconnect and others directly to advertisers or through a different representative service.

47(b):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 47.1, which lists all DMAs in which Comcast manages an interconnect. In each of the markets where Comcast manages an interconnect, this is the only interconnect of which Comcast is aware in the DMA. As interconnects, by their nature, are generally DMA specific, Comcast is not aware of any

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“overlap” with other interconnects. As discussed in response to subpart (a) above, the interconnect for a market is generally managed by the largest MVPD in a market. A major efficiency provided by interconnects is that an advertiser can purchase DMA-wide advertisements from one source (rather than having to go MVPD-by-MVPD) and so this general industry structure of one interconnect per DMA makes sense given the nature of the business.

47(c):

Information and data responsive to this subpart have been provided in machine-readable Excel spreadsheet format as Exhibit 47.2.

Interconnects, by their nature, sell advertisements at the DMA level to both “regional” and “national” advertisers. Interconnects do not generally focus on sales of local-zoned (or sub-DMA level) advertisements, and therefore “local” sales through interconnects are generally de minimis. Therefore, generally all of the revenue for an interconnect can be considered as having come from regional or national advertisers who purchased advertisements that covered an entire DMA. (In its historical interconnect billing data, the “regional” and “national” lines of interconnect-specific business are not separately distinguished.) For the interconnects it manages, Comcast receives revenue both as a contributor of subscribers to the interconnect and for management services provided by Comcast. These revenue streams are broken out separately in Exhibit 47.2. The “Comcast IC Share” figures in Exhibit 47.2 provide the total revenue that Comcast receives from the interconnects it manages on a quarterly basis.

As reflected in the notes in Exhibit 47.2, Comcast has certain limitations in its records regarding what portion of its advertising revenue can be attributed to interconnects for the period from 2009-2011. Therefore, for the years prior to 2012, Comcast has estimated revenue allocations for the purposes of responding to this request. For the years 2009-2011, Comcast allocated its total interconnect revenue between Comcast as a contributor of subscribers to the interconnect and the revenue it earned in fees for Comcast’s services managing the interconnect. Such revenue allocations were estimated based on known revenue splits in the years 2012-2014 (including revenue trends over that period). For 2009, Comcast allocated revenue to derive a total interconnect revenue for Comcast-managed interconnects (for this year, such revenue was aggregated with Comcast’s sales of its local advertising inventory in the historical data) based on the comparison of the revenue from 2010 and revenue trends. (For 2010-2014, the total interconnect revenue provided is based on exact figures.)

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48.	Provide the following information concerning the Company’s provision of cable advertising representation services in the relevant area: