Cablevision 2011 Annual Report Download - page 18

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Clearview Cinemas
Clearview Cinemas, as a smaller regional film exhibitor, competes with a number of large theatre chains
and independent theatres with respect to acquiring licenses to films and attracting patrons. The principal
competitive factors in obtaining films from distributors include licensing terms, seating capacity, location,
prestige of the theatre chain and of the particular theatre, and quality of projection and sound equipment.
Most of our competitors are in a stronger competitive position than Clearview Cinemas based upon these
factors. We believe that the principal competitive factors in attracting film audiences are the availability
of marketable films, the location of theatres, theatre comfort and environment, projection and sound
quality, 3D capability, level of service and ticket price. The theatre exhibition industry also faces
competition from other motion picture exhibition delivery systems, such as network, syndicated, on-
demand and pay television; DVD, and other home video systems; DVD by mail services such as Netflix
and Red Box and the availability of films over the Internet.
Regulation
Cable Television
Our cable television systems are subject to extensive federal, state and local regulations. Our systems are
regulated under congressionally imposed uniform national guidelines, first set forth in the Cable
Communications Policy Act of 1984 and amended by the Cable Television Consumer Protection and
Competition Act of 1992 and the Telecommunications Act of 1996 (collectively, the "Federal Cable
Act"), as well as under other provisions of the Federal Communications Act of 1934, as amended. The
Federal Cable Act, Federal Communications Act, and the regulations and policies of the FCC affect
significant aspects of the Company's cable system operations
The following paragraphs describe the existing legal and regulatory requirements that are most significant
to our business today.
Franchising. The Federal Cable Act requires cable operators to obtain a franchise in order to provide
cable service. Regulatory responsibility for awarding franchises rests with state and local franchising
authorities. Federal law prohibits our franchising authorities from granting an exclusive cable franchise
to us, and they cannot unreasonably refuse to award an additional franchise to compete with us. In the
states in which the Company operates, New York, New Jersey and Connecticut have enacted
comprehensive cable regulation statutes that are applicable to cable operators and other providers of video
service, such as Verizon and AT&T; however, all of the states in which we operate have consumer
protection laws that apply to us. Although the terms of franchise agreements differ from jurisdiction to
jurisdiction, they typically require payment of franchise fees and contain regulatory provisions
addressing, among other things, upgrades, service quality, cable service to schools and other public
institutions, insurance and indemnity bonds. State and local franchising authority, however, must be
exercised consistently with the Federal Cable Act, which sets limits on franchising authorities' powers. It
restricts franchising authorities from imposing franchise fees greater than 5% of gross revenues from the
provision of cable television service, prohibits franchising authorities from requiring us to carry specific
programming services, and protects us in seeking franchise renewals by limiting the factors a franchising
authority may consider and requiring a due process hearing before denial of renewal.
Pricing and Packaging. The Federal Cable Act and the FCC's rules regulate the rates that cable operators
may charge for basic video service, equipment and installation. None of these rules applies to cable
systems that the FCC determines are subject to effective competition, or where franchising authorities
have chosen not to regulate rates. For our New York metropolitan service area cable television systems,
the FCC has made "effective competition" findings in the majority of our communities covering
substantially all of our customer base. For our Optimum West service area cable television systems, we
have obtained such a ruling covering over 80% of our customer base.