FCC Martin Aims Parting Shot At Cable Industry
Outgoing FCC chairman proposes hundreds of thousands of dollars in fines for Comcast, Time Warner, other cable operators
By John Eggerton -- Broadcasting & Cable, 1/20/2009 5:41:31 AM
Related: Kevin Martin - The Exit Interview
Kevin Martin closed his chairmanship of the FCC with hundreds of thousands of dollars in proposed fines against cable operators for failing to provide sufficient information to the commission in its investigation of the migration of channels from analog to digital, changing rates without sufficient notice, and more.
Hit with the fines were a who's who of cable operators, including Comcast, Time Warner, Cablevision, Charter, Cox, Comcast, Bright House, and Harron.
The investigations were in response to complaints from Consumers Union and others that operators were migrating channels from analog to digital without lowering the price of the analog tier and in some cases raising it. Martin said in the letter that the FCC had gotten almost 600 complaints from cable subscribers. Martin called the practice "unacceptable."
Cable operators have been trying to get their customers to move to digital to free up bandwidth for advanced services, including migrating channels.
In a letter to Senate Commerce Committee Chairman Jay Rockfeller (D-W.Va.) and ranking member Kay Bailey Hutchison (R-Tex.), Martin said it had been "Unacceptable" that nine of 13 cable companies "did not provide the Commission with all of the information we requested," saying it had inhibited the investigation.
In the letter, Martin reiterated that cable rates have doubled while rates for other services have decreased in the same period of time. The cable industry points out that on a per-channel basis, the story is quite different.
"When cable operators migrate analog channels to a digital tier, consumers are forced to pay more if they wish to continue watching the same channels," wrote Martin. "Or, consumers may continue to pay the same amount to watch fewer channels. This is not the type of consumer choice that the Communications Act envisions. The commission has taken this issue seriously and I hope that Congress will as well."
The fines were proposed by the FCC's Media Bureau.
Cable operators have long thought Martin was being punative toward their industry, but Martin has stuck to his criticism of cable rates and pushed for cable to unbundle its channels.
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This is absurd.
It's inappropriate for the FCC to be doing this before Comcast's challenge to its previous ruling is settled. Comcast asserts (and I believe it's 100% correct) that the FCC does not have the authority to regulate the Internet. It's right there in the statute: it says that the Internet shall be "unfettered by state or Federal regulation." By going after Comcast again, the FCC is brazenly defying due process as well as the law.
What's more, Comcast's VoIP offering is indeed "Voice over IP," but it is not "Voice over Internet." The distinction is important. The system uses IP, but doesn't connect calls over the public Internet. It also does not consume Internet backbone bandwidth, which is a scarce and expensive resource. Therefore, any claims that the service constitutes some sort of discrimination vis-a-vis the Internet is ridiculous. The FCC is confusing IP with the Internet.
Thirdly, the fact that VoIP might be impacted by Internet bandwidth limits is actually a result of Comcast having done what the FCC wanted. The FCC insisted that Comcast make it bandwidth management non-protocol-specific. Thus, Comcast can no longer prioritize VoIP over P2P. The FCC therefore has no right to complain; Comcast is only doing what it asked.
Finally, if Comcast is doing something wrong by providing a separate channel on its cable for telephone service, isn't the telephone company equally culpable for providing analog voice telephone calls over the same line as DSL service (where VoIP might likewise be degraded if the user is maxing out his or her bandwidth)? And if either a telco or a cable company provides video over the same cable or fiber, while the Internet bandwidth provided to the customer is limited, isn't that the same thing?
Carried to its logical conclusion, the FCC's initiative would outlaw all systems in which the same physical medium is used for both Internet access and other services.
Brett Glass - 1/20/2009 4:27:39 PM EST -
Martin is correct. Cable has done a horrifying job at the DTV conversion, bending the truth so much it's hard to recognize. Oh they don't lie but they do everything short of it.
Ala Carte has been the subject of the death of certain channels. More is not better, running "Roseanne" on four different networks that 95% of all cable users get all four of, isn't better, it's just more.
There is no variation and no need to because cable and the cable channels are in a culusion to provide the most channels with the least content on each one.
Eric Post - 1/20/2009 2:28:59 PM EST
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