McSlarrow: Martin’s Cable-Price Data Are Inaccurate

National Cable & Telecommunications Association President Fires Back at Federal Communications Commission Chairman in Letter to House Telecommunications and Internet Subcommittee Ranking Members

By John Eggerton -- Broadcasting & Cable, 2/15/2008 1:37:00 PM

As promised, National Cable & Telecommunications Association president Kyle McSlarrow sent a letter to the ranking members of the House Telecommunications and Internet Subcommittee explaining why he thinks Federal Communications Commission chairman Kevin Martin is using inadequate cable-price data to create a picture that is incomplete and inaccurate.

Yes, cable rates have risen, McSlarrow, said, but the value of cable service has increased even more, and it now includes phone-service competition that can save consumers billions of dollars.

McSlarrow pulled no punches, saying that the chairman failed to modernize the FCC database, failed to admit that he was using outdated data and even suppressed data that showed a decline in price-per-channel of cable service.

McSlarrow telegraphed the counterpunches in a Hill hearing Wednesday at which Martin had a cable-price chart entered into the record in defense of cable policies that he has said are intended to lower prices and increase consumer control.

“In testimony before your subcommittee Wednesday," McSlarrow wrote in the letter to chairman Ed Markey (D-Mass.) and ranking member Cliff Stearns (R-Fla.), "FCC chairman Martin sought to justify his repeated and controversial efforts to impose numerous burdensome regulations on the cable industry by claiming that cable prices have risen by nearly 100% over the past 10 years. By omitting important information, his continued use of these data paints a picture that is both deceptive and false. Your subcommittee deserves, and should expect, the leader of any expert agency to provide you with accurate and complete information."

McSlarrow added that any analysis that does not take into account the difference in the service cable provides now compared with 10 years ago is "crudely incomplete." He pointed out that a decade ago, the average number of channels was 45 analog offerings, while the majority of subscribers currently get digital and hundreds of channels, including video-on-demand and interactive services "not even contemplated" back in 1995.

"These are not small changes," McSlarrow said. "They represent a sea-change in the video offerings available to cable customers and a fundamentally different value proposition for most consumers. Chairman Martin’s public comments on this subject utterly ignore these basic realities."

McSlarrow offered his own statistics, saying that on an "inflation- and services-adjusted basis," the cost of cable service has actually fallen 7% annually since 1995.

He added that Martin is pretending that the issue is simpler than it is and using data that are incomplete or outdated and that ignore the customer experience of more and better channels.

A spokesman for the chairman had not returned a call at press time, but the battle between Martin and the cable industry over price and value is not a new one, with Martin invoking cable-price increases frequently and the NCTA just as frequently countering that a measurement that does not include the increase in value is patently unfair.