Republican FCC Chairman Martin Needs Help from Democrats

Republican FCC Commissioner McDowell Rails Against Cable 70/70 Finding, Broadcast-Newspaper Cross-Ownership Vote 11/19/2007 08:02:00 AM Eastern

It looks like Federal Communications Commission chairman Kevin Martin will have to rely on the commission Democrats if he wants a vote buttressing the FCC's power to regulate cable.

Robert McDowell

Republican FCC commissioner Robert McDowell said that based on what he has seen so far of the data backing a finding that cable has reached a reregulatory threshold, he would not sign off on the report containing that finding, adding that the FCC's change in methodology "screams out for public comment, and we haven't had that."

He said the FCC for years has been relying on a particular methodology and "the plucking of one study to support what may be a predetermined outcome I think deserves more public comment."

McDowell and fellow Republican commissioner Deborah Taylor Tate asked for more information about the data last week after Martin let it slip to The New York Times that the FCC had concluded for its latest video-competition report that cable had reached the 70% penetration, 70% subscribership level that could, as McDowell put it in a speech to The Media Institute in Washington, D.C., lay the groundwork for unprecedented reregulation of cable.

"Increased competition among newspapers, broadcast radio and television, cable television, satellite radio and TV and the Internet have all been cited by many, including the chairman, over the years as the evidentiary basis for updating or eliminating the newspaper-broadcast cross-ownership ban," McDowell pointed out. "These media, [Martin] maintains, are all competing for the attention of the same customers and, therefore, advertising dollars.”

He continued, “At the same time, however, he is asserting that the cable industry, and the cable industry alone, is facing less competition and should be subject to more regulation. This is a radical departure for the commission -- a departure being made without sufficient chance for public comment."

McDowell said the video-competition report has been teed up for a Nov. 27 vote, as likely will be a proposal by the chairman to impose some form of arbitration on program-carriage disputes. "We will see how many votes there are for [the report]," he said, but he would not comment on which way he might vote on arbitration.

McDowell also confirmed that Martin wanted to cut leased-access rates by 75%. The chairman has argued that this would help minorities and others to gain access to cable channels and increase program diversity.

McDowell said he would let cable speak for itself as to what level of hell it was in, but he did say, with tongue firmly in cheek, "I’ve heard that a graffiti artist emblazoned across NCTA’s [the National Cable & Telecommunications Association] door the motto: ‘The beatings shall continue until morale improves.’”

McDowell also borrowed -- with credit -- a line from a story by B&C's Jon Hemingway to describe the cable industry's current regulatory woes: "Cable investors are sleeping like babies these days -- they're more likely to wake up every few hours and cry."

"I'm not here to spark a firestorm," he said. "That has already happened. The flames are rising and the heat is on."

McDowell said that beyond just getting a better explanation of why the FCC used the data it did, he has "a lot of questions that need answering … thus far to no avail." They include: why the FCC is "suddenly changing its evidentiary standard and methodology just for this one industry?"; how that decision will affect other analyses and proceedings, such as the XM Satellite Radio-Sirius Satellite Radio merger; whether the shift "weakens arguments for updating the cross-ownership ban”; and how the commission reconciled "decades of data showing more convergence and more competition among more delivery platforms with this sudden reversal."

McDowell said he was withholding any final opinion on Martin's proposal that the newspaper-broadcast cross-ownership ban be lifted for stations below the top-four rated in the top 20 markets, pointing out that he had not seen any draft of the rules.

But he did say that in contrast to rushing a decision on the so-called 70/70 threshold, the FCC had rushed through the media-ownership proceeding "the way a slug races across a garden."

McDowell may not have weighed in on Martin's modification of the ban, but he suggested that the commission could be in danger of imperiling a decision after plenty of public input. "I just hope the commission doesn’t fumble the procedural ball now that it’s fourth down and goal," he added.

McDowell said he thought broadcasters' opponents on the media-ownership issue had done a better job of making their points, although he conceded that broadcasters had been pushing harder on other issues.

"While broadcasters have prioritized their opposition to the XM-Sirius merger and the use of TV white spaces over their advocacy for relief under media-ownership rules," he added, "their opponents have skillfully recast the debate into whether old and new media should live under additional regulations, not fewer."

Helping in that effort has been a parade of witnesses hammering broadcasters and the FCC at public hearings. Broadcasters have been talking about public service rather than competitive threats from new media, he said, suggesting that broadcasters could have done a better job of making those points. "The legal question before us involves some measurement of the competition faced by broadcasters,” he added. “Much of their oral testimony fell short of shedding light on that subject."

McDowell, who has a dry and ready wit, took gentle aim at the range of the public comment he has faced at the media-ownership and localism hearings, while professing ultimately to love what that give and take says about our system of government.

"We have been yelled at about the Iraq war, global warming, the tyranny of America’s copyright laws and the need to legalize drugs, among other topics,” he added. “And then there was the fellow in Los Angeles who had a very strong opinion about the Peloponnesian War. Now, I don’t mean for this to sound like a copout, but that was before my time at the commission."