Washington

Martin Says FCC Has More Power to Regulate Cable

11/12/2007 02:38:00 AM Eastern

FCC Chairman Kevin Martin says the commission plans to invoke the so-called 70/70 threshold to justify new regulations on the cable industry. That would put the deregulatory-minded Republican chairman on the same page with anti-consolidation groups like Media Access Project, (MAP) which has pushed the FCC to invoke the rule, saying the cable industry has become sufficiently dominant. 
Kyle McSlarrow, president of the National Cable & Telecommunications Association, says the FCC would be twisting statistics to justify intruding into a marketplace that is working fine.
MAP has argued that the test--70% cable penetration with 70% of those taking cable service--has been met. Martin agrees. But the cable industry disagrees, and that means the FCC can do a host of things that promote program diversity. 
The finding would give the FCC the power to impose programming conditions, like the program unbundling proposal--effectively a la carte at the wholesale level--that the chairman has proposed, as well as lowering the rates charged for leased access. According to the Communications Act, the commission can "promulgate rules necessary to provide diversity of information sources when cable systems with 36 or more channels are available to, and subscribed to by, 70 percent of U.S. households." 

It also could allow for the capping of growth of large cable companies like Comcast and Time Warner.

The 70/70 test was established in the section of the 1992 Cable Act dealing with leased access, which requires cable operators to reserve 10%-15% of their channel capacity to lease to independent programmers. But while the cable industry reads the law narrowly and says the test applies only to regs regarding the pricing of leased-access channels, MAP argued that, instead, it was a way to give the FCC broad re-regulatory powers, and Martin apparently agrees. 

“The finding will provide the commission with additional authority to assure that there is opportunity for additional voices,” Martin told The New York Times in an interview published Nov. 10. “It is important that we continue to do all we can to make sure that consumers have more opportunities in terms of their programming and that people who have access to the platform assure there are diverse voices.” 
"Every independent analysis of the marketplace shows that cable serves less than 70 percent of the nation's households and even the FCC staff concluded last year that cable was well short of this threshold," McSlarrow said in an e-mail to B&C. "The provision itself is a relic of decades old regulation and there is no basis for reviving it now; twisting statistics in order to breathe life into this rule is simply another attempt to justify unnecessary government intrusion into a marketplace where competition is thriving and new technology is providing consumers more choices, better programming and exciting new interactive services."
Martin has been pushing the cable industry to deliver its programming a la carte, and to unbundle program tying arrangements in which several cable channels are sold together. Martin has said that raises prices while forcing operators to take channels they don't want to get the ones they do, just as he says not providing a la carte to subscribers. 

Jeff Chester of the Center for Digital Democracy, another consolidation critic, cautions that the 70/70 rule isn't a glide path to a deregulated cable industry. "[T]he focus of any FCC rules changes should be on how to ensure real programmatic diversity, including shows and channels owned and managed by women and people of color," he says. "If all we get is an a la carte system where one can merely pick and choose from the narrow content choices now offered us, then we will not be making real progress." 

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