FCC Set to Clamp Down on Cable

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In a letter sent last week to the FCC, four major media leaders strongly cautioned FCC Chairman Kevin Martin on his notion of claiming more control over the cable industry than the commission now assumes.

News Corp.'s Peter Chernin, Disney Co.'s Robert Iger, Viacom's Philippe Dauman and NBC Universal's Jeff Zucker, all chief executives of powerful broadcast and/or cable networks, told Martin and the other four FCC commissioners that, “Because of vibrant competition in both programming and distribution, and because of myriad options and alternatives available to consumers, there is no conceivable justification for government intervention into this marketplace...Ill-considered and unjustified government interventions cannot be permitted to undermine this vibrant American industry.”

The letter was sent after the FCC released the agenda for its Nov. 27 meeting, loaded with potent media initiatives. As expected, Martin scheduled a vote for a release of the video-competition report, which means that he either has the two Democratic commissioners lined up, since the Republicans expressed their concerns about an FCC finding that cable has met a deregulatory threshold, or he adjusted the item.

The issue the executives were mainly responding to is Martin's assertion that cable falls under the so-called “70/70” rule, meaning that more than 70% of the nation's homes are passed by cable, and that at least 70% of those homes receive it. Under those circumstances, the FCC can assume more regulatory authority. The cable industry says far fewer than 70% of the nation's homes get cable, so the FCC is overstepping its bounds.

Republican commissioner Robert McDowell said Monday that he could vote to approve the report if the so-called “70/70” threshold part were deleted. The FCC, he said, 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% of U.S. households.”

Commissioner Deborah Taylor Tate also expressed reservations about the data the FCC used to come up with its conclusion, as has the cable industry en masse, which said its subscriber counts and household penetration have actually gone down with competition from satellite-TV providers and telephone companies.

Most notably, the Media Access Project said in a letter to the FCC last week that the 70/70 test has been met and that powerful cable operators have “squeezed out independent minority and religious programming.”

The commission is also scheduled to vote on the media-ownership review that has been ongoing for years, but not the newspaper-broadcast cross-ownership part. Martin is accepting comments on that proposal through Dec. 11 and is expected to vote on that Dec. 18 unless Congress applies sufficient pressure to delay that timetable.

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