The Perplexing Chairman - Broadcasting & Cable

The Perplexing Chairman

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There are plenty of reasons to criticize FCC Chairman Kevin Martin, ranging from his attacks on TV content to an almost Ahab-like determination to stick the harpoon of a la carte into the nearest cable leviathan.

But his modest deregulatory proposal on newspaper-broadcast cross-ownership hardly merited the smackdown he got from Democrats on the commission and Capitol Hill. Frankly, it was too insignificant for our tastes. We're not sure why the anti-consolidation activists weren't declaring victory rather than rending their garments over a compromise in which Martin agreed to drop all the other proposed deregulatory changes from 2003, and to settle for just a watered-down change to the ownership rule.

If you recall, a federal court had concluded the FCC was on solid ground in suggesting that the cross-ownership ban was no longer in the public interest.

Under Martin's plan, newspaper-broadcast cross-ownership would only be allowed in top 20 markets, and only if the station involved is not one of the four best-rated stations in town. The FCC will consider combos in smaller markets on a case-by-case basis, but the commission will use a series of public interest tests. That proof of qualifications didn't sway anti-consolidation zealots. For those who think the media is already too big, any more deregulation apparently is a non-starter, even if it could save struggling newspapers.

Even Martin's modest proposal may fall victim to pressure from Congress, which wants Martin to hold off on a December vote on the matter. We hope he can resist. It is time to give broadcasters some regulatory certainty, no matter how limited, at least for the minute or so before someone takes the new rule to court.

Martin also disappointed cable companies. In the hands of the chairman, “70/70” is the gauge of the re-regulatory shotgun aimed at the cable marketplace.

Martin said last week the FCC was prepared to find that cable had met the so-called “70/70” test of market concentration (70% penetration with 70% subscribing), which would conveniently buttress his efforts to institute multicast must-carry, program unbundling, leased-access rate reductions and more. But questions arose over the FCC's numbers, and it seems like a case of picking the data that supports your conclusion. Virtually nobody believes 70% of all households subscribe to cable. Indeed, as our cover story this week points out, cable's market share has been declining due to competition from DBS and the telcos.

We advise the FCC to proceed with the media ownership vote, but hold off on any 70/70 finding until it gets better data. And we would encourage cable operators, broadcasters and publishers to redouble their efforts to convince this FCC chairman to adjust his aim more toward helping all media rather than stifling them.

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