Re-Reg Guns of August

Activist groups take aim at cable ownership rules
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Cable consolidation opponents clearly lacked a kitchen sink or they would have tossed that in along with everything else they threw at the industry in a scathing report labeled "The Failure of Cable Deregulation."

Maybe it was the wisdom of scheduling their news conference for the slow news days of August, or maybe it was a heightened sensitivity to media-ownership issues, but there seemed to be more than the usual contingent of press in attendance, including live C-SPAN coverage.

Saying the industry had "gouged consumers, crushed competition and bullied regulators," the U.S. Public Interest Research Group (U.S. PIRG), flanked by a Who's Who of re-reg activists, last week called for new regulations to rein in the industry, chastised the FCC for failing to exercise its regulatory power over cable, and warned that the wired industry was extending its "tentacles" into the broadband Internet marketplace.

Jeff Chester of the Center for Digital Democracy even blamed cable for contributing to the growing obesity of America's youth, saying that as a gatekeeper of programming and advertising targeted to them it had to take some responsibility.

Also on hand to drive home the criticism were Mark Cooper of the Consumer Federation of America and Andy Schwartzman of Media Access Project.

For its part, the National Cable & Telecommunications Association responded that the charges were shopworn and baseless.

The FCC is currently reviewing cable-ownership rules and considering whether cable and telephone broadband service should be subject to regulations to prevent content discrimination by carriers.

The report, written by public interest lawyer Jay Halfon and gleaned from various sources, dates the laundry list of cable offenses from the restructuring and rate deregulation of the 1996 Telecommunications Act. It alleges that rates have skyrocketed, service is "some of the worst in America," consumer access to programming and a choice of broadband Internet providers is effectively denied, DBS provides no real competition, and overbuilders, which do provide competition, are few and far between because companies won't compete against each other.

U.S. PIRG's proposed solution was rolling back cable deregulation, saying it would take its report to Congress and hope to catch the attention of frequent cable critic, Senator John McCain (R-Ariz.), chairman of the Senate Commerce Committee.

Responding to the attack, Rob Stoddard, senior vice president of communications and public affairs, for NCTA said: "The wild and unfounded claims of these Washington-based advocacy groups are recycled arguments that fell out of favor a decade ago. The regulatory environment envisioned by Congress in 1996 and maintained by the FCC has fostered the most robust telecommunications marketplace in the world. It's providing a better deal for consumers, who are getting far more for their dollar. How odd that so-called consumer groups would prefer to take all that away."

U.S. PIRG's blueprint for taking all that away: 1) Return oversight of the industry to state public utility commissioners and local franchising authorities; 2) impose conditions for competition, including a la carte tiers so that consumers can get "access to channels they want at prices they can afford;" and 3) mandate nondiscriminatory access to competitive Internet service providers.

The Internet access issue could be a key one for activists.

The Internet was a powerful tool for anti-consolidation forces, which used it to help flood the FCC with comments opposing broadcast deregulation after concluding the major media were deliberately spending little time covering the issue.

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