The Right Balance - Broadcasting & Cable

The Right Balance

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Time Warner and Comcast took over their new systems last week following
the FCC's approval last month of their $17.4 billion purchase of the bankrupt
Adelphia. It wasn't a pretty example of bureaucracy at work, taking 404 days
to accomplish. But the commission's decision featured measured compromise and
suggests that the Kevin Martin-led FCC could get its act together on other
substantive issues.

The Adelphia vote was a relative slam dunk, with Democrat Jonathan
Adelstein joining the Republicans to allow Comcast and Time Warner to divvy up
the Adelphia systems.

While the deal allowed Comcast and Time Warner to grow, both will still
be under the 30% national penetration that was once the FCC standard. The FCC
also applied conditions that will ensure access to local sports programming but
did so through a binding-arbitration mechanism that encourages, but does not
guarantee, the outcome of what are essentially private negotiations. We hope
the FCC continues to encourage private negotiations as it weighs in on the new
Time Warner/NFL Network carriage fight, too.

The FCC made Time Warner and Comcast also promise to submit complaints
from leased-access programmers to arbitration, which will put to the test
long-standing complaints of foot-dragging by cable operators.

The Adelphia accord showed an FCC that was mindful of business interests
without being insensitive to competitive issues. As the number of media players
has shrunk, that kind of level-headed regulating is promising.

Even frequent FCC critic Media Access Project (MAP) had some nice things
to say. “Viewed in light of the initial predictions that this transaction
would receive prompt and complete approval, the FCC has actually looked long
and hard at the issues and imposed significant conditions on the deal,” said
MAP's Andrew Schwartzman.

Behind the FCC's rationale for allowing Time Warner and Comcast to get
bigger is the same argument that underpins the push for video-franchise reform:
Speeding the development of fast broadband, Internet phone, video-on-demand and
interactivity is a compelling government interest in a world where
“community” is being redefined by electronic rather than geographic
proximity. As Sen. Ted Stevens has noted, broadband is more a necessity than a
convenience these days.

The FCC concluded that the public's interest in clearing up the
protracted bankruptcy and giving Adelphia's subscribers the service they
deserve—a pledged $1.6 billion in improvements—outweighed the potential
downsides of letting the very big get a little bigger. We agree, but we also
urge the FCC to upgrade its decision-making speed. In a broadband age, it can
still be dial-up slow.

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