FCC’s Cable Plans Draw Fire


By: Wall Street Journal

House Republicans Dispute the Need For More Regulation
By AMY SCHATZ

Federal Communications Commission Chairman Kevin Martin’s proposal to impose new regulations on the cable industry is running afoul of some fellow Republicans, who are questioning his focus on reining in cable companies.

Today, 24 House Republicans plan to deliver a letter to Mr. Martin, chiding him for a “misguided and harmful” proposal that would give the FCC more authority to regulate the cable industry. Mr. Martin’s proposal is “inappropriate at best and contradicts the statute at worst,” according to the letter, which was signed by all but two of 26 Republicans on the House Commerce Committee, including Reps. Joe Barton and Ralph Hall of Texas and former House Speaker Dennis Hastert of Illinois. They are asking for more information about all cable regulation under consideration at the FCC and more information from Mr. Martin about why he believes the cable industry has grown large enough to trigger new regulations.

“It is a concern that he may be moving away from the light-touch regulation to a much greater role for regulation,” said Rep. Marsha Blackburn of Tennessee.

The letter is the latest salvo in the war between the cable industry, which has worked at achieving broad bipartisan support in Congress, and Mr. Martin, who has suggested a variety of proposals over the past two years to rein in cable companies, including his suggestion that cable operators offer channels on an a-la-carte basis.

A spokeswoman for Mr. Martin said he hadn’t seen the letter and couldn’t comment. In the past, Mr. Martin has said his focus on the cable industry has been in the interests of consumers, who have seen cable prices climb faster than the rate of inflation for several years. He believes customers would save money if they could pick which cable channels they want and pay for them individually.

The controversy over Mr. Martin’s latest cable-regulation proposal comes at an uncomfortable time for the FCC chairman, who is facing criticism from all sides for a separate plan to modernize media-ownership rules by dropping a ban on cross ownership of newspaper and broadcast properties in the largest 20 markets in the country.

Earlier this summer, Mr. Martin began circulating an annually produced report on video competition among the other FCC commissioners. In the report, which the agency’s five commissioners could vote on as soon as next week, the FCC uses outside statistics to support the notion that the cable industry has grown large enough to trigger an obscure 23-year-old provision that gives the FCC authority to impose new regulations. Under the law, if 70% of households can get cable and if 70% of those households actually subscribe, the FCC can impose rules to ensure programming diversity.

The FCC would gain new authority under the “70/70 rule,” which applies only to cable companies, not satellite-television or phone companies.

There is little debate about whether cable is available to at least 70% of households, but wide disagreement about the total number of subscribers. For the past two years, the FCC has placed the figure at around 60% and noted that the industry has been steadily losing subscribers to satellite-TV providers and to phone companies. In the new report, which hasn’t been made public, the FCC said cable subscribership is now slightly above 70%.

Mr. Martin’s analysis is being championed by public-interest groups, including Consumers Union, which submitted an analysis yesterday also showing how cable subscribership may be above 70%.

Internal debate about the statistics Mr. Martin uses has heated up in the past week or so, with the other two Republican FCC commissioners asking for more information about the numbers used. One of those Republicans, Robert McDowell, said in a speech to media attorneys in Washington yesterday that Mr. Martin’s data collection in the new report is “a radical departure for the commission — a departure being made without sufficient chance for public comment” and brings into question other FCC proceedings, including the media-ownership debate. (Last year, the FCC used three different data sources for the annual report on cable penetration. This year, the FCC has used data from one source.)

Write to Amy Schatz at Amy.Schatz@wsj.com

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  1. Pingback by 2008 Presidential Election » FCC’s Cable Plans Draw Fire

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