FCC Could Extend Reach To Cable TV
Tuesday, November 27, 2007
The Federal Communications Commission is scheduled to vote today on whether it will consider applying broad regulations to a cable television industry that has been largely unregulated at the federal level for more than 20 years.
FCC Chairman Kevin J. Martin is pushing the commission to take up the issue, but support among other members is uncertain and the vote is part of a crowded agenda still being assembled last night in a process one staff member called "chaotic."
Martin's proposals have provoked furious opposition from the cable industry.
A vote could begin a process resulting in a national cap on cable ownership, with no cable company allowed to have more than 30 percent of all U.S. subscribers, a ceiling that Comcast Communications is near. It could also reduce prices that cable companies could charge smaller or independent programmers to lease access on unused channels.
The FCC has the authority to impose such regulations only if 70 percent of all U.S. households are able to subscribe to a cable service with at least 36 channels and if 70 percent of those households subscribe to such service. The first threshold was crossed years ago; nearly all U.S. homes are now "passed" by cable, to use the industry term.
Until now, there has been no dispute over the second threshold: No study from the cable industry, the FCC or an independent firm had definitively put the second number at 70 percent.
But this year, the independent research firm Warren Communications told the FCC that the total number of U.S. households that subscribe to a cable system that gives them at least 36 channels is 66,661,544. Dividing by 93,373,707 -- the total number of U.S. television households passed by a 36-channel cable system, according to the U.S. Census -- yields a percentage of 71.4.
This means the FCC may be able to give itself the authority to propose regulations on cable that the industry and several lawmakers say would cost untold millions of dollars to comply with. The added burden could also "undermine the ability of the telecommunications industry to provide real, long-term consumer benefits," according to a letter sent to the FCC yesterday by four members of the Senate Commerce Committee.
Any action the FCC takes would have little immediate impact on consumer cable bills or carriage issues, such as the ongoing fight between cable companies and the National Football League, which has taken some games off broadcast television in an attempt to build a cable channel of its own.
But the new study -- and its crucial finding -- is at the center of a raging fight between the cable industry and Martin, who has taken positions unfavorable to cable. Martin, for example, has pointed to rising consumer cable bills and argued that subscribers should have the option to pay for only the cable channels they want, also known as an "a la carte" proposal. (That proposal is not on the agenda.)
Martin would need two other votes from the five-member commission to set in motion the process that could lead to new cable regulations. Fellow Republican commissioners Robert M. McDowell and Deborah Taylor Tate have expressed doubts about the Warren study and may vote against Martin. Michael J. Copps, a Democrat, is likely to side with Martin. The fifth vote -- Democrat Jonathan S. Adelstein, known as a friend of consumer groups, a foe of media concentration and a natural ally of Martin's on the proposal -- has also expressed doubts, saying Martin is rushing the process.
"We should be basing our decision on the facts, not on expediency," Adelstein said last night.
"If Adelstein doesn't vote for it, it's going to cause an uproar in our community," said Gene Kimmelman, vice president for federal and international affairs at Consumers Union, a watchdog group that advocates cable regulation because it contends that the industry is a largely unchecked monopoly.
Consumers Union produced a study last week that puts the proportion of U.S. cable subscribers at about 71 percent, mirroring the Warren finding.
The cable industry's most recent studies put the subscription rate well under 70 percent, arguing that the industry has lost subscribers to the satellite services Dish Network and DirecTV.
The big cable companies are making a last-minute push to fend off new regulations and have received some Capitol Hill support.
Yesterday's letter, from the Senate Commerce Committee's Jim DeMint (R-S.C.), John E. Sununu (R-N.H.), Kay Bailey Hutchison (R-Tex.) and Gordon Smith (R-Ore.), was preceded last week by a similarly strongly worded letter from 24 Republicans on the House Commerce Committee, saying new regulations on the cable industry "would be harmful to innovation and consumers."