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FCC Chair Forced to Compromise on Cable Regulation

By Frank Ahrens
Washington Post Staff Writer
Wednesday, November 28, 2007

The Federal Communications Commissions voted for a set of watered-down cable regulations late last night, as increasing tensions among the agency's five members allowed the industry to largely avoid tough rules.

Under the new regulations, cable companies will for the first time have to give the FCC the most complete data available on how many subscribers they have. The FCC also lowered the price that cable systems charge smaller programmers, such as religious community broadcasters, to lease space on unused cable channels.

Yesterday's meeting followed a flurry of late-night activity Monday and throughout the day Tuesday, as commissioners sparred with embattled FCC Chairman Kevin J. Martin, who they say has rushed the commission toward unmerited action on cable and other issues.

The fight over new cable regulations was so contentious that yesterday's meeting began 12 hours after its scheduled start, as Martin and the four other commissioners edited and re-edited the proposals, and concluded after 11 p.m.

Martin is taking heat from the cable industry as well, which accuses him of unfairly trying to crack down. The industry says Martin is attempting regulatory maneuvers designed to achieve his ultimate goal: requiring cable companies to offer their channels on an a la carte basis, allowing subscribers to buy only the channels they want.

Martin has said consumers should not have to pay for channels they may find objectionable, such as MTV or FX. The cable industry says that adopting an a la carte system would actually raise prices and limit selection by forcing a number of lesser-watched channels off the air.

Leading up to last night's meeting, Martin fought with the cable industry and some commissioners over a new study he championed that suggests that more than 70 percent of Americans who can subscribe to large cable packages do so, opening the door for long-dormant federal regulations designed to keep cable companies from growing too big.

If it were determined that the 70 percent threshold has been met, the cable industry could face a raft of regulations, including a national ownership cap.

But after days of struggle, Martin capitulated last night and acknowledged that the new study may not be definitive enough to trigger new regulations. Instead, he and the four other commissioners compromised on a measure that would require the cable industry to provide more detailed information than it currently does on its number of subscribers.

"I think it's important that the commission is taking steps not only to try to provide the opportunity for diverse programmers to get on cable but also to make sure we're gathering the most accurate and reliable data to determine what conditions exist in the video industry today," Martin said in an interview last night.

Increasing tensions within the five-member commission boiled over leading up to last night's vote. Martin received the harshest criticism from fellow Republican commissioner Robert M. McDowell and Democrat Jonathan S. Adelstein.

Both said they were prevented from seeing the FCC's data on cable subscribers until they asked Martin's office for the data Monday night. They showed that only 54 percent of U.S. households that can get cable subscribe to large packages -- a number well below the 70 percent threshold required for new regulations.

"They're trying to hide the ball from their own team," Adelstein said in an interview last night. "That's why the data was suppressed -- because it conflicted with the outcome he sought."

Adelstein accused Martin's office of trying to "cook the books" to arrive at the 70 percent threshold.

McDowell called Martin's study "the only fig leaf that could be found to trigger an avalanche of unnecessary regulation" on the cable industry.

Last night, Martin said that nothing was suppressed and that he was trying to give fellow commissioners the most accurate data.

"We applaud the leadership of each commissioner who questioned and withstood the attempt to use incomplete data in order to justify greater regulation that is completely unwarranted by the competitive marketplace," said Kyle McSlarrow, president of the National Cable & Telecommunications Association, the trade group of big cable companies.

The messy fight over cable has caused some to question Martin's leadership of the FCC.

Last week, Rep. John Conyers Jr. (D-Mich.) sent a letter to Martin questioning his management style and asking how much time he had given the public to comment on certain issues and given fellow commissioners to study them.

"To maintain public confidence in the working of administrative agencies, it is critical that the agency decision-making process is transparent and open to public review and comment," Conyers wrote to Martin. "Yet recent media reports suggest that under your chairmanship, the FCC is conducting its decision-making in just the opposite manner."

An FCC official, speaking on the condition of anonymity because of continued dealings with Martin, said: "We are getting a growing number of questions from the Hill asking about commission processes. There are a lot of legitimate concerns and problems."

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