« Showdown over NFL Network? | Main | Fiber farmers DEA-nied »
November 27, 2007
The FCC’s Cockamamie Cable Numbers
FCC Chairman Kevin Martin’s plan to impose greater regulation on the cable industry may have hit a snag as members of Congress, along with Martin’s fellow commissioners, have questioned the chairman’s rationale and methodology for the new regulatory proposals, the Wall Street Journal reports.
The FCC is scheduled to meet today (11/27) to vote on a number of proposals aimed at greater FCC regulation, but as of this morning, it had become questionable whether the commission would indeed take up the issue.
The Wall Street Journal reports that four Republican Senators and 23 Republican House members have expressed “deep concern” about the new regulatory plans in a letter to Martin. A particular point of dispute is a new data in a report from Martin’s staff that found that 71.4 percent of households with access to cable subscribe. Under a 23-year-old law, the FCC has the right to impose greater regulations if cable adoption goes above 70 percent. Martin is using the findings in the staff report as justification to exert broader authority over the cable industry.
Trouble is, this 71 percent finding by Martin’s staff runs counter to all other current market research. The new FCC report says cable TV is available to 94.2 million U.S. homes, of which 67.2 million subscribe. These numbers are risible. To find anything close you have go back almost eight years to 2000, when Cable World magazine reported that cable TV passed 101.1 million homes, of which 67.3 million subscribed, Even then, this was still less than the 70 percent threshold.
By contrast, the Journal reports market research firm Sanford C. Bernstein’s findings that cable currently passes 105.7 million homes, of which 55.1 million, or 52 percent, subscribe. Bernstein’s figures track with SNLKagan’s, the market research firm the National Cable Telecommunications Association cites on its Web site, which found that, as of June 2007, cable passed 122.5 million homes with 65.3 million—53 percent—subscribing.
Equally troublesome is that Martin’s report uses only one undisclosed source, and disregards contradictory data from previous FCC studies. Martin wants to use these questionable numbers to ram through a slate of proposals would regulate rates cable companies charge to programmers who want to lease channel space to setting up an FCC arbitration board to settle disputes over the way cable companies price cable network programming. Yet the chasm between Martin’s numbers and those from respected market research is so great that it cries out for explanation and documentation. Even Martin's fellow GOP Commissioner Robert McDowell has questioned the Chairman's methodology, saying it marks a "radical departure for the commission -- a departure being made without sufficient chance for public comment."
It is gratifying to see that Martin’s overreaching is not going unchallenged. While the kindest way to put it is that Martin is pursuing his regulator job aggressively, one cannot help but notice the pattern of action against the cable sector, which led the Wall Street Journal in an editorial yesterday to openly speculate whether Martin has a personal animus against cable. This would not be the first time Martin has discovered “new data” to support a sudden reversal in cable regulatory policy – recall that earlier this year his staff produced a report that found that a la carte cable pricing would least to lower prices and more choice. This “new finding” directly contradicted years of FCC data and recommendations. In addition, Martin has used agency power to arbitrarily invalidate large-scale contracts between cable companies and building owners, and has singled out cable networks for fines for “indecency” as part of an effort to extend content regulation from over-the-air broadcasts to cable.
Somebody stop this guy.
Posted by steve.titch at November 27, 2007 07:58 AM
Comments