Martin Seen Expanding Authority with Cable Threshold Review
FCC Chmn. Martin could expand his authority over cable operators by reviewing whether they have enough subscribers to warrant further regulation, said industry sources. The Commission said Fri. it will seek comments on how to measure the percentage of U.S. homes subscribing to cable service with at least 36 channels (CD Feb 13 p2). Under the Telecom Act, if that proportion exceeds 70%, the so-called 70/70 rule will give the FCC authority to impose additional regulation. The Commission said it will also ask for comments on what actions to take if it finds the threshold was met.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Industry sources we spoke with were skeptical of Martin’s intentions. The chairman most likely wants to get expanded authority to try to mandate that cable operators offer more bundles of channels, they said. An FCC report commissioned by Martin said Thurs. cable firms should offer more such packages to improve subscriber choices and possibly cut customers’ bills (CD Feb 10 p2). The request for public comment on the threshold comes as cable penetration has been on the wane due to DBS subscriber increases, leading some observers to question the timing of the inquiry.
FCC sources said the issue is one of methodology and nothing more. A source said Martin isn’t the only commissioner interested in the threshold. The person cited Comr. Copps’ comments that the Commission’s annual video competition report must include better information. That report to Congress includes information from companies on whether the 70/70 rule has been triggered.
“It’s looking for leverage,” said cable consultant Steve Effros, a former Cable Telecom Assn. president and a FCC staffer in the 1970s. Effros said he was suspicious of the timing and said other commissioners may have reasons for supporting the review. “They're looking for some way to say they have jurisdiction to do some of the things they're trying to do… like telling us how to market speech” -- such as by requiring sales of individual cable channels, he said.
Such rules probably wouldn’t stand up in court, said Effros and other cable industry officials. But the mere threat of more regulation could prompt cable operators to follow some of Martin’s wishes, said officials. The tactic has worked before: After Martin’s remarks to a Senate decency forum in Nov. that the cable industry must do more to combat raunchy TV, companies including Comcast and Time Warner unveiled family programming packages.
NCTA has told FCC officials the 70/70 rule is limited in application. It would apply only to leased access for example, when a cable operator leases a channel to a programmer, the group said in an FCC filing. Asked about the pending inquiry, a spokesman pointed to that filing and others, and said the trade organization will likely have comments in the proceeding. He didn’t elaborate.
The Commission would have “carte blanche” if cable exceeded the penetration threshold, said a source. Previous competition reports have been “sloppy” in their measurement of the threshold, said the person. The 2002 competition document said the FCC was “unable to resolve this factual question.” It said organizations provided varying figures. “The number of homes passed depends on the data source used,” said the document, released Dec. 31, 2002. Another report, covering 2003, said the Commission lacked sufficient information: “We report data and anecdotes submitted by the commenters and note that we did not receive information on a number of issues raised.” It said those topics included “data on the benchmarks.”