Commissioners Skeptical on Cable Data in FCC Report
Most commissioners are skeptical of data in a coming FCC report on video competition showing that cable operators have passed a threshold that would subject them to more regulation, said agency sources. They said at least three commissioners fear there may be too many qualifiers on data showing more than 70 percent of homes passed by cable systems subscribe to the service for the FCC to rely on them. Save for Chairman Kevin Martin, all will give close scrutiny to the report, said another source.
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The draft 2006 video competition report to Congress that Martin has circulated relies on two items from the Television and Cable Factbook, published by Warren Communications News (which also publishes Communications Daily). Calculations using the data indicate 71.4 percent of homes passed by cable systems subscribed to the service as of Oct. 10, FCC officials said (CD Nov 14 p2). But some commissioners seem concerned that that figure doesn’t square with other research, agency sources said. The video competition report uses the Factbook statistics to show that cable operators pass the so-called 70/70 test because 36 channels are available to more than 70 percent of American homes and that percentage of cable-served homes subscribe.
Commissioners Robert McDowell and Deborah Tate want more information on any data limitations, they wrote Wednesday in a letter to Warren Communications News. “We wanted to take this opportunity to ensure that at least these two Commissioners are indeed seeking trustworthiness, truthfulness and viability of the data in question,” they wrote. Warren never gave the FCC any cable penetration rate figures, said Chairman Paul Warren. The company gave the commission only the total number of cable subscribers and total number of homes passed, he said in a written statement. Those numbers are 67.1 million and 94.2 million, respectively. “As far as we know, we are the only data gatherer who directly contacts each individual cable owner and cable system to gather data,” said Warren. “However, not every cable owner or system responds to our requests for information, just as not every cable operator responds to the FCC requests for similar information.” But other FCC officials said the Martin report cites no caveats, and lack of such qualifiers are what concern commissioners.
NCTA officials are meeting with commissioners to argue that the cable industry shouldn’t come under more regulation, President Kyle McSlarrow told reporters Wednesday. NCTA does not believe the industry has met the second prong of the 70/70 test because other research firms’ data have less than 70 percent of households subscribing to cable. “I am confident we will have the opportunity as we have in the past to make our case to them,” said McSlarrow. “We live in a competitive marketplace” and therefore the industry shouldn’t be subject to additional rules.
McSlarrow said the cable industry is being singled out by Martin for more regulation as video competition increases. He called on the other commissioners to help reverse that trend, and said members of Congress are upset, too. An FCC spokeswoman said the agency is trying to ensure that consumers benefit from additional competition. “Our focus is not on the welfare of a particular industry but the welfare of consumers” and ensuring they get more and better service for lower prices, said the spokeswoman. “Consumers have not seen those benefits from cable,” she added, citing a 93 percent increase in cable prices from 1995 to 2005.