Cable Request Lags as Members Await FCC Document
Nearly seven months after commissioners voted to ask cable operators for subscriber data (CD Special Bulletin Nov 28 p1), the FCC hasn’t requested the information. Nor have FCC members heard how the agency will proceed, said FCC and industry officials. On Nov. 27, bowing to colleagues, FCC Chairman Kevin Martin agreed to ask cable operators to report on whether they meet the so-called 70/70 subscriber threshold. As part of that agreement, Martin removed a finding from a draft video competition report to Congress that claimed the milestone had been reached. If cable is determined to pass 70 percent of U.S. homes, and 70 percent of those homes subscribe, further agency regulation of the industry would be possible. Commissioners agreed to make a direct request to cable operators for the data. However, no such request appears ready, nor have commissioners had a draft to review preparatory to approving it, industry and agency officials said.
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Among major cable operators we surveyed, all six who responded said the FCC had not asked them to say how many houses they passed in 2006 with at least 36 channels and how many households subscribed to their services. Industry long has acknowledged exceeding one prong of the 70/70 test, that is that cable passes more than 70 percent of U.S. homes. But operators claim to fall short on the other prong, saying they serve fewer than 70 percent of those homes. Bright House Networks, Charter, Comcast, Cox, Suddenlink and Washington Post Co.’s Cable One haven’t been asked by the FCC for those figures, said spokespeople. Other major operators didn’t respond to requests for information or declined comment, but there’s no indication that they got them either, said industry officials.
The NCTA knows of no member being queried for data, said a spokesman. To request such material, the commission must promulgate an order or other item demanding it. That gives cable operators a method to provide the information to the agency, he said. As a prerequisite to demanding that industry give up the data, industry lawyers and FCC officials said, the FCC must release the 2006 Multichannel Video Programming Distributor Competition Report to Congress or issue another order. Citing recent remarks by Martin, an FCC spokesman said the report isn’t done, declining further comment.
Commissioners have not talked among themselves about how to craft the data request since the November FCC meeting, said agency officials. The start of that session was delayed nearly 12 hours as members debated the draft’s 70/70 finding. To end the standoff, commissioners agreed to seek the data but came up with no guidelines for measurement, such as whether to include vacant homes and apartments, said agency officials. In voting for a redone competition report, stripped of Martin’s finding that the threshold was met, commissioners agreed to seek the data but haven’t gotten a revised version to review, said officials. Martin has told reporters the FCC is working on making the data request. The agency may be unable to issue a new form designed to obtain that information because the Office of Management and Budget, which clears such documents, may have a backlog of FCC forms, or there may be other OMB-related issues, said commission officials.
60-Day Deadline
Commissioners and those lobbying the FCC expected a 70/70 document soon after the November meeting, with speedy dispatch to operators, said agency and industry officials. Issuance would start a 60-day clock, with cable operators required to respond within that period, said an agency official. A press release issued after the November meeting said the commission would require “each cable operator to submit… information for 2006 within 60 days under penalty of perjury.”
“It’s very disappointing,” said Harold Feld, senior vice president of the Media Access Project, which contends industry met the 70/70 test long ago. “All indications are that there has not even been preliminary thinking about” how to design the document at the Media Bureau, he added. Given congressional scrutiny of the competition report, such as that from a House Commerce Committee oversight probe, “it doesn’t surprise me that Kevin Martin has been a little bit shy about putting this back on the agenda,” Feld said. “Bluntly, I don’t think the cable operators want this request to go out at all.” AT&T has found that, using certain calculations, more than 70 percent of people passed by cable systems subscribe, and it continues to want the FCC to ask the industry for data to settle the dispute since different methods produce different figures, a spokesman said. The contested draft competition report cited statistics from the Television & Cable Factbook, published by Warren Communications News (also publisher of Communications Daily), on the basis of which the FCC, making assumptions of its own, arrived at a 71.4 percent penetration figure.
Cable’s well below that, NCTA and others said. “The statistics are very clear” that cable is far below the subscriber penetration threshold, said an NCTA spokesman, citing SNL Kagan estimates that 58 percent of homes with TVs bought cable in September. “There’s no evidence that cable penetration since then has gone up,” he said. Previous FCC video competition reports have used SNL Kagan’s data. At year’s end, 56.5 percent of homes with TVs are predicted to buy cable, down from 57.5 percent on Dec. 31, 2007, SNL Kagan analyst Ian Olgeirson said. “The notion that somehow cable has passed the 70 percent threshold is ridiculous -- they're not there and they're not going to get there.”