Cable industry's outreach halts FCC bid for additional control

WASHINGTON: Major outreach by cable industry representatives working with minority and other advocacy groups helped block a recent FCC bid to exert more regulatory control over the industry.

WASHINGTON: Major outreach by cable industry representatives working with minority and other advocacy groups helped block a recent FCC bid to exert more regulatory control over the industry. The groups perceived the measure as a step toward "a la carte" cable channel pricing and distribution.

FCC Chairman Kevin Martin had sought to invoke the "70-70" rule, which gives the FCC greater industry regulation if 70% of households have access to cable service and 70% of those households actually subscribe. But in communications outreach to Congress, the White House, and the media, opponents questioned the data Martin used to justify the ruling.

"We had all the major cable CEOs coming [that] week for a meeting anyway, so they took the opportunity to go on the Hill to voice their opposition," said a cable industry insider who spoke on background. "Then we supplemented that with third-party efforts.

A lot of the free market folks were blogging or writing on the issue," including the National Review and Heritage Web sites and The Wall Journal Street editorial page.

The effort to invoke the 70-70 rule was postponed after a November 27 meeting during which other commission members questioned the data used to justify more oversight. Cable companies now have 60 days to provide input on the data.

The outreach from those opposed to 70-70 included industry executives who lobbied with White House staff and grassroots mobilization of both media and Congressional outreach. Opponents rallied various minority and other advocacy groups that were also against the measure, including the NAACP, National Association of Latino Elected and Appointed Officials, and the National Gay & Lesbian Chamber of Commerce.

Support for the 70-70 rule came largely from groups that oppose media consolidation, led by Consumers Union (CU), according to Craig Aaron, communications director for Free Press, a media reform advocacy group that aided the effort to push the FCC to support cable regulation.

Those who oppose tighter regulations and the possible move toward a la carte pricing - which Martin supports in part to allow subscribers to avoid violent or sexual programming - are concerned that it would lead to lower ratings and less advertising dollars for certain channels, possibly putting them out of business.

But CU strategic resource director Bob Williams, who leads, a CU Web site that advocates for consumers on media issues, said industry regulation would enhance competition and ultimately help consumers.

Williams said people were disappointed in the postponement.

"These things happen in Washington," he said, adding that the issue isn't over. "It's probably healthy to get some solid numbers that everybody can agree on."

Sena Fitzmaurice, senior director of corporate communications and government affairs for Comcast, which has a major stake in the issue, referred questions to the National Cable & Telecommunications Association (NCTA), the industry trade group that coordinated the opposition work.

The NCTA did not return calls seeking comment, but NCTA CEO Kyle McSlarrow, in a statement, said that the FCC's decision to postpone the issue "sends an important message that consumers are best served by marketplace forces, not government micromanagement."

For now, CU will be "monitoring the issue very closely" as the FCC waits for a new round of cable industry measurement figures, Williams said. When the issue goes before the commission again, the campaigning process on both sides will likely repeat itself, he noted.

But whether the matter will be brought up again remains to be seen. FCC Commissioner Robert McDowell said in an interview with Reuters that he did not expect a review of 70-70 statistics to show that the threshold had actually been reached. A FCC spokeswoman declined to comment on a "pending matter."

In the long run, the current fight over cable regulation may be moot, according to Rich Tehrani, president of TMC, a publisher of telecom trade magazines. Tehrani said Internet-based content
delivery could ultimately usurp the cable industry's distribution.

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