Lobbyists 1, Kevin Martin 0: FCC Compromises On New Proposal

FCC Chairman Kevin Martin thought he had the support of the two Democratic commissioners when he went forward with a proposal to invoke powers given to the FCC in the 1984 Cable Communications Act. The 70/70 rule, as it’s called, allows the FCC to adopt any rules necessary to promote a “diversity of information sources,” once 70% of households can receive cable and 70% of them subscribe.

Martin says he has data that proves the cable industry has reached 70/70. The cable industry says Martin’s data is wrong.

It’s too bad for Martin that the lobbyists got to the commissioners before it was time to vote.

From the New York Times:

Mr. Martin had thought earlier this month that he had the support of two of the agency’s Democrats for his original proposals, which would have given him a majority of the five-member agency. The commission’s two Republicans had in varying degrees publicly questioned some of the proposals.

But after the recent lobbying barrage, Mr. Adelstein, who is up for renomination soon, began to express reservations about the proposals.

Republicans in the House and Senate sent letters to Mr. Martin echoing the industry’s concerns, as did senior cable television and network executives.

Now would be a good time to contact your representatives in the House and Senate and thank them for pressuring the FCC on your behalf. Because of their swift action, the FCC was unable to put a cap on the growth of Comcast, our nation’s largest cable company, and could not adopt rules aimed at lowering prices for consumers, such as the al la carte cable that Martin is so fond of.

Under the compromise, cable companies will have two months to submit the numbers of customers and size of their markets, which the agency could use next year to determine whether the industry had reached the threshold for more regulation.

Cable Industry Wins Compromise on F.C.C. Plans [NYT](Thanks, Gil!)

Comments

Edit Your Comment

  1. God damn monopolistic bastards.

    Thank god we don’t have a laissez-faire economy but given all the lobbying that occurs and given the point that the FTC and FCC pretty much seems to not be able to muster up the testicular fortitude to push forth any rulings onto these damn de facto monopolies, we might as well have one.

  2. P.S. Where’s my nation-wide Fiber that $200,000,000,000 of Tax dollars was given to telco’s for?

  3. Shadowman615 says:

    Here’s an interesting article — the authors explains why he thinks a la carte cable would not work.

    [www.nytimes.com]

  4. RBecho says:

    This seems like some lobbying effort yes. But at least they passed a motion to determine the numbers and then act. True lobbyists would have made them just ignore the count all together.

    While I don’t call this a win for the lobbyists, it certainly buys them time. And this isn’t a loss for the public, as something might get done soon.

  5. gorckat says:

    I actually heard some interesting stuff last night about how FiOS and satellite would (have?) actually keep cable form hitting the 70/70 threshold.

    The same report said the data used to show the 70/70 was said to be inexact by the publisher of it (not the cable companies, iirc). Apparently the 70/70 is inferred/deduced, not shown explicilty, from the data.

  6. JustAGuy2 says:

    Martin’s got it in for the cable industry, and it’s all about a la carte, and it’s all about “decency” – the consumer issues are just a veneer.

    In this case, the data clearly don’t support what he was trying to do (the 70/70 test isn’t close to being met, as the FCC’s own data shows), and even people otherwise not inclined to back the cable industry were saying this is ridiculous.

  7. bonzombiekitty says:

    @Shadowman615: I agree with his assessment. A la carte cable sounds nice in theory, but it won’t work in practice. The good thing about having a package like those that are available on cable is that it allows channels that serve more niche markets to survive and giving more diversity on the system. Put in a la carte, and you lose a lot of variety – some good, some bad, and end up with mindless drivel that’s already on present on most of the network programming.

  8. savvy999 says:

    My guess is that in the near future a blended a la carte and bundled system will eventually take hold. The bundles will be much smaller and more focused, so that all sides sort of get what they want. Rather than picking individual channels, consumers will pick a News bundle, a Lifestyle bundle, a Shopping bundle, a Family bundle, a Sports Bundle, a Gospel bundle, Comedy, etc. I could even imagine sub-tiers within these groupings (e.g, “Premium Sports Bundle” that would be ESPNs + NFL).

    That way the ‘decency’ crowd could opt out of the Lifestyle bundle and not expose their kids to the whatnots, while the heathens can Bravo it up all night long.

    Prices would probably still go up though. They would make the smaller bundles so attractive that you couldn’t help but order almost all of them. Seed each one with a juicy must-have, like the Comedy Channel mixed in with garbage serial syndicators like TBS or TVLand.

  9. SportsCentre says:

    A la carte cable works fine in Quebec. Videotron charges $14 for its basic channels, and then you can pick any 15 channels you like for an additional $19/month. Or you can grab 30 channels for $30.

  10. Optimus says:

    I must admit to some confusion on how forcing the introduction of free market price modification factors constitutes increased government regulation.

    When a government forces companies to submit to the consumer based free market, how is that a negative? Are the people “too stupid” to know how to spend their money? Is that what people who oppose “a la carte” think?

    As far as “decency” goes, most carriers can easily block individual channels byt request now days, so that’s not a fair argument.

  11. lostalaska says:

    All I know is I have 130 some odd channels on my cable TV I watch only about 10 of those channels on a regular basis. Including the rare or occasional channels I’m still clocking in at well under 20 channels. Then of course I’m paying over $100 a month for cable TV. If I had an option for DSL from a decent competitor I’d probably take it, and drop the cable completely.

  12. Saboth says:

    @bonzombiekitty:

    Fine..keep the packages, but add more of them. Why is there basic and expanded basic? How about “Sci Fi” bundle or “Cartoon bundle”, etc…like Satellite companies do. Obviously they aren’t hurting for money. I’d simply like to remove all religious, sports, and shopping channels from my lineup. I will happily pay for everything left. You can’t tell me they can’t do that.

  13. TechnoDestructo says:

    @lostalaska:

    How’s your ping?

    I remember playing Team Fortress Classic with at best 200-300ms pings (so I got pretty good at Engineer) when I was in AK, with the exception of ONE Alaskan server. There were others that may have been across town, too, but since the signal had to go to probably Seattle and then come back those weren’t any better.

  14. Yogambo says:

    There is conflicting information on all of this:

    Martin has been saying that the 70% threshhold was met. But when two of the five commissioners — Robert McDowell (R) and Johanthan Adelstein (D) asked to see the information they faced big delays that led to a major fight yesterday. When they got data from Martin’s office, it showed that only 54 percent of US households subscribe to large packages.

    This is what is being reported in the WaPo Business section.

    I’m not a fan of cable monopolies; change is way overdue. But this information is confusing at best and at worst suggests that something shady was going on.

    Adelstein, who’d sided with Martin said he thought that the commissioner (Martin) was going against his own team, “That’s why the data was supressed — because it conflicted with the outcome he sought.”

    I don’t know but when the improvements that are so needed are being gotten through manipulation it really begs for further investigation into just what is going on with the FCC and with Martin. Why would so many outlets indicate that that 70 threshold is met, when the FCC’s own data shows quite the opposite? Leaks…from the FCC… that aren’t true?

    It’s really a frustrating turn of events.

  15. Yogambo says:

    FWIW what was agreed to was that the cable industry is now required — for the first time — to give the FCC its most complete data available on their number of subscribers.

    It seems to me that Martin believes the 70% threshold was met, but he was unable to prove it based upon the numbers the FCC had either generated on its own or were given by the cable companies. Bottom line, it appears he couldn’t pull the numbers, so an agreement was made that the cable companies must supply full data on subscribers so when it is met, he can hit ‘em with it.

    That, of course, makes one wonder if those figures will ever reach that magic 70%.

  16. savvy999 says:

    Question for the masses: does “cable company” = copper + satellite + FIOS + IPTV?

    Seems to me you’re either getting your TV from rabbit ears, or you’re not.

  17. JustAGuy2 says:

    @savvy999:

    Nope, in this case it just means cable companies (i.e. Comcast, Time Warner Cable, Cablevision, Cox, etc.).

  18. goller321 says:

    @Saboth: I don’t know which sat company you are with, but DirecTv doesn’t give pseudo-ala carte service. There are different levels, but the reality is that you get stuck with a ton of garbage on any level.

  19. goller321 says:

    BTW- time for Jonathan S. Adelstein to go…. pro-consumer my ass.

  20. synergy says:

    I know lots of people from other countries who do a la carte cable. They hate the U.S. market and having to pay a shopping cart of money for a bunch of channels they’ll never watch. I’m with them.