Cable Industry Shocked at FCC Action

Nov 12, 2007  •  Post A Comment

The National Cable & Telecommunications Association is reacting with disbelief to the Federal Communications Commission’s determination that 70% of U.S. households now get cable, a finding that could lead to increased agency scrutiny of the industry.
Even as FCC commissioners begin wrestling with what kind of additional oversight and rules may be imposed on ownership of channels or on programming, the NCTA said the FCC numbers aren’t borne out by any statistics it has seen.
“Every independent analysis of the marketplace shows that cable serves less than 70% of the nation’s households, and even the FCC staff concluded last year that cable was well short of this threshold,” said Kyle McSlarrow, president-CEO of the NCTA.
Mr. McSlarrow has previously accused FCC Chairman Kevin J. Martin of taking an anti-cable tilt, because Mr. Martin has pushed the idea of channel-by-channel pricing for cable service. The industry is resisting such so-called a la carte plans.
“From the point of time we had a fight over a la carte to now, the path chosen is not one that I think reflects the realities of the marketplace,” Mr. McSlarrow said earlier this year. “I don’t think it’s rocket science.”
The FCC’s determination that cable has 70% penetration of the marketplace lets the agency impose regulations that would force cable companies to air channels or shows they don’t own. Whether the FCC will take that step, or exactly what rules will be proffered, remains uncertain.
Under the controlling legislation, the FCC gets additional authority to regulate diversity in cable when 70% of U.S. households can get 36 or more channels from cable and 70% do. The provision is commonly called the 70/70 test.
The law says when cable exceeds that limit, “The commission may promulgate any additional rules necessary to promote diversity of information sources.”
Mr. McSlarrow called the provision “a relic of decades-old regulation” and said there is no justification for “twisting statistics in order to breathe life into this rule.”
He said other studies have suggested the percentage of U.S. viewers getting cable is far less—in the area of 58%.
Mr. McSlarrow also said competition provides the necessary impetus to ensuring program diversity and said competition and new technology already are providing consumers more choices, better programming and exciting new interactive services.
The agency action comes as the FCC readies to announce proposed new media ownership rules that are expected to ease or eliminate limits on newspapers and broadcasters buying each other in a market.
(Editor: Baumann)

One Comment

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