WASHINGTON, DC — Federal Communications Commission Chairman Kevin Martin’s desire to bring the cable television industry to heel was stymied late Tuesday by fellow commissioners who refused to buy statistics the chairman was trying to sell.One goal of Tuesday’s meeting was to finalize the commission’s annual report to Congress about the state of competition within the cable-TV industry. As originally drafted, the report quoted a single study that placed cable’s penetration in 2006 at 71.4-percent of the market. The figure, propounded by Martin, proved to be problematic for the majority of commissioners, not only because the cable industry disputes it, but also because congresscritters on both sides of the aisle have discouraged the agency from imposing additional rules on the medium.
If the 71.4-percent figure — submitted by trade publisher Warren Communication News, which urged the FCC not to rely on its data — were true, it would invoke a little-known-outside-the-beltway clause in U.S. law that allows the FCC to impose upon the cable industry “any additional rules necessary to promote diversity of information sources.” That would have provided Martin the opening he has sought since his appointment in 2005: The ability to define additional regulations that would further his dual agendas of curbing indecency and forcing the cable industry to adopt a-la-carte pricing.
Ultimately, the commission declined to ensconce as fact the Warren figure, deciding instead to broaden its data horizons by commanding every U.S. cable operator to submit, within 60 days, records documenting its 2006 subscriber base vis-à-vis the total number of households in the markets it serves.
Even after Tuesday’s reportedly contentious meeting, Martin and one other commissioner — Democrat Michael Copps — continued to defend the Warren benchmark figure as coming from the only source that tracks subscribership to cable systems with 36 or more channels, as the law requires. In subsequent prepared statements, both Copps and Martin indicated they believe the cable operators’ forthcoming statistics will confirm Warren’s 71.4-percent figure.
The remaining three commissioners, however, said they were disturbed by a sharply contradictory report distributed by FCC staff only hours before Tuesday’s meeting. That report — based on a survey conducted by the FCC itself — set cable’s 2006 penetration at only 54 percent, well below the 70-percent threshold necessary to trigger the so-called “70/70” clause’s empowerment of FCC regulations promulgation.
According to MarketWatch, a service of Dow Jones, most independent-research reports and Wall Street studies peg cable’s portion of the pay-television market at around 60-percent. The Leichtman Group, an independent firm that researches the TV and high-speed Internet markets, also estimates cable controls 60-percent of the market, with satellite corralling 25-percent and about 15-percent of households subscribing to neither service. What’s more, pundits say cable’s penetration actually may be falling due to stiffer competition from satellite services and the Web. During the third quarter of 2007, for example, cable leader Comcast Corp. dropped about 65,000 basic-cable subscribers, and No. 2 Time Warner lost about 83,000.
