After a confusing and messy twelve-hour delay, the FCC meeting finally got off the ground yesterday after 9 p.m. with FCC Chairman Kevin Martin securing a couple of minor victories in his battle to crack down on the cable industry. First, the FCC voted out a new rule that would, in effect, slash the prices that cable operators charge to third party programmers seeking to lease capacity on systems.
Secondly, the FCC ordered cable operators to supply within 60 days data needed to determine whether cable penetration has exceeded 70% of homes capable of buying cable service. This new requirement follows weeks of increasing criticism of Martin's sole reliance on a single source of data to conclude that cable does indeed exceed the 70% penetration threshold, thereby invoking obscure statutory authority that would allow the FCC to impose further regulations on the cable industry.
Martin failed to obtain the necessary votes from his fellow commissioners to approve a key report that concludes the 70% threshold has been met precisely because of his reliance on this third-party source, which is widely known to be inaccurate from a statistical perspective. Indeed, the FCC's own data (yup, the FCC already collects this data, but it's going to do it again) show that cable penetration stands at around 54% to 55%.
But, according to his fellow commissioners, Martin withheld the FCC's own data from them until Monday night. In a statement, Democratic commissioner Jonathan Adelstein accused Martin of trying to "hide the ball."
I did not learn until after 7:00 pm last night that the FCC's own 2006 survey found that only 54 percent of homes passed subscribe to cable. Similarly, the FCC's cable price survey came in at 55.2 percent penetration. Based on these newly unearthed facts and the conflicting evidence on the record, I am unable to support a finding that 70 percent of homes passed subscribe to cable at this time. The data is inconclusive. If we were truly searching for the truth, it is inconceivable that our own data would be cast aside without mention.
Republican Commissioner Robert McDowell also chastised Martin for suppressing the data.
Interestingly, this year, in a disturbing development, the FCC's most recent Form 325 data was not made available to commissioners for review until 7:09 p.m. last night. It was only made available once it was obvious that a majority of the Commission would not support the initial draft of this Report because it was such a dramatic departure based on mysterious statistical manipulation. But why was this data omitted or suppressed to begin with? Was it because it concluded cable penetration was only at 54 percent, just like last year?
Martin counters that the FCC's own data is inaccurate and that, moreover, he withheld it from his fellow commissioners because they didn't ask for it.
The generally botched meeting (an additional item on minority media ownership was yanked at the last minute after Martin failed to gain enough votes) is indicative of bad management at the agency, according to a long critique of the agency's process that Adelstein incorporated into his statement. In particular, Adelstein accused Martin of trying to ram things through without sufficient deliberation and notice.
One of the reasons for the embarrassing delay of today's meeting, and the general disarray in working through these issues, was the effort to push through such an aggressive number of controversial items today without sufficient notice to all Commissioners. Short-circuiting Commission procedures short-changes the American public in the end. This is particularly true given that nothing we are considering today requires immediate action. There are numerous items that would have benefited greatly from more deliberation and care.
One victim of the FCC's chaos is the Tribune Company, which is in the midst of a deal that would take the company private in the hands of investor Sam Zell, a deal contingent on gaining waivers of a newspaper-crossownership ban. But Martin has pushed for a broader repeal of the cross-ownership restrictions rather than merely grant the waivers, a push that is now in jeopardy given the mess at the Commission. Adelstein writes:
The agenda that was pushed for today was just a fig leaf, it does not provide real answers to the very real problems that permeate the media landscape. And very troubling is the attempt to punish major American companies in the process of dismantling the newspaper-broadcast cross ownership ban. Tribune, long a respected and influential institution of American journalism, has been used as a human shield to provide cover for broader rule changes, even at risk to the life of the hostage itself.
He also wonders why the cable industry has become such a target for the FCC. "Some may ask whether the entire cable industry is a foil today to show we are tough on some big media companies, even as we are forgiving to others."
Finally, Adelstein frets about the Commission's loss of credibility given the Chairman's strange behavior regarding factual data. "We cannot cook the books to pursue a political agenda without dismantling our very institution. We simply must act like the expert agency Congress intended, and not squander our precious legacy."
Update: Martin is going to take of Tribune, which is in jeopardy of losing its financing if the cross-ownership issue isn't resolved before year-end. He's circulated a proposal to give Tribune a waiver so that it can get its deal done. Commissioner Adelstein and Commissioner Michael Copps said they would approve this proposal within three days.
Cynthia Brumfield at 6:42 AM|Comments(0)
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