Like Rasputin stumbling forward from yet another assassination attempt, FCC Chairman Kevin Martin is going after the cable industry again. One day following his humiliating defeat on a slate of cable regulatory proposals, Martin floated a new anti-cable item that he wants the Commission to vote on -- capping cable ownership at 30%.
This go-around Martin seemingly has the support of two of his fellow commissioners and he might just pull this one off. But the question must be raised: why? What is it about cable that has Martin so obsessed?
As Jim Gattuso and Adam Thierer document, since Martin assumed the Chairmanship, he has, among other initiatives:
1. Relentlessly and in varied ways sought to force cable operators to sell their channels on an a la carte basis.
2. Pursued must-carry rules that would force cable distributors to carry every digital broadcast signal from every broadcaster carried.
3. Implemented with little room for maneuvering a set-top box integration ban that forces cable companies to remove their security technology from set-top boxes.
4. Proposed a rule that would ban exclusive service contracts between apartment owners and cable television providers.
All of the above is on top of his recently aborted efforts surrounding the 70/70 rule, efforts that would have spawned a whole retinue of nightmarish regulations. And Martin was successful in moving a plan that would slash the costs operators charge for leased access.
Yes, yes, yes. The cable industry is not a model of free market competition. A lot of people hate their cable operators. Rates do keep rising. And the industry is consolidating.
But all those things are true of the phone industry too. Yet Martin seems to not only ignore the telephone industry's problems, but he actively favors telcos. If he's so worried about ownership concentration in the communications world, he ought to take a look at the incumbent phone business where, at most, three companies survive (but I'm not saying he should impose caps on telcos...far from it).
I don't think, as some people say, that Martin is in the hip pocket of the telcos, which are nonetheless glad to see him pursue his weird obsession. A lot of Martin's proposals would also rebound to the detriment of those telcos who are pursuing their own cable-like video businesses.
Adding a layer of confusion to Martin's baffling motives is the fact that many of his ideas, such as the 30% cap, face uphill battles, if not at the FCC itself, then in the courts. A federal appeals court in 2001 struck down a comparable set of ownership caps as unconstitutional and I don't see how anything has changed that would make a new set of ownership caps any more sustainable.
And what would a 30% ownership cap do? It certainly wouldn't lower cable rates, a goal that Martin has said he is pursuing.
At the end of the day, it's still a mystery why Martin is so laser-like focused on cable. Was he psychologically traumatized as a child by something cable-related? Did a cable installer drill through his cat (which actually did happen once to somebody)? I float these less-than-rational motives because his cable agenda seems to be logically inconsistent with his supposed free-market Republican philosophy and his actions when it comes to other industries.
And it's not like he hasn't got a lot of other issues to deal with, such as the impending national digital TV transition. As Ted Hearn at Multichannel News notes, this move to impose a new ownership cap on cable "could strike some as a misuse of agency resources, especially when FCC officials can block any large cable transaction without a 30% rule on the books."
That's right. Martin doesn't even need an official rule to block further cable consolidation. The FCC has the ability to block any communications mergers with no rule in place at all, just as it did when DirecTV and EchoStar sought to merge.
The fact that he doesn't even need an ownership cap to achieve his objectives highlights just how freaking weird Martin's war on cable is. What Martin doesn't seem to realize is that his tactics are backfiring, at least to a limited extent. He's starting to look a little crazy and cable emerged from the most recent battle looking like a truly clever adversary.
Cynthia Brumfield at 1:44 PM|Comments(2)
I sent this over to DSL Reports as well, but I thought you would also get a kick out of it. It's a video posted on Zats Not Funny of Commissioner Adelstein laying into Martin for "cooking the books" in regards to cable data. The rest of the post on Zats Not Funny is great as well. Thought you would like it.
Link to Zats Not Funny:
http://www.zatznotfunny.com/2007-11/fccs-martin-forced-to-back-down-from-regulatory-ambitions/
Link To Adelstein Video:
http://www.youtube.com/watch?v=Q89oFv502jc
Posted by: Bwinston1 at November 29, 2007 5:42 PM
A lot of the examples that you cite may be anti-cable, but they are pro-consumer and that's something that I think Martin is doing right.
It would be one thing if he was meddling in a free market system, but because cable companies have localized monopolies, it's important to have someone looking out for consumer interests.
In looking at all four of the issues that you bring up, I see a theme of trying to return power back to the ends user.
While heavy TV watchers wouldn't save money by going a la carte, there are a lot of people who would save by having this as an option. Shouldn't consumers be allowed to have a choice for how they pay for TV?
The must carry rules may be anti-cable, but they would make sure that consumers can get inexpensive access to the channels that they are interested in. I'd like to get the NFL network with Comcast right now, but they won't let me unless I agree to upgrade to their digital package. The upgrade would mean an extra $28 per month in my case, which ends up adding up to real money when you look at it over the course of a year or two. Shouldn't I be able to only pay for the NFL channel, instead of being forced into their pricing tiers?
As far as the set top box implementation goes, it's hard for me to understand how you blame Martin for this one. The ban was voted into law 12 years ago, but the cable industry pretty much ignored it. Even after being on the market for several years, the cable DVRs are still pure junk largely because they haven't been forced to compete against innovators. Outside of TiVo and few overpriced media centers, there aren't a lot of HDTV stand alone boxes because they've made it so expensive to get the certification. Why should the cable companies get a free pass, when so many smaller companies are still struggling to get their cablecard boxes approved?
When it comes to the exclusive apartment lockups, I don't see how you can even defend these. Once the telephone companies were able to get statewide franchise rights, cable moved aggressive to lock renters into this. Should renters not have access to new choices just because a landlord worked out a sweetheart deal with their cable company? I don't think they should. I've moved twice because I haven't been able to get advanced cable functions (first time HDTV, second time because I could only get satellite), both times its been a huge hassle and has cost me a lot of money, in order to get access to the best technology that is out there. Why should I have to uproot myself, just because I want to choose which company I get my telecommunication services from.
While I do agree that he should be consistent in how he treats cable and the telephone companies, I also think that cable has been able to run wild and it's appropriate for him to be taking such anti-cable steps. I'll admit that I don't understand his 30% proposal, but I also don't think that its fair to criticize him for encouraging competition in the cable market.
Posted by: Davis Freeberg at November 29, 2007 3:42 PM
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