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FCC meeting delayed; Opposition to 70/70 plan mounts

Tue, 11/27/2007 - 7:10am
Brian Santo

FCC Chairman Kevin Martin delayed today’s meeting of the Commission, apparently in response to rapidly escalating opposition to his plan to secure greater regulatory authority over the cable industry. Adding their voices against the plan were several analysts, who are also questioning Martin’s math, and perhaps most significantly the chairman of the House Judiciary Committee, Rep. John Conyers, who is questioning the legality of Martin’s methods.

Martin wants to gain greater regulatory control of cable so that he can accomplish the goal of reining in escalating cable rates. Few oppose the aim, but many have been questioning his means – invoking the so-called 70/70 rule in the 1984 Cable Act, which gives the FCC greater regulatory control over cable should cable become available to 70 percent of all U.S. households (done) and subscribed to by 70 percent of those households.

Most believe that the cable industry’s penetration is closer to 60 percent, and with competition from DBS vendors and now from the telcos, cable’s penetration rate is almost certainly diminishing.

Brian Coyne, an analyst with FBR, said in a research note that for starters, Martin is actually including Verizon FiOS TV and AT&T U-verse video customers in his estimation of cable penetration, which Coyne said makes no sense. He then goes on to present evidence and analysis that cable is nowhere near 70 percent penetration.

Bruce Leichtman of The Leichtman Group was less diplomatic in comments reported by MarketWatch: "It's not even an argument here. That's what is so appalling about this."

But while opposition from the cable industry, many programmers, minority groups, free-marketers, a group of House Republicans, and the FCC’s two other Rebublican commissioners would probably be enough to stymie Martin’s plan, the prospect of scrutiny from the House Judiciary Committee would be especially dampening.

In a letter dated November 21, Conyers repeatedly said he was “concerned” and “troubled” that Martin may have skirted and/or violated several public notice procedures. Piling on, Conyers said he is “very troubled by the rulemaking process on media ownership.”

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