Debate over 70-70 law calling for diversity, competition

A senior Federal Communications Commission official said Monday that he’s not yet prepared to support agency chairman Kevin J. Martin’s contention that the cable television industry has reached a level of market dominance requiring regulatory intervention.

FCC commissioner Robert McDowell told a Media Institute luncheon that more information and data are needed before he can say he will support Martin, a fellow Republican.

McDowell and commissioner Deborah Taylor Tate requested more information and data last week. He said they both plan to review the additional facts before making any decision. He said that absent that information, he could not support Martin.

Two weeks ago, Martin said new data from Warren Communications showed that cable had reached the so-called 70-70 point. A 1984 federal law holds that if 70% of American homes can get cable TV systems with 36 channels or more, and 70% of those homes actually do subscribe to such a system, the FCC can take action to ensure “diversity and competition.”

But in his luncheon remarks, McDowell noted that just last year the FCC said cable penetration had reached only 60%. Also, cablers have lost market share in the past year as satcasters EchoStar and DirecTV have increased theirs, McDowell noted.

“Now, the FCC is ready to throw all this out in favor of the Warren data,” McDowell said. Warren, on learning that Martin was relying on its new data regarding 70-70, issued a statement saying its data was not reliable for such a conclusion.

“Why is the FCC suddenly changing its evidentiary standard and methodology just for this one industry?” McDowell said. “How will this abrupt and radical departure affect other analyses and proceedings? Doesn’t this shift weaken arguments for updating the cross-ownership ban? Does our proposed change affect our analysis of the proposed XM-Sirius merger? How do we reconcile decades of data showing more convergence and more competition among more delivery platforms with this sudden reversal? I am searching for credible answers to these and many other questions — thus far to no avail.”

However, McDowell endorsed Martin’s plan to have a commission vote on media-ownership revisions before the year ends. Activist groups and some members of Congress have criticized Martin for moving too quickly on the issue, but McDowell said wryly that the agency “is rushing toward a decision on media ownership the way a slug races across a garden.”

He noted that the review process has been going on for more than four years, during which time the commission has reviewed upward of 130,000 public comments and the testimony of 115 experts on media ownership who appeared before more than a half-dozen public hearings on the subject.

Martin has said he wants to relax the newspaper-broadcast cross-ownership ban to allow a media company to own both a paper and a broadcast outlet in the same market if the market is among the top 20 in the country and the broadcast outlet is not among the top four in the market.

While supporting the effort to ease the 32-year-old ban, McDowell said he is making no decision on Martin’s proposal until he gets more specifics. Martin has not yet officially proposed a detailed rule that would relax the ban, but he is expected to do so soon.

In a related development, the Rev. Jesse Jackson issued a statement denouncing Martin’s plan to invoke the 70-70 rule, which dates back to the mid 1980s.

“It is deeply disturbing to learn from the news media that the FCC is considering using an antiquated legal rule to advance what is widely seen by civil rights leaders as an anti-diversity agenda,” Jackson said. “Rather than work through the democratic process in Congress, a bureaucratic agency should not be using a 20-year-old legal clause to implement wholesale policy changes that hurt consumers and hurt minority television programmers.”

Follow @Variety on Twitter for breaking news, reviews and more