Cable networks resist a la carte

NCTA accuses Martin of pushing agenda

The cable television industry’s top lobbyist said the Federal Communications Commission is “broken” and that its chairman, Kevin J. Martin, is “wrongly” trying to pressure cablers into adopting a la carte subscription models.

In a telephone conference with reporters Wednesday, National Cable & Telecommunications Assn. topper Kyle McSlarrow excoriated Martin’s recent announcement of impending new regulations over cable as “crude market intrusions.” He also characterized several of Martin’s recent actions toward the industry as “disturbing” and indicative of a single-minded agenda to force the industry to adopt a la carte because the FCC lacks the authority to impose it.

McSlarrow’s broadside came in the wake of Martin having said last week that the cable TV industry had reached a point of market dominance that triggered federal regulatory action to ensure “diversity and competition.” The point involves the so-called “70-70” rule, which 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.

Likely new regs would focus on capping growth of cable companies and opening up their networks for leased access.

But Martin has also been hammering cablers to offer a la carte since he took over as FCC chairman in March 2005. He says a la carte will result in lower cable rates and allow parents more control over content.

Martin has also twice tried — unsuccessfully — to force cablers to carry all six possible digital channels that a broadcaster will be able to transmit. And Martin recently won a commission vote to force cablers to offer both digital and analog signals in their pipelines to customers for three years after the digital TV transition in 2009.

But McSlarrow said all the other rules or proposals have been “designed to pressure the industry to go with a la carte.”

While McSlarrow refused to say that Martin is abusing his authority, he clearly implied that the nation’s top telecom regulator was at least misusing it. “It’s just wrong,” McSlarrow said. “It’s wrong as policy and as a way to conduct business.”

McSlarrow questioned the data on which Martin is relying to support his contention that cable has reached 70% market penetration. “We haven’t seen the data,” he said. “We have no idea how they arrived at that conclusion. The FCC should publicize the data.”

But even if 70% is accurate, “it doesn’t mean you should engage in massive reregulation of the industry,” particularly when Congress decided to deregulate it a decade ago, McSlarrow added. And cable has lost, not increased, market share so far this year, he said.

McSlarrow said the Martin FCC’s “use of reports to promote a particular agenda is disturbing.” He cited an agency study conducted prior to Martin’s becoming chairman; that report found a la carte to be economically unfeasible. After Martin became chairman, he ordered a review of the study, and the review concluded the exact opposite.

Equally disturbing, McSlarrow said, is “the use of data to support particular findings under dubious circumstances.”

But it all comes down to a la carte, McSlarrow repeated. “There is no question in my mind that (Martin’s) primary agenda is imposing a la carte.”

FCC spokeswoman Mary Diamond responded: “Our focus is not on the welfare of a particular industry but the welfare of consumers and ensuring they receive the benefits of competition in the form of lower prices, more choice and better services. Consumers have not seen those benefits from cable. The average cost of cable has almost doubled from 1995 to 2005 — increasing 93% — while the cost of other communication services fell. The cable industry needs more competition, and we will continue to act to bring more competition and its benefits to consumers.”

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