FCC Cable Requirement Gets Mixed Reaction

The cable industry is expressing mixed opinions on the FCC’s new requirement that operators submit market share data to the agency within 60 days. If they don’t, they will face perjury charges.

The National Cable & Telecommunications Association (NCTA), which represents large companies, says it welcomes the chance to provide reports; those members provide the information annually anyway. The American Cable Association (ACA), however, calls the mandate burdensome because it will hurt its smaller providers’ budgets.

The reaction comes in response to a decision handed down from the FCC after its long-delayed monthly meeting ended around midnight on Nov. 27. The data collection notice was issued after Chairman Kevin Martin had to back down from trying to enforce an arcane clause in the 1984 Cable Act. Martin wanted to use data from a single source to support his view that, under the 70/70 rule, a subscriber threshold has been met that would give the FCC the power to regulate paid video providers. Instead, he had to settle for gathering numbers directly from cable companies because he couldn’t secure enough commissioner votes to support his effort.

For cable associations, submitting information was more palatable than the alternative.

“[A]ccurate data is critical to objective policymaking,” said Kyle McSlarrow, president of the NCTA.

Still, McSlarrow would prefer to see Martin drop the matter entirely.

“The commission’s time and energy would be better spent on helping the country get ready for the digital transition or on working cooperatively with industries like ours to further the rollout of broadband to all Americans,” he said.

Matt Polka, president and CEO of the ACA, protested the FCC’s requirement altogether. He said the agency doesn’t understand the magnitude or economic impact of its requirement on small operators. That’s because the new reporting obligations now apply to cable systems with fewer than 20,000 subscribers. Operators with 20,000 or more customers already have to send market share data to the FCC.

“If the ACA had the opportunity to weigh in on this matter, we would have pointed out that the FCC’s actions now force hundreds of small cable operators to provide data on thousands of small cable systems with the majority of these systems serving only a few hundred subscribers,” he said. “We would have also told the commission that many small cable operators do not retain subscriber information from years past, and, therefore, providing 2006 information would be difficult or impossible.”

Democratic Commissioner Michael Copps disagreed. In fact, he was the one commissioner to side with Martin. New evidence, he said, “indicates that the cable industry may very well have met the 70/70 threshold established by Congress. In light of these facts, I think that the most responsible course of action at this point is for the commission to act swiftly to compel the industry to open up its books to put this question to rest once and for all.”

Copps cautioned, however, that the 60-day submission deadline doesn’t mean the commission will have an equally swift turnaround time. He wanted the FCC to commit to reaching a 70/70 determination within 45 days of receiving the industry’s data, but that looks unlikely.

Indeed, a number of industry analysts this week speculated that Martin’s cable agenda is dead; Republication Commissioner Robert McDowell underscored on Nov. 28 when he told Reuters he thinks there’s only a “slim” chance the FCC will revive the 70/70 debate.

The so-called 70/70 rule states that if 70 percent of households in the United States have access to a cable provider offering 36 or more channels, and if 70 percent of that population in turn subscribes to cable, then the FCC would have the authority to ensure sufficient diversity on television.

The call for market share data was part of the FCC’s 13th Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming.

American Cable Association www.aca.org
FCC www.fcc.gov
National Cable & Telecommunications Association www.ncta.com

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