Bill Manzi.com

In a somewhat suprising move the FCC has moved to re-regulate some aspects of the cable business, with the Republican Chairman leading the charge. The new proposals, put forward under the so called 70/70 rule promulgated in the 1984 Cable Communications Act, allows actions to promote “diversity of information sources”. From the New York Times.

Under that provision, the agency may adopt rules necessary to promote “diversity of information sources” once the commission concludes that cable television is available to at least 70 percent of American households, and at least 70 percent of those households actually subscribe to a cable service.

With a Republican Chairman who has generally followed a deregulation regimen this move certainly cuts against the grain. The Times reports:

“The finding will provide the commission with additional authority to assure that there is opportunity for additional voices,” Mr. Martin said Friday in an interview. “It is important that we continue to do all we can to make sure that consumers have more opportunities in terms of their programming and that people who have access to the platform assure there are diverse voices.”

The commission’s conclusion that the cable industry has grown too large will be used to justify a raft of new cable television rules and proposals. They include a cap that would prevent the nation’s largest cable company, Comcast Corporation, from growing, and would prevent other large cable companies, like Time Warner, from making any new large cable acquisitions.

Besides invoking prohibitions on growth by the major cable companies the FCC is contemplating some programming regulation changes that would help level the playing field for some smaller competitors.

The commission is preparing to take steps to make it less expensive for rivals of the largest cable conglomerates to buy their programs — so that, for instance, a satellite company would find it less expensive to buy programs by the Turner Broadcasting System, a unit of Time Warner.

One of the proposals under consideration by the commission would force the largest cable networks to be offered to the rivals of the big cable companies on an individual, rather than packaged, basis. That proposal, known as “wholesale à la carte,” is vigorously opposed by the large cable companies.

The agency is also preparing to adopt a rule this month that would make it easier for independent programmers, which are often small operations, to lease access to cable channels.

Wow! As you might expect Comcast and the other majors will fight this strongly.

Officials and lobbyists from the cable industry criticized the finding, saying that independent studies and the commission’s own analysis from last year have concluded that cable television, while available to far more than 70 percent of American households, is actually used by far less than 70 percent of those households. They also suggested that Mr. Martin had an overly expansive view of the rule, and that it could only be used in limited circumstances.

“Every independent analysis of the marketplace shows that cable serves less than 70 percent of the nation’s households,” said Kyle McSlarrow, the president and chief executive of the National Cable and Telecommunications Association, the industry’s main trade group. “And even the F.C.C. staff concluded last year that cable was well short of this threshold.

Consumer groups reacted favorably.

The 70/70 finding is enormous,” said Andrew Jay Schwartzman, president of the Media Access Project, an advocacy organization devoted to diversity of voices and ownership that has opposed consolidation in the media. “It gives the commission a blank check to regulate an industry that Congress had largely deregulated.” Fearing new regulation, the cable industry has lobbied the commission for years to challenge the method used to count the market.

While Cable companies are facing new competition there is no question that their market dominance has led to rate increases that exceed inflation, and in many cases poor service. The programming changes contemplated are, from my vantage point, a good thing and will benefit consumers and provide additional choice. Good job, Republican Chairman Kevin Martin.

Read the New York Times story at this link.