FCC retreats on cable regulation plan

ByABC News
November 28, 2007, 2:05 AM

— -- In a blow to the head of the Federal Communications Commission, the agency late Tuesday withdrew a controversial proposal that could have led to sweeping regulation of the cable industry because of opposition from a majority of commissioners.

The dispute forced a 12-hour postponement of Tuesday's meeting until evening. When the five commissioners met, several accused FCC Chairman Kevin Martin of concealing vital data in an effort to pave the way for tougher oversight of the cable companies.

Martin had wanted the commission to approve a video competition report showing that cable companies have grown too dominant. Under a 1984 federal law, if cable service is available to 70% of U.S. households and if 70% of them subscribe, the FCC may impose rules to promote diverse programming.

While the first threshold of the "70/70 rule" was met years ago, subscribership has hovered around 60%. But this year, a Warren Communications survey said 71.4% of households with cable access subscribe.

The finding could have lent a stronger legal basis to attempts Martin has made to more strictly regulate the cable industry. For instance, he has urged cable companies to offer channels to subscribers individually or a la carte.

The cable industry vigorously disputed Warren's finding, noting it has steadily lost subscribers to satellite and that other studies have concluded subscribership falls far short of the 70% mark.

Three of the FCC's five commissioners also questioned the validity of the Warren study. So instead, the FCC Tuesday ordered cable companies to submit their own data on cable subscribership. That data is not expected to show that the 70% threshold has been met.

Commissioner Jonathan Adelstein accused Martin of hiding until Monday 2006 FCC data showing only 54% of homes passed by cable actually subscribe. The video report "cherry-picked the only data to justify the outcome desired," he said, to "cook the books."

Martin denied that, saying the FCC study wasn't provided earlier because commissioners hadn't requested it. He said Warren provided the most reliable information because it surveyed more cable companies. In an interview, he said he doesn't want to force a la carte pricing on cable companies.