Tales of the Sausage Factory

Cable Ownership Limits: This Is The Jonathan Adelstein I know

OK, first, as our Great Hero and the real Favorite Son of South Carolina, Stephen Colbert would say: Martin as a true set of huevos grande. On Tuesday, when it looked like he was going down in flames, I opined that Martin wouldn’t risk touching cable again with a ten foot pole and wondered whether he would be relegated to the status of a “lame duck” Chairman. Boy was I wrong. Not only did fight his way back from a total loss to a partial win against the massed might of the cable lobby, but he has emerged determined to go on for another round in bringing cable market power to heel, and this time with no distractions about a la carte.

This time, it’s a vote on the proposed cable ownership limit. Under Martin’s proposal, a cable company may control no more than 30% of the total number of cable, satellite, or other “multichannel video programming distributor” (MVPD) subscribers. As usual, we in the media reform/diversity community have been pushing this for years and, as usual, the cable industry insists it is totally unnecessary, ilegal, fattening, and will mean that the terrorsts win.

So I take a moment to appluad Kevin Martin for his continued courage and willingness to do the right thing on cable, even while making a huge mistake on broadcast ownership. But perhaps more importantly, Jonathan Adelstein has jumped on this puppy and run with it. After the bitter disappointment of this past week’s cable vote, it is a much needed shot in the arm to see Adelstein back in his usual form as a defender of diversity and an opponent of market power. Not to take anything away from Michael Copps, mind, who as usual has a track record of opposing consolidation in cable and has worked with Martin on a host of issues limiting cable market power. I’m just saying that seeing Adelstein act decisively on this one restores my faith that while we may have disagreed on 70/70 (and as usual when these things happen, I’m the one whose right), it was an honest disagreement and not something more nefarious. So while I remain disappointed, I am no longer dismaly disillusioned or dismayed.

More below . . . .

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Tales of the Sausage Factory

FCC Spikes Report Undermining Deregulation

Author’s note. I have significantly reedited this story in light of the fact that Michael Powell denies seeing the report or ordering it purged and that the only source on record states only that the order came from “a senior FCC official.” It is entirely possible that Powell never saw the study, and that someone much lower down the chain took action on his or her own. But this is why we need a thorough investigation.

“Unfortunately, many have turned this critically important policy debate into a political one, substituting personal ideology and opinion for the facts. If we are to craft responsible media policy for the 21st century, everyone involved in this debate must set aside the rhetoric, put the public interest before political interest and focus on ‘just the facts.’”

So wrote Michael Powell in an Op Ed in USA Today in January 2003. Powell was talking about the FCC proceeding to review its media ownership rules. He believed the facts would prove that deregulating the mass media would not harm local news. If anything, I expect Powell believed it would improve it. Doesn’t deregulation make everything better?

But according to this story by the Associated Press, The FCC conducted a study on the impact of deregulation of the media on local news, only to suppress it when it proved deregulation significantly hurts local news.

I do not believe Kevin Martin knew this report even existed before Senator Barbra Boxer (D-CA) sprung it on him yesterday. But I do think Martin has an obligation to investigate and make the results of the investigation known. If the FCC did suppress the report, then it needs to take steps to ensure that such things will not happen again. Because, while Powell was wrong about the impact of deregulation, he was right about one thing: “Only the facts will enable us to craft broadcast-ownership restrictions that ensure a diverse and vibrant media marketplace for the 21st century.”

A bit of back story below.

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Tales of the Sausage Factory

The Joker in the Stevens Deck — Section 1004

In the dead of night, just before the latest draft of the Stevens bill came out, a helpful Telco lobbyist inserted a little provision to stack the deck in the case of judicial review. Section 1004 of the Stevens draft now places exclusive jurisdiction for all decisions by the FCC in the D.C. Circuit. This includes not just network neutrality, but media ownership, CALEA, wireless issues, anything.

Why would anyone do that you ask? Because the D.C. Cir. is, without doubt, the most activist court in the land when it comes to pressing its vision of media and telecom policy. More than any other court, the D.C. Cir. can be credited with destroying hope of telecom competition in the United States by perpetually reversing and remanding the FCC’s efforts at rulemaking and enforcement until the FCC finally gave up and effectively deregulated. The D.C. Cir. is also responsible for vacating (eliminating by judicial fiat) the rule preventing cable companies from owning television stations where they have cable systems, and overturning much of the FCC’s cable and broadcast ownership limits. Finally, through the legal doctrine known as “standing”, the D.C. Crcuit has done its best to make it impossible for regular people to challenge FCC decisions or bring individual cases on antitrust grounds.

As a practical matter, the move privileges large companies that can afford to litigate in DC. If you are a small company somewhere else, upset about how FCC action impacts your life, you must now get a lawyer familiar with DC practice ad Petition for review here. Of course, the best (and most expensive) firms most likely have deals with your larger rivals, precluding them from taking the case.

So no wonder why the telco lobbyists want this provision. But why on Earth would anyone else? However, because it comes in at the end, while most of the action takes place elsewhere, it may slip by.

So certainly go to Save the Internet and follow the directions on how to call the Senate Commerce Committee and tell them you want real network neutrality. But don’t forget to tell them at the top of your lungs STRIP OUT SECTION 1004! DO NOT GIVE THE DC CIRCUIT EXCLUSIVE JURISDICTION OVER FCC RULES. You’ll be glad you did.

Stay tuned . . . .

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Tales of the Sausage Factory

Farewell to Abernathy

Last Friday, December 9, marked the departure of Republican Commissioner Kathleen Abernathy. The FCC therefore briefly drops to a 2-1 Democratic majority. But the Senate should confirm Deborah Tate, a Republican Public Utilities Commissioner (and neighbor of Senate Majority Leader Bill Frist) before it adjorns, bringing the FCC back to 2-2.

A few reflections on Abernathy and some thoughts about the likely new Commission below.

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