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.

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Well, I'll have a lot more to say over the next few days. And there were a bunch of very good Orders that came out on other subjects, like Low Power FM and mandatory disclosure requirements for broadcasters. But here's the summary:

1) The Commission acknowledges that data about the 70/70 threshold remains unclear, and will therefore require that all cable operators must report real subscriber numbers, including all MDU subscribers, for 2006 and 2007.

OK, as regular readers will know by now, I think it was clear that cable penetration passed this threshold long ago. But since we at MAP have been asking the FCC to collect real data on this stuff from the cable operators since 2000, I am pleased with the ultimate outcome. Hell, I was telling Steve Effross of NCTA last night that I'd wait on the result to get real data from all cable operators so that we could do this right.

If I'm wrong on penetration, so be it. This is an empirical question and we should solve it through the obvious expedient of telling cable operators to actually report their subscriber numbers. Three cheers for Kevin Martin for having the courage to stand up to the wholly bought cable subsidiaries in the GOP, and three cheers for Michael Copps for pushing for collecting actual data from cable companies for years now.

As for Jonathan Adelstein. _sigh_ Yes, I'm still disappointed. I get that Adelstein doesn't like being in the hot seat, that he thinks Martin is a — if you'll excuse me — martinet who cooks the books, etc. etc. But he is just plain wrong on this one. As noted with copious citations in the MAP filings (see links in comments in previous post) the FCC has always relied on Warrens data and exclusively on Warrens data, which showed cable penetration hovering at pretty damn close to 70%.

And as for the much vaunted Cable 325 Reports that Adelstein and McDowell went on at great length about, I shall refer interested parties to the GAO's analysis, with the lengthy but descriptive title “Data Gathering Weaknesses in FCC's Survey of Information On Factors Underlying Cable Rate Changes.” And, as also mentioned in MAP filings, the FCC's regulatory fees NPRM determined that cable gained 1.5 million subscribers in 2006. If we're going to include all the FCC data, the fact that everyone (including McDowell and Tate) already voted to find that cable gained 1.5 million subscribers in 2006 should be included in the discussion as well.

But, at the end of the day, Adelstein voted to demand the cable companies provide the data and end this debate once and for all. That counts for a lot. Nevertheless, for me on this, Adelstein comes out of this a lot less like Han Solo and a lot more like Hamlet, spending five acts waffling and causing havoc before finally managing to stab the right villain.

As for Tate and McDowell — hardly a surprise. Given how thoroughly the cable guys appear to own the Republicans, the surprise is not that McDowell and Tate went with the cable boys but that Martin actually went ahead and defied them.

2) Leased Access: The Commission adopts a pretty good Order that will lower the rate, require cable operators to be more responsive, and generally force staff to get complaints processed quickly. Surprisingly, it took some convincing to get Adelstein to go along with this one, as the cable operator's last minute complaint that they didn't get enough due process struck a chord. (I love it that industry always discovers due process when they are about to get their comeuppance, but when it's about shafting us the due process concerns go out the window.) Fortunately, Copps and Martin were able to broker a compromise that the FCC will stay operation of the new rate formula until after they process Petitions for Reconsideration. And surprise! Tate and McDowell dissented. McDowell's comments about how leased access doesn't work as an economic model run afoul of the fact that the record contains several examples of programmers that do make a go of it even under the existing abominable rules (such as CaribeVision). But when your “Mr. DeReg Guy” a little thing like facts will not figure into your theorizing.

A minor tweak. The Commission will not apply the new rate to home shopping channels, but rolled that over into a separate rulemaking. Given my general feeling on home shopping channels and the public interest, I can't complain too loudly about this one. I don't think it's terribly needful, but I can live with it.

3) Section 616 Carriage Complaint: The process for independent programmers to file complaints with the Commission was up for major reform. It didn't happen. Score a kill for the cable guys.

That's the quick and dirty. I'll try to have more over the next couple of days. But first I gotta take a little nap. It's been a Hell of a month.

Stay tuned . . . .

Well, Adelstein wussed out on us on the 70/70 vote. And it appears that he will not even go to bat for the the leased access proceeding that he championed. We may get some reporting requirements for cable. The FCC Meeting is on hold pending the new negotiations.

Disappointed doesn't even begin to cover it.

Stay tuned . . . .

So I spent a good deal of time in Part I explaining why 70/70, leased access, and the rest of it are necessary steps to curb cable market power. You can also see the back and forth between MAP and the cable guys on whether the 70/70 threshold is met (for those of us that actually care about the substance) either by going to the FCC's Electronic Comment search page and pluging in the docket number 06-189. Or you can check out what my friend Greg Rose has written on his blog. Because regardless of what you think the policy is, there is an actual empirical question here that — if we required cable companies to submit real subscriber numbers to the FCC rather than letting them file whatever the heck they want without any kind of verification or standard system of reporting — we would be able to answer.

And, as we head to a vote on Tuesday, Democratic Commissioner Jonathan Adelstein remains the swing vote. As regular readers know, I defended Commissioner Adelstein during the 700 MHz Auction fights when some of my friends in the movement wondered whether Adelstein was taking up the cause of the wireless companies against the consumer. Then, my faith was rewarded when Adelstein came out in favor of wholesale. Even though we ultimately lost that fight, there was no doubt that Jonathon Adelstein was on the side of the people not the special interests.

But now we come to cable. Where Commissioner Copps has always been a clear and unambiguous foe of cable market power, Adelstein has always been more ... nuanced. For example, when Comcast and Time Warner divided up bankrupt Adelphia cable, Copps voted against the merger while Adelstein concurred in part and dissented in part. Adelstein used his concurrence to extract a promise from Chairman Martin to reform the cable leased access process. So was this going along with big cable or shrewd realpolitik? At the time, and still, I argued the later, trusting that Commissioner Adelstein's longstanding support for diversity and strong stand against media consolidation belied the rumors that he was “soft” on cable consolidation.

More troubling was Adelstein's recent concurring statement with Republican Commissioner Robert McDowell on denying Comcast's request for a waiver of the 1996 law requiring cable operators to create an open, standard interface for cable set-top boxes. But OK, Adelstein did vote to deny the waiver and was apparently chiefly honked off that Martin was cutting Verizon a break but not Comcast. While I might disagree (giving Verizon two years to develop compliance for a non-cable system when Comcast and the rest of the cable industry got ten years on the same excuse doesn't seem that outrageous to me — given that there are real honest-to-God technical differences between FIOS and cable systems and CableLabs, which developed the cable card standard, is a cable industry operation), I can at least understand where folks might get peeved at Martin's apparent favoritism between the telcos and the cable cos (more on that in Part III). And, after all, Adelstein did vote to actually enforce the law against the cable industry.

But still the same ugly rumors persist — Adelstein is soft on cable. Adelstein is looking for an excuse to avoid the vote. Adelstein wouldn't vote against cable on Comcast's fight with The America Channel except that Copps voted with Martin and ADelstein didn't want to look bad. etc., etc., etc.

Washington is a cynical town. It's always easier to believe that people are acting because they are owned by this special interest or owe favors to that industry than to believe that people are trying to do their best in a complicated world. I am an oddball in starting from a position that I give those on the same side as me and those on the opposite side the benefit of the doubt until I see something that puts it beyond doubt that a person is favoring a private interest or industry over the public interest no matter what.

So we come down to the wire on cable. I've fought the cable industry on these issues for the last 8 years, and I am a newbie compared to some of the folks in the movement that lived to see the vote on Tuesday. I believe that, as an objective matter, the 70/70 cable penetration benchmark has been met — and was met at least as early as 2005. I continue to believe that cable exercises market power over programming and subscription rates and that the FCC needs to address these problems.

And I believe that Commissioner Adelstein, like Commissioner Copps, cares about diversity of programming and protecting consumers from cable market power. At least, I believe it now. And I hope I'll still believe it after Tuesday.

Stay tuned . . . .

I must applaud the Republican House Commerce Committee members for their willingness to stay bought. Why else would 23 of the 26 Republicans on the House Commerce Committee send this letter celebrating the perfection of the cable industry in the United States and opening a can of whoop-ass on Kevin Martin for daring to suggest otherwise? Because if that letter came in response from hundreds of constituents complaining that their cable service costs too little and the service is too good, I'll eat my lap top.

God knows, with the number of issues on their plate and with their party's standing plummeting in the polls, you'd think Republicans would decline to publicly defend the cable industry. What with rates consistently rising faster than inflation (and despite increasing profits-per-subscriber until the last quarter or so), cable operators have raised rates every year - whether they need to or not. As if that were not enough, the customer service records of the major cable companies are abominable (or why would Mona “The Hammer” Shaw have attained folk-hero status?). So with us heading into an election, and the Republicans weighed down by all the baggage of the Iraq War, corruption scandals, accusations of cronyism and mismanagement, and a general anti-special interest sentiment in the electorate, you wouldn't think the Republican party would rise up en mass to defend the cable industry from one of their own?

And yet that is precisely what 23 Republican members of the House Commerce Committee just did. Upset that Kevin Martin has proposed several items for the next FCC meeting that limit cable market power, the Commerce Committee Republicans have leaped to the defense of the cable industry. “Shame!” They have cried to Kevin Martin. “All is well in cable-land! The industry is intensely competitive, prices are low, service is wonderful, and consumers are bursting with happiness! How can you even think of regulating the cable industry?”

Mind you, these are the same Republicans who in the summer of '06 were so gosh darn concerned about the lack of cable competition that they were all set to completely rewrite the Telecom Act to help phone companies get into video. Because God knows if we didn't deregulate phone companies we couldn't get any competition for cable, and Lord knows we needed competition for cable. But when you are a member of the Republican Party and you see a special interest and regular campaign contributor in need, you don't worry about such fiddlin' details as consistency with your past positions. Either that, or we should assume Mr. Barton, Mr. Upton, and the rest that championed the “we must deregulate the phone companies to bring competition to cable” bill in 2006 believe that the whole competition thing worked itself out, so that is now — in the words of the 23 Commerce Committee Republicans — “significant competition in the video programming marketplace.”

So now we see the delightful sight of Mr. Barton, Mr. Upton, and the rest of the Republican Cable Commerce Cheering Squad, who last summer couldn't vote fast enough to deregulate because we needed cable competition, taking FCC Chairman Martin out to the woodshed for daring, DARING to suggest that cable has market power and that therefore the FCC should take steps to address this problem, or at least bloody recognize the reality. (Apparently, flip-flopping is not a problem if it is bought and paid for flip-flopping.)

So rest assured America, in the fight between your personal well-being and the profit margins of GOP campaign contributors, you can always count on the Republicans to stay bought and stand up for special interests.

Stay tuned . . . .

I wish my employer, Media Access Project, had sufficient funds to hire me a research assistant. But they don't. So I'm going to turn to the collective readership for a bit of fast research to help me refute the pack of lies the cable industry is spreading.

As regular readers know, Martin has proposed a slew of much needed cable reform rules. Chief among these is the finding that cable serves 70% of homes in areas served by cable systems of 36 or more activated channels. NCTA, the cable trade association, has denounced the dea that their members serve that many customers as a vicious lie and generally denounced Martin for carrying on a vendetta against his industry (where “vendetta”="actually enforce existing law and regulate in the public interest“).

Turns out, however, that Martin did not just pull the numbers out of his posterior. They came from the Warren Communications News Television and Cable Factbook, a neutral and respected industry reporter. According to the Warrens data, cable serves over 71.4% of the relevant market — more than enough to trigger the 70/70 threshold and give the FCC authority to reregulate cable to promote diversity.

To my considerable surprise — given how much Warrens depends on their reputation for accuracy to convince customers to pay many thousands of dollars for this research — the cable industry prevailed on the managing editor of The TV and Cable Factbook to declare their own research unreliable. In fairness, they claim the research is unreliable only when used to prove that the cable industry has passed the 70/70 threshold, so I assume all the advertisers and businesses that rely on this data will not be troubled. They also claim tat the data are unreliable due to systemic underreporting by cable which, as my friend and fellow Wetmachine blogger Greg Rose observed, means that the number of households served must be even more than the 71% Warrens initially found.

Such is the power of cable, however, that the industry reporters following this have uncritically lapped up the NCTA party line while failing the elementary school math noted above (ironically, proving the point about how media consolidation is all about serving corporate interests). Martin's fellow Republicans on the Commission, McDowell and Tate, apparently determined to make sure that everyone knows that they would never pursue a ”vendetta“ against an industry merely because it has demonstrated market power, sent this letter to Warrens asking for more information (and apparently missing the elementary school math that if you underreport cable subscribers that means they serve more than the number reported). The letter takes a rather nasty shot at Martin, as well as inviting explanation for why the other reporters come in so much lower and looking for validation of the numbers.

Of course, as Rose pointed out in his post, the other numbers come in lower because they are estimates where the cable operators provided even less info than they did to Warrens. But it occurred to me that there is a rather simple way to make the point that even incumbent cable operators passed the 70% threshold sometime ago.

Back for the 2005 cable report, NCTA submitted numbers ranging from 62% to 68.9%. Since then, with the exception of the most recent cable quarter, the cable operators enjoyed consistent growth in their basic subscriber numbers. I would like to find out the quarterly basic subscriber statistics for the largest cable operators (Comcast, Time Warner, Cablevision, Cox, and Charter). If the largest operators enjoyed significant growth after NCTA condeded 68.9% as a valid measurement, then we can have reasonable assurance that findings above 70% are accurate. Problem is, I'm a little strapped for time here.

So I'm turning to the distributed power of the web for help meet the McDowell/Tate Challenge of ensuring that the data meet the highest standards of ”trustworthiness, truthfulness, and viability" (which, I have to say, has not exactly been the case with Commission cable reports before Martin took over. Either make a donation to MAP to get me a research assistant, or send me an email with useful cable statistics.

Stay tuned . . . .

I gotta hand it to the NCTA – they really know how to spin the press. Given the outrageous excesses of market power displayed by incumbent cable operators, you would imagine that activists would leap at the opportunity offered by Kevin Martin to reign in cable market power – regardless of whether one likes Martin personally or thinks he is a Bellhead or industry tool in other respects. But no, over the weekend, the NCTA has done an exemplary job of spinning the upcoming sledgehammer to cable market power as a bad thing.

I am talking primarily about the news that the FCC may invoke the “70/70" provision of Section 612(g) of the Communications Act (codified at 47 U.S.C. 532(g)). For those not as obsessed with the Communications Act as yr hmbl obdnt, this provision states:

[A]t such time as cable systems with 36 or more activated channels are available to 70 percent of households within the United States and are subscribed to by 70 percent of the households to which such systems are available, the Commission may promulgate any additional rules necessary to provide diversity of information sources. Any rules promulgated by the Commission pursuant to this subsection shall not preempt authority expressly granted to franchising authorities under this subchapter.

Now you would think anyone who opposes media concentration would be jumping for joy here, wouldn’t you? At last, a clear source of authority for the FCC to regulate cable in the name of diversity, and a directive from Congress to do it (without preempting local franchise authorities). And one would certainly expect that the Democratic Commissioners, Copps and Adelstein, who have repeatedly shown themselves stalwart champions of diversity and enemies of consolidation, would rush to seize the moment. But while I hope the later is true, some normally sensible people are buying into the cable spin that this is somehow bad because (choose however many apply):

A) It’s an “archaic leftover” of another time and nowadays cable is “highly competitive.”

B) It’s not really true that the 70/70 test is met anyway so the courts will just reverse it.

C) Kevin Martin is an evil Bellhead who has it in for cable, wants to deregulate broadcast media, and shafted local franchising authorities, so you know this must somehow be evil, even though it is something media reform advocates have fought for over 20 years to achieve.

D) Somehow, this is just an effort to distract us from the fact that Kevin Martin is an evil Bellhead who eats puppies and throws kittens into trees for his amusement.

E) Martin is just slapping the cable guys around because they didn't do family tier.

G) Somehow this helps Kevin Martin deregulate the broadcast industry.

Having spent the last several years trying to get the FCC to recognize the goddamn truth that 70/70 was met years ago, and trying to get the FCC to address leased access and carriage complaint issues, the 30% cable ownership cap, and a bunch of other reforms to address cable market power, I am just a shade peeved to see folks who should know better eating out of NCTA’s hand. Because public policy is not about whether I like or dislike the current FCC Chair or whether I would rather he focus on reigning in telcos rather than cable cos. It’s about what is the best public policy. And what Martin has put out for a vote: 70/70, reform of leased access and the carriage complaint process, and reaffirming the 30% cable ownership cap, are all things justified by the record and urgently needed.

We have already seen that when the Democrats work with Martin to protect independent programmers, good things happen. Holding the cable operators accountable under the set-top box law, letting The America Channel arbitrate its case against Comcast, these are areas where Copps and Adelstein recognized that their interest in promoting diversity and free expression converged with Martin’s interests in restricting cable market power and worked together to create well-crafted rules that promote the public interest without selling anyone out. This is that “bipartisan” thing everyone claims they want – work together where you can, oppose each other when you must, and always keep in mind the public interest rather than your partisan ends.

Below, I run through some background on what’s going on — especially with the 70/70 test. Since that will make this ridiculously long, I will save for Part II why Copps and Adelstein need to seize this opportunity before the NCTA gets a chance to work its mind-clouding magic and once again get a quorum to vote that slavery is freedom and market power is competition. And, since Martin’s motives appear to absolutely rivet everyone’s attention, I will give my best speculative guesses followed by my explanation of why Martin’s motives don’t matter. Because, as in all good politics, Martin has maneuvered it so that he will get his political pay off whether the Democrats vote for the cable items or not. So rather than waste the best chance at cracking cable market power in the last 20 years and give Martin a political victory anyway, the only sensible thing to do is vote for the items and make it clear that doing the right thing in cable over here doesn’t give Martin a pass on previous bad Orders (like preempting local franchise authority) or give a license to deregulate broadcast ownership.

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