Martin's Math: Cable's 'Just Over' 70% Penetration

FCC chmn Kevin Martin said Tues that the Commission’s annual video competition report determines that cable has "just over 70%" penetration in cable homes passed. That’s significant because the chmn is reportedly planning to use the so-called 70/70 test to re-regulate the cable industry (the FCC can promulgate additional rules to "provide diversity of information sources" when cable’s available to 70% of homes and has penetration in 70% of those homes). While there’s no question cable’s available to more than 70% of homes, there’s a lot of doubt surrounding whether 70% of those homes actually have cable. That determination is "based upon one of the outside resources and data services that the Commission relies on, not just our finding," Martin told reporters on a conference call Tues. He didn’t identify the outside source. NCTA told the FCC in a letter Tues that virtually all the available data confirm that cable penetration remains below the 70% mark. In last year’s video competition report, Nielsen pegged cable penetration at 61.1%, SNL Kagan put it at 58.1%, and Warren Comm at 67.8% (a figure that NCTA says is overstated because Warren understated the number of homes passed at 93mln; Warren told Cfax its numbers are based on the figures cable systems give it—if a system fails to provide numbers, then it doesn’t have those). NCTA pointed out that last year’s FCC video competition report was based on the FCC’s cable price survey data that found cable was at 56% market penetration. "The only change since [that] report is that the cable industry has actually lost a small number of basic video subscribers," pres/CEO Kyle McSlarrow wrote, noting that through Sept 30, 7 of the top 10 ops lost nearly 200K subs Y-over-Y while DBS gained 1.8mln. The letter was full of jabs, including a remark about "the dubious practice of policymaking by press leaks of supposedly confidential FCC documents" (see Sat’ NY Times story) and a quip about "manipulating data." Even if cable was to reach the 70/70 test, McSlarrow said the FCC’s rulemaking authority would only relate to leased access—not cable ownership, program access, a la carte, or any other area Martin has reportedly targeted. Martin told reporters Tues that the video competition report only makes a finding that the 70/70 test has been met and that he hasn’t proposed anything on a la carte. "I have and continue to encourage the cable industry to offer a la carte voluntarily," he said, adding that he also has encouraged Congress to give consumers more choice in the light of rising cable rates.