Revolution Continues: Martin Forced to Back Down (Again)

At press time, there was still no word of a start time for the FCC’s monthly meeting, originally slated to begin at 9:30am. While cable appears safe from the 70/70 rule, it seemed likely the Commission would eventually meet to approve items to slash leased access rates on cable by as much as 75% and implement some form of arbitration for programming disputes. As for the 70/70 rule, FCC chmn Kevin Martin once again had to rip up his plans for ripping into the cable industry. This after failing to muster support in Sept for his dual carriage proposal. We’re not sure how much of the credit for the 70/70 win should go to cable’s lobbying powerhouse or to the chmn himself for continuing to come up with proposals that don’t have backing (how many Republican Congress members sent him diatribes on this issue?). Unable to secure 3 votes for the so-called 70/70 rule, Martin conceded Tues afternoon that his fellow commissioners (3 of ’em anyway) weren’t comfortable with the data being used to justify that cable has surpassed 70% penetration of homes passed. The chmn wasn’t willing to back down completely, suggesting the controversial Warren data used to justify the 70/70 threshold would still appear in the video competition report but that the report would likely also include data reported by the cable industry. There was talk of the Commission voting Tues (assuming they ever met…) to compel the industry to file such data. NCTA said cable already provides those figures every year through the Form 325—the same form the FCC used in last year’s video competition report to determine that cable had 54% penetration. “The Form 325 data is for all cable systems with 20K subscribers or more, which represents over 80% of all. So even if the remaining 20% of small cable systems had 100% penetration, cable would still not reach the 100% threshold,” an NCTA spokesman said. Cable scored another victory early Tues morning when Martin yanked his multicast must-carry plan that would have launched a NPRM on having minorities and others lease broadcasters’ digital spectrum to operate their own stations that in turn, would have cable must carry rights. — The FCC’s leased access proposal seemed the most likely to pass as written. Less clear was what shape the FCC’s final program arbitration order would look like. Oppenheimer sent out a research note predicting that the threat of FCC arbitration has accelerated Hallmark Channel’s distribution renewals with major cable ops. Network head Henry Schleiff said during Crown’s 3Q earnings call that Hallmark is close to finishing renewals with 2 of the 3 major video providers that have deals expiring at year-end (Comcast, Time Warner Cable and DirecTV).