Ferree: FCC to Probe Programming Costs
By Ted Hearn -- Multichannel News, 7/16/2003 6:22:00 AM
A new team of economists recently formed by Federal Communications Commission Media Bureau chief Kenneth Ferree is planning to examine the factors contributing to rising cable rates.
"That's the kind of thing we can do an in-depth study on that question alone. You can posit: Are cable rates driven by programming-cost increases? In fact, one of the papers will be directed at exactly that kind of question: What goes into cable-rate increases?" Ferree told reporters Tuesday.
Last week, the FCC reported that nominal cable rates rose 8.2% for the 12-month period ending June 30, 2002. However, the same report showed that per-channel rates, adjusted for inflation, declined slightly.
Ferree said the cable study would be part of a new emphasis on independent research at the agency. The FCC is often criticized for producing reports based on data supplied by companies it regulates. Critics have questioned whether the company-supplied data are accurate.
"We would ultimately like to do a lot more of our own factual development and rely less on industry information," Ferree said. "I am not impugning the character of the industry information."
On various policy matters affecting cable -- system ownership, dual must-carry, cable-modem service -- Ferree did not reveal any startling news.
Regarding the pending News Corp. merger with Hughes Electronics Corp., he said it was too early to form any judgments except that the deal raised new questions about vertical integration, or common ownership of programming and distribution assets.
"There are new and novel issues that need to be examined here. That's all I'd say. Again, we're a long way from drawing any conclusions about whether any of these things present problems or not," Ferree said. "We've got to know the facts before even we start to make those kinds of judgments."
On a digital-TV matter, Ferree said he did not believe that either CBS or Comcast Corp. was violating FCC chairman Michael Powell's digital-TV-transition plan in connection with their HDTV-carriage dispute.
Comcast told the FCC recently that it was carrying just one CBS station because the network had demanded compensation for the HDTV feed, which, in Comcast's view, was inconsistent with Powell's plan.
"I don't think what CBS is doing is inconsistent with the Powell plan. However, nor do I think that Comcast's election not to have that as one of their five HD signals is inconsistent either," Ferree said.
Ferree said he did not think the Powell plan forbade broadcasters from seeking payment for their HDTV signals. The National Cable & Telecommunications Association has issued statements indicating disagreement with Ferree on that point, noting that the Powell plan said for cable to carry up to five HDTV signals "at no cost."
"That wasn't about a charge from the broadcasters. I believe it was no extra cost to the consumer," Ferree said. "My recollection is that we were not thinking about it in that sense -- that the broadcaster would not be able to ask for compensation for carriage."
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