McDowell: DTV Worries Valid

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Robert McDowell, a Republican appointee of President Bush, joined the Federal Communications Commission about 15 months ago, his arrival securing a nominal 3-2 Republican advantage within an agency that has enormous clout over the cable industry. While McDowell has differed with FCC chairman Kevin Martin on a few important occasions, he has done so collegially. But McDowell’s influence at the agency is minimal, because Martin has received total loyalty from Republican FCC member Deborah Taylor Tate. That being the case, regulation-friendly Martin can marginalize McDowell by cutting deals with the FCC Democrats. Following is an edited Aug. 30 interview with McDowell by Multichannel News Washington News Editor Ted Hearn.

MCN: FCC chairman Kevin Martin seems to have a deep hatred for the cable industry, which he pursues with almost messianic intensity. How is that good for the FCC’s image as an independent agency?

Robert McDowell: I will let the chairman speak for himself. And I will operate from the presumption that he is putting forth policies that he thinks are in the public interest. There are those who disagree with him, including myself sometimes.

MCN: Do you think he has a bias against the cable industry?

RM: Again, I think he’s putting forth what he thinks is the best [policy]. Having grown up here in Washington, it is a town that abounds with conspiracy theories. They’re almost never true.

Sadly, sometimes they are true, and that only leads to support more conspiracy theories. I think he’s putting forth what he believes is the right policy, and some chairmen could be accused of favoring one group over another.

I think probably every chairman has had to deal with those types of allegations, and these are probably no different.

MCN: You have concerns about repealing a law that requires cable customers to buy local TV stations before any cable networks. Why is a government-imposed buy-through good for consumers?

RM: I think in that answer to Congress we were trying to look at all angles of the issue; that’s not a top-tier urgent issue before us right now. If there’s an adverse effect on consumers, we should certainly take that into consideration. I haven’t made a final determination on that consideration.

MCN: On the transition to digital television, isn’t it true that if broadcasters ran informative public-service announcements during primetime, awareness of the Feb. 17, 2009, analog cutoff would probably soar?

RM: I see the DTV transition as being a lot like a political campaign. Yes, if you take a poll, today almost nobody is aware of it. But as we get closer to the deadline, and the availability of the boxes, and as [the National Telecommunications and Information Administration] rolls out their program with the boxes, you’re going to see a lot more consumer awareness.

Nobody has more of a vested interest in this than the broadcasters themselves.

MCN: How concerned are you that the DTV transition could turn into a debacle?

RM: I think we should be concerned. I think we should have a healthy amount of concern, and I think Congress is concerned and legitimately so.

MCN: When do you want the broadcasters to start the PSA campaign?

RM: I think they should ramp them up slowly. I think they should start rolling them out late this year.

MCN: On the 700-Megahertz auction, it comes with open-access conditions, which look like they can involve a lot of dispute resolution by the FCC. Wouldn’t it have been easier to just ban phone and cable companies from bidding?

RM: I think it should be an open auction, without restriction. And if we want to bring in smaller players or new entrants, the way to do that would have been through smaller market sizes and varied sizes of spectrum blocks.

MCN: Why didn’t you play hardball with Martin by teaming up with the two FCC Democrats, giving Google everything it wanted and seeing how the chairman liked that?

RM: Well, if I didn’t believe those conditions were necessary, I wouldn’t be voting for them in a sort of tactical way like that. I try to be more transparent than that.

MCN: There could be a second 700-MHz auction starting after the statutory deadline of January 28. How would that be a legal auction?

RM: That was my concern regarding the second, or the fallback, auction. I’ve been saying throughout this whole process leading up to the order, my concern is we’re not going to meet our statutory deadline.

MCN: Could someone go to court and say the commission is stuck with the results of the first auction?

RM: That’s certainly a possibility. Part of the concern I had overall was the commission’s exposure to litigation over that order, and that could have a snowballing effect and not only for how the auction is executed but, indirectly, it could affect the DTV transition.

MCN: The 1992 Cable Act was passed in part to curb the excesses of Tele-Communications Inc. under John Malone. Do you have any concerns about Malone’s takeover of DirecTV with more than 15 million subscribers?

RM: Still looking at that. No per se concerns over what personality buys a particular property. But generally speaking, unless there is an antitrust issue, a real concentration issue, when it comes to mergers I only look at the merger-specific conditions.

MCN: Has Martin talked about slapping a la carte conditions on that transaction?

RM: Not that I know of.

MCN: On XM-Sirius, is it a merger to monopoly as NAB says or is Sirius CEO Mel Karmazin right that satellite radio is just another pebble on the media beach?

RM: I’ll be curious to see how DOJ [Department of Justice] defines the market. Are we looking at the audio market in general, or are we looking at the market as two satellite companies? And that’s going to be fascinating.

MCN: Should the FCC ask the Supreme Court to take the case that said the FCC can’t impose fines on TV stations for the fleeting broadcast of the F-word?

RM: Oh, we should. I think it’s important. There’s a big public-policy issue and, more importantly, constitutional issue to be decided here. And I think it would be good for the country if the Supreme Court took the case.

MCN: Should the FCC regulate TV violence?

RM: First of all, we’re not statutorily empowered to do so. There may be a constitutional concern there. But, as I’ve said all along, while we have that debate, as the parent of three young kids, I think we should be also talking about all of the options and tools that are in parents’ hands currently to shield their children from objectionable content. The TV violence debate, first of all, has to go through Congress, and that’s a long road right there. Then there may be appeals by industry of that legislation on constitutional grounds. So it could be years before we ever see it enacted. So let’s focus on what we’re going to do in the short term during that time.

MCN: If parents think that cable television is too expensive, too indecent and a poor value, what’s wrong with saying this: Don’t buy it?

RM: It’s an excellent point. It’s a great way to save money and with digital television, you’ll have multicast signals. And in a market like ours you can have, what, 30 or 40 stations to choose from absolutely free, with great signal quality and surround sound, to boot. So if folks don’t like their cable company, they don’t have to purchase from them.

MCN: Is it really the FCC’s job to worry about kids who eat too many Crunchy Cheetos?

RM: I certainly commend the chairman and Commissioner [Deborah Taylor] Tate for using the bully pulpit to help [address] what is a health problem in America. So if we can use the bully pulpit for issues that are not within our direct legal jurisdiction, to increase public awareness, it’s for the common good, then so be it.

MCN: Do you support blocking cable companies from signing exclusive contracts with apartment building owners?

RM: We’re looking at that issue. I do have concerns in general — whether it’s cable or other industries — with exclusive contracts if it’s not a competitive market, if there’s some anti-competitive reason for doing that. If there’s a pro-competitive reason, I have less concern.

MCN: A lot of Washington Democrats say U.S. broadband performance would improve under some sort of unbundling regime. Won’t that take us back to the monopoly phone company-FCC unbundling regime that contributed to the telecom boom and bust in the late 1990s?

RM: I think the best way to arrive at the same destination of fatter and faster ubiquitous pipes is to have more competition. We can have competition among more platforms and competition within platforms. So that, I think, would obviate the need for more regulation.

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