Opponents Growing To Martin's Unbundling Plan

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Washington -- Federal Communications Commission chairman Kevin Martin is coming under pressure to abandon plans to bring cable networks and TV stations under tighter regulatory control.


Open opposition is coming from such big media names as Viacom, NBC Universal, the Motion Picture Association America, and the National Association of Broadcasters. Even the American Cable Association has recorded a few reservations.


Viacom's D.C. lobbyist DeDe Lea, joined by BET chairman and CEO Debra Lee, visited last week with FCC Democrat Jonathan Adelstein to complain about Martin's regulatory scheme.


"We pointed out the [FCC] has no statutory authority to regulate either independent programmers or the wholesale market for the sale of video programming," Viacom said in a Dec. 8 filing at the FCC.

Martin's plan would bar any cable network from demanding access to a specific programming tier or to a certain percentage of subscribers. TV stations that insist on compensation could not demand access to all cable subscribers. Contracts in conflict with FCC policy would be void.

At bottom, Martin would empower cable operators to decide nearly all pricing and packaging options for consumers, which Martin believes would reduce pressure on cable operators to raise their rates each year.


Powerbrokers on Capitol Hill have not indicated publicly whether they support Martin. In September, Senate Commerce Committee chairman Daniel Inouye (D.-Hawaii) told Martin that the FCC's overriding mission, through actions undertaken by the FCC's Media Bureau, was a smooth DTV transition scheduled for Feb. 17, 2009.


"Pursuing contentious policy initiatives, such as the unbundling of wholesale subscription television channels, would divert attention of the bureau at this critical time," Inouye said.


Martin wants the FCC to approve his plan Dec. 18. That would launch a notice of proposed rulemaking (NPRM), which wouldn't conclude in a vote until long after Martin has stepped down as chairman.


Martin -- an outspoken critic of cable program bundling -- has himself tied the cable programming regulation proposal to a proposed order designed to help independent programmers use an FCC complaint process to gain cable carriage.


ACA -- which supports Martin's goal of taking bargaining leverage away from cable programmers -- has voiced concern about Martin's program carriage reforms, especially the provision that would allow a cable network to file a complaint against a cable operator that didn't own a competing channel.


"Non-vertically integrated operators do not have an incentive to engage in conduct that would unreasonably restrain independent programmers' ability to compete fairly .. " ACA said in Dec. 9 FCC filing.

A cable industry source said Wednesday night that Martin has removed the language that ACA opposed.

Cablevision executives made the rounds at the FCC Monday, stumping on behalf of Martin's programming NPRM in the offices of FCC Democrat Michael Copps and FCC Republicans Deborah Taylor Tate and Robert McDowell.


"The time is ripe to explore a proposed rule that would preclude programmers from dictating placement of expensive programming in the expanded basic tier ..." Cablevision vice president of legal and regulatory affairs Michael Olsen said in a Dec. 9 FCC filing.


Cablevision is the only major cable operator supporting Martin, creating a rare split among industry leaders on a major regulatory issue. In its FCC advocacy, Cablevision has not been relying on its long-term D.C. law firm, Mintz Levin Cohn Ferris Glovsky and Popeo, for support. Mintz, Levin also represents the National Cable & Telecommunications Association.


Nor has the public record included participation by Catherine Bohigian, who left Martin's office in September to become Cablevision's first full-time D.C. lobbyist at least since 1992. Media lobbyists, who asked not to be named, said Bohigian is making calls trying to drum up support for Martin.


The NAB is protesting Martin's position that cable operators should be allowed to sell TV stations a la carte, or in an optional package if stations demand compensation.


"We urge the [FCC] to reject proposals calling for improper government intrusion in the free market retransmission consent process created by Congress," NAB attorney Erin Dozier said in a Dec. 10 FCC filing.

MPAA, representing Hollywood studios, made the same point.


"The [FCC] has absolutely no authority .... to change the statutory provisions regarding cable carriage of broadcast stations," MPAA said in a Dec. 5 letter to the FCC.

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