WASHINGTON (Reuters) - U.S. cable television operators are scrambling to oppose a Federal Communications Commission proposal that could lead to tougher oversight of the industry, a source said on Monday.
FCC Chairman Kevin Martin is proposing that the agency has the authority to impose stricter regulations over the industry based on a 1984 law that gives FCC more clout if cable subscription exceeds 70 percent of the households where service is available, according to the source, who is familiar with Martin’s proposal.
Martin’s proposal would tighten his agency’s grip on cable companies such as Comcast Corp and Time Warner Cable Inc.
The proposed finding is part of an annual FCC report on competition in the pay television market, which goes before the full commission for a possible vote at a November 27 commission meeting, the source said.
“This (would give) the commission broad authority to regulate in areas where its present authority may be limited or ambiguous,” said Andrew Schwartzman, head of consumer advocacy group Media Access Project.
An FCC spokeswoman declined to comment.
The prospect of tighter FCC control was immediately criticized by the cable industry’s trade group, the National Cable & Telecommunications Association.
The association’s president, Kyle McSlarrow, called the 1984 provision “a relic” and said several independent studies had concluded cable TV subscriptions fall well short of the 70 percent threshold.
“Twisting statistics in order to breathe life into this rule is simply another attempt to justify unnecessary government intrusion into a marketplace where competition is thriving ...,” McSlarrow said in a statement.
Martin has criticized the cable TV industry over steeply increasing rates, programming that some viewers find offensive and its reluctance to let customers choose individual channels on an ala carte basis.
One example of possible stricter regulations is already on the FCC’s November 27 meeting agenda — a proposal by Martin that would force cable operators to cut the price they charge to lease spare channels to programmers, the source said.
Industry officials fear that a 70 percent finding by the FCC could ultimately be used by Martin to justify even more far-reaching regulations, such as imposing restrictions on consolidation in the industry or forcing operators to offer channels ala carte.
Schwartzman said Martin may have changed the way the cable subscriber percentages are calculated in response to past criticism from the Government Accountability Office over the way the numbers were derived.
Schwartzman disputed the industry’s characterization of the 70 percent provision as a relic. When it was approved by Congress in the 1980s, it was in response to concerns among consumer groups that cable operators might gain too much market power someday, he said.
“If the numbers (meet the threshold) the commission is supposed to pull the trigger,” Schwartzman added.