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from: MultiChannel News

FCC May Levy New Rules on Cable TV Operators

By Tom Steinert-Threlkeld -- Multichannel News, 11/10/2007 9:16:00 AM

Kevin Martin is about to step up his attempt to open up the cable television industry’s rate and programming structure, The New York Times reported Saturday, Nov. 10.

Based on an interview with the chairman of the Federal Communications Commission, the Times reported that cable will be found as occupying a position that is “too dominant” in the provision of multichannel video services in the United States. That finding, to come in the commission’s annual report on competitiveness in the communications industry, will give the FCC grounds to try and introduce new regulations on industry pricing practices involving network programming.

The grounds for cable being “too dominant” will be a finding that cable has now achieved a market position that exceeds the 70-70 rule established in the Cable Communications Act of 1984.

That rule states that the commission can adopt rules to promote more forms of "information sources" if cable is available to 70 percent of American households -- and 70 percent of those households subscribe to cable.

The grounds for cable being "too dominant" will be a finding that cable has now achieved a market position that exceeds the 70-70 rule established in the Cable Communications Act of 1984.

That rule states that the commission can adopt rules to promote more forms of "information sources" if cable is available to 70 percent of American households -- and 70 percent of households subscribe to cable.

Using Kagan SNL and Nielsen Media Research numbers, the National Cable & Telecommunications association reports on its Web site that the cable industry has 65.3 million basic subscribers; and that the nation has 112 million TV households.

That works out to one basic cable subscriber in six out of every ten TV households, not seven of 10.

“Every independent analysis of the marketplace shows that cable serves less than 70 percent of the nation's households,” the Times quotes the NCTA’s president, Kyle McSlarrow, as asserting in its report.

If the finding holds up, the FCC could move to force cable networks to sell channels of programming one at a time at the wholesale level to cable's rivals, such as satellite and telephone TV operators; could limit the ability of large operators such as Comcast or Time Warner Cable to grow; and would give independent programmers such as the NFL Network and Hallmark Channel more leverage in gaining access to basic cable distribution.