from: MultiChannel News [1]

Did Martin Flunk A Cable Math Quiz?

By Ted Hearn -- Multichannel News, 11/16/2007 2:15:00 AM

Washington - Federal Communications Commission chairman Kevin Martin says that the cable industry’s penetration of the U.S. television market, for the first time, has crossed 70% of households in the U.S. that can subscribe to cable systems offering more than 36 channels of programming.

Crossing that threshold potentially gives his agency broad legal authority to re-regulate the industry.

That’s because FCC gets a booster shot of power over cable when 70% of households are passed by a cable system with at least 36 channels -- and 70% of those households in turn subscribe to such cable systems.

But in his haste to exert more authority over cable by invoking the so-called 70/70 test, set out in 1984 legislation, Martin might have tripped over some bad data.

The source on which he relied for his results says its data cannot be wholly relied on.

Martin obtained his 70% result by relying solely on data culled from the Television and Cable Factbook, published annually by Warren Communications News. In the past, the agency's analysis included not just Warren but two other outside sources and its own annual cable price survey.

But Warren chairman and publisher Paul Warren said Wednesday that his company’s data is incomplete. Why? Not all cable operators agree to disclose their subscriber and homes passed totals for its survey.

“As a result, even though we believe we have data representing more than

96% of all cable subscribers, this data is not well suited to determining whether the [FCC’s 70/70] threshold has been met,” Warren said in a statement.

According to Warren data, cable penetration is 71.4%, more than enough to trigger FCC authority but higher than past results that put cable penetration no higher than 68%.

Last year, the FCC’s report on video competition put cable’s penetration at 59.6% of homes passed nationally, well under the threshold.

The idea that Martin is presenting -- that cable penetration rose in a year when cable operators lost about 200,000 customers and satellite TV providers gained 1.8 million -- did not sit well with his fellow Republican FCC members Robert McDowell and Deborah Taylor Tate. The commissioners on Nov. 14 jointly sent a letter to Warren requesting “any and all information” it provided to the FCC.

“We are basically jumping from saying they were under 70/70 before but now, even though their subscribership declined, [cable is] over 70/70 when we use the Warren numbers,” an FCC official said.

An FCC official would not confirm that Martin relied solely on Warren.

“I will say that the source of the data is the same that has been used in reports in the past and, as far as we know, have not been disputed,” the FCC official said.