from: NY Times [1]

November 27, 2007
NYT Editorial
Regulating Cable

In 1984, cable companies convinced Congress that they were mere minnows that needed to be exempted from many regulatory requirements so they could compete against the titans of broadcast television. That may have been true back then, but now cable companies are media titans, and they should be regulated. Today the Federal Communications Commission can take an important step toward that goal.

The Cable Communications Act of 1984 stipulated that if cable systems with at least 36 channels ever reached 70 percent of households, and 70 percent of those households subscribed to a cable package, the F.C.C. could set up whatever regulations were necessary to promote “diversity of information sources.”

That moment appears to have arrived. The chairman of the commission, Kevin Martin, is expected to hold a vote today on a report that finds that cable has crossed the threshold. Despite the outcry from cable carriers, the commission should accept the report.

Far more than in 1984, when broadcast television commanded the vast majority of viewers and cable penetration was low, there is a good case for energetically regulating the cable industry. Out of the regulators’ sights, the cable giants have cornered the basic cable markets, keeping competitors at bay by cutting favorable package deals with programming networks, which are sometimes part of their own conglomerate.

Twenty-five years ago, cable carriers promised to provide consumers with a wealth of new programming options. Today, the carriers and their packages of unwanted channels are obstacles to choice. And their offerings are expensive: cable TV rates have been rising faster than inflation for years.

The F.C.C. can reverse these trends and protect consumers by laying down some reasonable rules. They should restrict preferential deals between programmers and the big cable systems. This would allow competing players — like satellite TV and phone companies — to put together attractive packages that would give consumers more choice. The commission should also make it easier and less expensive for independent programmers to lease access on cable systems.

Cable companies argue that their penetration is nowhere near the regulatory threshold, and claim the counting methodology is flawed. But the F.C.C. doesn’t count cable subscribers — it gets its data from the industry. If cable companies can prove they haven’t hit the threshold, they should make their case. If they are right, the F.C.C. should reconsider. The cable industry is too big and too important to be given a regulatory pass.