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Cable Finds FCC Allies

Federal Communications Commission (FCC) Commissioner Robert McDowell spoke out yesterday against Chairman Kevin Martin's plans for cable, saying Martin's data doesn't support the idea of new regulations.

McDowell addressed his position in a speech (Word document) at a Media Institute luncheon in Washington, D.C.

He said Martin's assertion that the cable industry is facing less competition and should be subject to more regulation "is a radical departure for the Commission -- a departure being made without sufficient public comment."

Martin recently told the New York Times that new findings could allow him to invoke a "70/70" rule of the Cable Act of 1984 and apply new regulations on cable. The rule kicks in if operators can reach 70 percent of U.S. homes, with at least 70 percent of those homes actually subscribing to a cable service. (See More Martin Hits Coming? )

But McDowell, and fellow commissioner Deborah Tate have loudly questioned the use of that data -- apparently obtained from a Warren Communications cable fact book -- when all other recent research, including some of the FCC's own, has pegged cable video subscriber penetrations at less than 70 percent. (See NCTA to FCC: 'Hands Off!' )

McDowell amplified that view on Monday, noting the FCC last year said cable subscribership was at 60 percent penetration.

McDowell even argued that cable's market share is dropping. Repeating stats provided in a letter sent to the FCC by the National Cable & Telecommunications Association (NCTA) last week, McDowell noted that six of the largest cable operators lost nearly 200,000 video customers in the last year.

"These are figures that cable companies have to report under the Sarbanes-Oxley Act, so presumably they are accurate -- seeing as how prison time could otherwise be involved," he said, adding that DirecTV Group Inc. (NYSE: DTV) and EchoStar Satellite LLC , meanwhile, have gained 1.8 million subs in the last year.

As for the Warren data, McDowell said the managing editor there believes the figures "aren't well suited" for the 70/70 rule.

"He says he had no idea that the information he provided to the mysterious FCC staffer who requested it would be used for such purposes," McDowell said.

If the editor had known, he would have "used footnotes and caveats to put his study in the proper factual and analytical context," McDowell explained.

— Jeff Baumgartner, Site Editor, Cable Digital News

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