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KAI RYSSDAL: Competition in the cable industry will be the topic of conversation at a Federal Communications Commission meeting tomorrow. The chairman of the FCC wants more competition, not just from satellite television outfits but from phone companies too. They’re laying fiber optic cables so they can sell video and Internet service. The cable industry doesn’t think much of the chairman’s proposals. No news there. But neither do some other members of the Commission itself.
Our Washington bureau chief John Dimsdale reports.
JOHN DIMSDALE: Under rules adopted in the 1980s, the FCC can begin limiting cable’s clout once cable lines have reached 70 percent of the nation’s households, and when 70 percent of those households choose cable service. Andrew Schwartzman, of the Media Access Project, thinks it’s time for the FCC to acknowledge the 70-70 threshold has been crossed.
ANDREW SCHWARTZMAN: We think they reached it several years ago.
The chairman of the FCC, Kevin Martin, agrees. He’s using statistics from the “Television & Cable Factbook,” which has meticulously gathered information on the cable industry for 60 years. But publisher Dan Warren says the numbers are incomplete, and even one of the FCC Commissioners, who traditionally sides with consumer groups, questions whether the chairman is acting too hastily. The cable industry couldn’t agree more.
KYLE McSLARROW: Phone companies are now getting into video. Satellite companies are getting into broadband.
That’s Kyle McSlarrow, the president of the National Cable and Telecommunications Association. He says cable’s market share is somewhere around 60 percent, and dropping.
McSLARROW: Now we’re in video, high speed Internet and increasingly competing against the phone companies in phone services. And what we actually have, in reality today, is a red hot competitive marketplace.
McSlarrow is worried the commissioners will use the 70-70 trigger to justify price controls, limits on marketing and even a cap on growth. Tomorrow, the FCC is also expected to rule on reducing the rates cable operators may charge independent programmers.
In Washington, I’m John Dimsdale for Marketplace.