Tuesday, December 4, 2007, 9:54 AM ET|Posted by Will Richmond
Somebody needs to seriously clue in Kevin Martin, the chairman of the Federal Communications Commission, who has somehow gotten it into his head that America's cable TV industry needs to be burdened by all kinds of new regulations, despite the fact that competition is coming at the industry from every direction imaginable.
On the probability that you don't think too much about the FCC's actions, nor what they might mean to you, I have a reminder for you: when America's top communications regulator seeks to drive the industry that is America's #1 provider of broadband Internet service into a regulatory ditch, that's a problem for anyone who works in the media, entertainment, telecommunications and technology industries. Mr. Martin's cockeyed plans threaten to do this.
First, a quick recap. In the last several weeks Mr. Martin has sought to use hand-selected (and highly questionable) data to resurrect an arcane FCC prerogative known as the "70/70" rule. It is not worth reviewing what this rule is or whether or not it applies. What is important to know is that Mr. Martin has sought to use this rule to introduce regulations forcing cable companies to submit to federal arbitration to resolve carriage disputes with cable networks and to reduce the prices of certain leased access channels by upwards of 75%. Lingering in the background are further regulations, such as forcing "a la carte" unbundling of cable channels for unfettered consumer choice.
Last week wiser heads prevailed with the other FCC commissioners, many members of Congress and the White House intervening to check-mate Mr. Martin's plans. In fact, so perturbed by Mr. Martin's recent actions is the House Energy and Commerce Committee chairman John Dingell that has opened an investigation into Mr. Martin's handling of the FCC's affairs.
Now, in retreat, Mr. Martin has come up with a new regulation capping any one cable operator's U.S. coverage at 30%. This is particularly targeted at Comcast, which, with 27% coverage, is just a whisker away from hitting the proposed cap.
In criticizing Mr. Martin, let me make clear that I'm no cable apologist nor am I a regulatory libertarian, against all forms of government intervention. I worked in the cable industry from 1990-1998 and know the good, the bad and the ugly of the industry quite well. The government has intervened in the past to correct legitimate market failures caused by clear industry bad actors. But those days are past. Now the cable industry is fighting for its life against the triple threat of satellite, telco and broadband "over the top" competition.
So how is it possible that Mr. Martin has so completely "missed the memo" that America's consumer communications services - video, broadband Internet access and voice - are more competitive today than ever, and that re-regulation is completely wrong-headed? And that technology is enabling a wealth of new services that are causing traditionally distinct industries to compete against one another, with the ultimate winner being consumers? And that real, skilled, high-paying, American jobs which are tied to the innovative media, entertainment, technology and communications markets he oversees will certainly be adversely affected by these onerous new regulations he is proposing?
Of course, I cannot get inside Mr. Martin's head to explain his actions. All I can guess is that somehow he arrogantly believes that Washington's bureaucracy is better suited to sort out the hyper-competition and innovation sweeping these industries than are the free markets and myriad technologies being introduced. How profoundly incorrect that belief is. Last time I checked Mr. Martin's bio, he personally has exactly ZERO day-to-day business operating experience, so maybe someone can remind me what his particular expertise is in these matters? As if all this isn't enough, don't forget about how reckless it is for a regulator to mess around with one of the few remaining vibrant pockets of the American economy.
Mr. Martin's recent actions have shown him to be just another in a long line of seemingly intelligent, but ultimately clueless presidential appointees. Particularly in these tenuous economic times, America can ill-afford to have poor judgment in its chief policy-makers. For all of us who work in the media, entertainment, technology and telecom industries, let's hope the checks-and-balances system continues to work and Mr. Martin's misguided re-regulatory policies don't gain any traction.
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