TV Execs Blast FCC Cable Regulation Proposal

Chernin, Iger, Zucker, Dauman All Agree: Plan Goes Too Far

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WASHINGTON (AdAge.com) -- Top execs at the four broadcast and cable media companies submitted a letter jointly yesterday to the Federal Communications Commission opposing its plans regarding new regulation of cable industry competition or procedures.
Kevin Martin
Kevin Martin Credit: Jim Ruymen

Peter Chernin, president-COO of News Corp.; Robert Iger, president-CEO of the Walt Disney Co.; Philippe Dauman, CEO of Viacom; and Jeff Zucker, president-CEO of NBC Universal, said there is "no conceivable justification of government intervention" in the industry, citing "vibrant competition" for programming and distribution and "myriad options and alternatives" available to consumers for choices.

Two FCC reports
The letter comes as the FCC next Tuesday will release two reports, one on video competition and another regarding leased access and programming diversity.

The first report is expected to say that cable is now available to 70% of the nation's homes and is seen in 70% of households, a benchmark that allows the FCC to impose some additional regulation under federal law. The second report could call for cuts in the rates that companies pay to lease channels and also could offer a procedure for arbitrating disputes about carriage of broadcast stations on cable.

Consumer groups and Hollywood unions have called for the FCC to require cable providers to grant access to independent programmers or channels. They say 1984's deregulation of cable set the 70% benchmark as a safety valve against the cable industry getting too much market power and control over what Americans watch. The cable industry and broadcasters are worried any mandate could force off some channels to make room for others.

Anti-cable agenda?
Kyle McSlarrow, president-CEO of the National Cable and Telecommunications Association, last week accused FCC Chairman Kevin J. Martin of trying to promote an anti-cable agenda in an effort to get cable to voluntarily offer a la carte programming, though the agency has no authority to require cable companies to do so. Mr. McSlarrow has also questioned the veracity of the 70% statistic.

Mr. Martin -- along with critics of cable price hikes and of content that is deemed too violent or too sexual -- have touted a la carte as a way to fight back and give viewers more control so that they aren't paying for content they don't want. Cable groups have argued such pay-for-what-you-want packages would make it hard for smaller cable channels to survive if they're not part of a basic subscription plan.

Earlier today, a majority of Republicans on the House Energy and Commerce Committee said additional regulation was unwarranted. In addition minority groups sent their own letter, saying any new rules could backfire, forcing off minority programming and channels.

Questioning FCC's justification
The media execs in their letter today questioned the justification for imposing any new rules. "We are alarmed at recent press accounts and public statements by FCC officials purporting to find undue concentrations of market power that would justify a wide range of government interventions into the media marketplace where we compete every day," according to the letter.

"To be sure, there was a time when American consumers who wished to enjoy subscription TV had few if any alternatives to their local cable system. ... This is no longer the case for the vast majority of U.S. consumers."

The letter called the U.S. marketplace "preeminent on the world stage" in competition and diversity. "Ill-considered and unjustified government regulation cannot be permitted to undermine this vibrant American industry," it said.

In announcing next week's agenda, the FCC also indicated it intended to act on a program to increase ownership diversity, though it offered no details. The Minority Media and Telecommunications Council has asked the FCC take action on more than a dozen recommendations to ease the way for minorities and women to get FCC licenses.
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