It’s a familiar storyline: frustrated by political opposition to his agenda, the government head declares a state of emergency, invoking an obscure, never before used, provision of the law to assert virtually unlimited authority. Television is the first target. And lawyers are mobilizing.
A summary of Pervez Musharraf’s power grab in Pakistan? Not quite: the story is being played out right here in Washington, D.C., with reports that the FCC – led by Chairman Kevin Martin – will soon assert emergency rule over cable television.
The tool is section 612(g) of the Communications Act. This rather obscure statutory provision states that if cable systems reach 70 percent of U.S. households, and 70 percent of those households actually subscribe to cable, then “the Commission may promulgate any additional rules necessary to provide diversity of information sources.” Never mind other provisions of law – 612(g) — read literally — says that if it flickers and arrives by cable, the FCC can regulate it. (It is far from clear, however, whether Congress intended the provision to have such a sweeping impact).
The Commission reportedly plans to assert powers under this “70-70” rule at a meeting later this month. The declaration would buttress a phalanx of new regulations on cable TV service being pushed by Chairman Martin, including mandated carriage of multi-cast broadcast channels, mandated unbundling of cable channels, caps on the cable ownership, new rules on the purchase of content from programmers, expanded mandates on leased access to channels, and new regulations on cable set-top box devices.
The 70-70 rule – enacted as part of the 1984 Cable Communications Policy Act – has never before been invoked. And for good reasons. As a first matter, cable systems have never reached the required 70 percent subscriber level. Although well over 70 percent of U.S. homes are passed by cable systems, virtually no study shows 70 percent actually subscribe. In its most recent report, the FCC itself estimated this number to be only 56.3 percent.
Since this is a 70-70 rule and not a 70-56 rule, how does the FCC make up the difference? That’s unclear. Communications Daily reports today that the claim may be based on data from Warren Publishing (the owner of Comm Daily), which show just over 70 percent subscribership. But that data is not complete, according to Warren itself.
Another possibility is that the FCC is including numbers that include competing video systems being offered by telephone companies such as Verizon and AT&T. That might be permissible based on literal reading of 612(g), but would be truly Kafka-esque from a policy point of view. In effect, the Commission would be increasing its regulation of the cable industry because of increased competition in the market.
In fact, regardless of how the numbers are being crunched, the advent of competition in video makes new regulation of cable – and much old regulation for that matter – unnecessary. According to the FCC’s report on cable competition, only about 70 percent of video subscribers (a coincidental number) get their signals from traditional cable operators. And that doesn’t count the rapidly growing competition from telco video systems, which promise to revolutionize the video marketplace.
In such an environment, there’s no need for increased regulation of cable. And in no environment should federal regulators be permitted to assume unlimited authority to impose such regulations.
Let’s keep the FCC troops in the barracks.