Transcripts

The FCC Tries To Fine Tune Cable Rules

SUSIE GHARIB: Some late developments tonight at the Federal Communications Commission. There could be a vote on a controversial plan to open up the cable industry to new regulation. As Stephanie Dhue reports, the plan has been a hot potato all day.

STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: There should have been five commissioners sitting here this morning, voting on proposed cable regulations, but behind-the-scenes maneuvering kept that from happening. FCC Chairman Kevin Martin wanted the agency to sign off on a report that showed 70 percent of U.S. households with access to cable now subscribe to it. That would trigger potential new rules for the industry. But he couldn`t get the votes needed to move forward. Former FCC Commissioner Gloria Tristani says OK'ing the report would have laid the groundwork for tighter FCC regulation of the industry.

GLORIA TRISTANI, FORMER FCC COMMISSIONER: It would give the FCC opportunity to open proceedings to examine what should we do to address this market power.

DHUE: Specifically, Martin proposed requiring cable companies to lease channels to independent programmers at reduced rates and forcing cable operators to settle disputes with programmers through arbitration. Martin has also championed an a la carte pricing, which would let consumers purchase channels separately. Cable companies have resisted a la carte pricing and dispute they have market dominance, pointing to increased competition from satellite and telephone companies. Analyst Paul Gallant says Martin`s failure is a victory for the cable industry.

PAUL GALLANT, CABLE ANALYST, STANFORD GROUP CO.: For the past few years, the FCC has been a pretty negative factor in the minds of Wall Street when it comes to the cable operators and so I think the cable industry is hoping that the setback today for Martin is the beginning of a more positive Washington environment for the cable companies.

DHUE: The battle may not be over. The commission may still consider an alternative proposal that requires cable companies report their market share to the agency. But analysts say the industry should be able to show it doesn`t have enough subscribers to warrant new regulation. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.