Studio chiefs decry interference

FCC's attempt to regulate cable is 'ill-considered'

The heads of four major motion picture studios have told FCC chairman Kevin Martin that his attempts to regulate cable operators could damage the U.S. economy and harm the nation's competitiveness.

In a letter dated Tuesday, News Corp. president and COO Peter Chernin, Disney president and CEO Robert Iger, Viacom CEO Philippe Dauman and NBC Universal president and CEO Jeff Zucker urged Martin to back off his attempts to restore cable regulation.

"Because of the vibrant competition in both programming and distribution, and because of the myriad of options and alternatives available to consumers, there is no conceivable justification for government intervention in this marketplace," the studio chiefs wrote. "Media content is one of the few industry sectors in which the U.S. is still pre-eminent on the world stage. Ill-considered and unjustified government interventions cannot be permitted to undermine this vibrant American industry."

Martin has been searching for ways to force the cable industry to offer its programming on a per-channel basis, and he might have found a way by invoking a provision in the 1984 Cable Act that says the government can regulate cable operators with 36 or more channels once they are available to 70% of the nation's households and at least 70% of those households subscribe to the service.

Martin contends that cable operators have passed the 70-70 threshold and has scheduled a vote on the FCC's "Video Competition Report" for Tuesday. If the findings of the competition report support Martin and are accepted by the commission, that could open the way for new regulation by the FCC. It was unclear exactly what was in the report; calls to the commissioners were not returned Tuesday.

There are questions about the report's veracity, however, and Republican commissioners Robert McDowell and Deborah Tate have both concluded that the data is faulty.

On Monday, McDowell said he would not support the report if it included the data that Martin is using to justify the new regulations.

Martin obtained his data from the Television and Cable Factbook, published annually by Warren Communications News. In the past, the agency's analysis included Warren, two other outside sources and its own annual cable price survey.

Warren chairman and publisher Paul Warren has said that his data is not conclusive because many cable operators refused to disclose the number of subscribers they have and the homes available.

McDowell contends that a change of that magnitude needs to be vetted in the rulemaking process with time for the public to comment.

If Martin cannot depend on the two GOP commissioners, then he would have to gain the support of Democratic commissioners Michael Copps and Jonathan Adelstein. Add the voices of the studio chiefs, and it makes it even more difficult to get a majority. To bolster their argument, the studio heads contend that the necessity for the 70-70 regulation has long passed.

"The reality is that consumers today enjoy a wider range of media choices than at any time in history," they wrote. "The range and diversity of media options available to consumers is almost overwhelming, and all of these options are increasing virtually every single day."