About Face? Or not really...?

What's going on here? Rep. John D. Dingell (D-Mich.), chairman of the U.S. House of Representatives' Energy and Commerce Committee announced Monday that he was investigating the Federal Communications Commission. At the heart of the matter is Dingell's accusation of FCC Chairman Kevin Martin of "possible abuse of power" and a failure to operate fairly and openly in handling proposed cable TV and media ownership regulations. Now this is an interesting turn of event.

Sherman, set the wayback machine for 2004

Anyone remember Martin's predecessor Michael Powell? Yeah, the guy derided by anyone who wasn't a fan of the cable and telephone carriers for being in their back pocket and pushing a de-regulation agenda to benefit those players at the consumers' expense. Fair or not, that was his rap. Powell's policies were mostly in step with the Bush Administration's de-regulation agenda and certainly in line with traditional Republican economic policy. In replaceing Powell, Martin quickly let it be known that he wanted to ease the rules on ownership of newsapers and TV stations. This appears consistent, doesn't it? Except that he also came out quickly and vocally for re-regulating the TV industry arguing that cable companies are garnering too dominant a position in the market. Huh?

This is baffling to me. Martin has served President Bush for many years prior to the President appointing him to the top role at the FCC as legal advisor, member of the Bush-Cheney transition team, and as Special Assistant to the President for Economic Policy at the White House - then has served as faithful steward of the Administration's policy on the FCC for over six years. It seems odd that he'd break with the pro-business agenda. But Martin has been the champion of "a la carte programming" - forcing the cable companies to abandon their "all or nothing" content offerings and guiding them to offer consumers to the option to only pay for the programming they wish. Sounds awfully progressive to me, and certainly not in step with Bush Administration of prior Chairman Powell's policies. A Bush appointee championing consumer rights at the expense of corporate America? Maybe I did see a flock of Vietnamese Pot Bellied pigs aloft last night.

So why would a Democratic congressman who is clearly on the side of greater regulation go after Martin? Dingell evidently decided to go forward just days after Martin came under fire for withholding from his FCC colleagues data that did not support Martin’s conclusion about the scope of cable industry’s subscriber penetration. Huh? Martin's contention is essentially that the cable companies are amassing too much market power and Congress shot down his proposal last week to introduce regulation to level the playing field. Now Dingle is alleging that Martin withheld information that would undermine Martin's contention: essentially, data that would prove that the cable companies are not garnering dominant market power. Multichannel News reports that Dingell wrote a three page letter to Martin questioning the latter's management of the FCC and noting that FCC Republican member Robert McDowell and FCC Democratic member Jonathan Adelstein refused to accept Martin’s cable data, accusing Martin of withholding data that contradicted Martin's assertion that cable has at least 70% subscriber penetration.

Who's Misdirecting Whom?

So what gives? I don't know. The back-channel stuff I'm reading from industry watch dogs - the folks in the fourth estate who try to hold carriers and the media accountable - seem to be beating a jungle drum about a rather big conspiracy. Namely, they're suggesting that Martin essentially created this whole tempest to kill the growing attention being paid to subscriber growth and monopolistic power of the cable companies. If Martin is publicly crucified for falsely accusing the cable companies of monopoly, that ought to take the heat off for a couple of years, oughtn't it? Its not not that far fetched: with the hundreds of billions of dollars at stake in the next decade, the MSOs, DSOs, and Telcos are lobbying like mad and the bribing of Martin would be chump change. Still, fairly unlikely.

Now if only a case would come before the court challenging whether or not MSOs have the right to block or reroute content over the bandwidth they sell their subscribers!

Posted by Tom Hammer on December 4, 2007 7:18 AM | Permalink