FCC head hasn't lost focus on cable
Last November, commissioners of both political parties accused him of concealing key information that undercut his push for a finding that could have led to sweeping regulation of the cable TV industry. Following other complaints that Martin doesn't give commissioners enough time to vote on certain proposals, a House committee launched a probe into whether the agency conducts its business openly and fairly.
Generally known as a shrewd consensus-builder, Martin seems undaunted by the ruckus. And he still has the cable industry in his sights. In an interview, he said he's determined as ever to do something about soaring cable TV prices. And he says the agency doesn't need to pass new rules to crack down on Comcast if it determines the cable giant unfairly impedes Internet traffic.
"Working with all the commissioners is always difficult and always challenging," the soft-spoken 41-year-old says of the turmoil as he sips tea. "But you always have to regroup and say, 'OK, how do we now try to move forward?' "
As for criticism about his communication style, Martin, whose tenure could be in its final months with a new president taking office next January, says he's not "doing anything differently than what any other chairman has done."
Still, in recent months, Martin has arranged daily meetings between his staff and those of commissioners and started publicizing agenda items three weeks before a meeting. Previously, an agenda came out a week before the meeting.
Building alliances
Martin, who has chaired the FCC since March 2005, has managed to gratify and rankle commissioners on both sides. At a December meeting, he joined the agency's two Republicans to relax media-ownership rules, then aligned with the two Democrats to restrict the size of cable companies.
Although he espouses a light-touch regulatory philosophy, he has been far more willing than his predecessor, Michael Powell, to impose new rules in the name of protecting consumers, irking free-market advocates such as Adam Thierer of the Progress & Freedom Foundation. "There are times when the marketplace might not serve consumers' interest," he says.
An overriding theme has been his exhortations to the cable industry to offer channels individually, or a la carte, instead of in take-it-or-leave-it packages. Martin says a la carte would lower cable bills that have doubled since the mid-1990s.
Cable industry officials say Martin's real concern is racy cable fare, which, unlike broadcast TV content, the FCC has no power to constrain. When cable companies refused to offer a la carte pricing, Martin sought to pressure them to acquiesce with myriad onerous regulations, says Kyle McSlarrow, head of the National Cable & Telecommunications Association.
Martin disagrees, adding he doesn't have "any prospect" that cable companies will break down. "I don't have anything against the cable industry. I have something against consumers paying too much for" cable, he says.
The chairman now hopes to nudge the industry toward a la carte by requiring programmers to offer channels individually to cable companies. Small cable systems have said they can't offer a la carte to consumers because they have to buy bundles of channels from programmers such as Disney, which owns ABC and several ESPN outlets.
But big cable companies, including Comcast and Time Warner, which themselves own numerous channels, oppose the proposal. Analysts say Martin faces an uphill battle mustering support from commissioners. One problem: forcing programmers to bust up packages would do little if one channel costs the same as a bundle. And regulating prices would be thorny.
No matter. "This is a chairman who's not afraid to lose," says analyst Blair Levin of Stifel Nicolaus.
Martin is also targeting questionable cable broadband practices. At a hearing last month, he said the FCC is "ready, willing and able" to crack down on broadband providers that hobble Internet traffic. Comcast concedes it has slowed the content of BitTorrent, a video file-sharing service, but says it does so to better manage its network for all users. Public interest groups say Comcast unfairly restricts applications that compete with its own video services.
Enforcing policy
The hearing sparked speculation that the FCC might pass new rules. Martin says the FCC can simply enforce its "network neutrality" policy statement. It says consumers are entitled to access any Web content they choose. One caveat: Providers may practice "reasonable" network management.
"We're going to be looking at things like, was it OK to arbitrarily say we're going to look at this particular application as opposed to wider-spread network management," Martin says, adding the FCC has made no decision. "I'm certainly concerned by some" of the complaints.
Also on Martin's agenda:
- Digital TV. A recent survey found 36 percent of TV households are unaware of the transition to digital TV on Feb. 17, 2009, which will force consumers with antenna-reliant TVs to buy converter boxes.
Last month, Democratic Commissioner Jonathan Adelstein said Martin has not heeded his calls to form an interagency task force to coordinate consumer education.
Martin says that's not the FCC's role. The agency, he adds, has been occupied with technical aspects of digital TV, such as assigning new channels to broadcasters. Plus, he says, until recently Congress denied FCC requests for funding for consumer outreach. Now, he says, the agency is moving ahead with an outreach campaign. And last week, the FCC ordered broadcasters to air public service ads about the switch.
- FCC auction. An auction of wireless airwaves that's winding down has raised nearly $20 billion. But it's failed to draw a bid for spectrum that would have to be shared with public safety to improve radio communication between agencies.
The FCC could re-auction the spectrum without the mandate to share it with public safety. But, Martin says, "Public safety needs are critical, and we're still going to look for ways to try to resolve that."
- Universal service fund. Martin says the agency must revamp the fund, which subsidizes phone service for rural customers and has jumped 33 percent in the past three years to $7.2 billion. It's financed by a 10 percent surcharge on long-distance bills.
To limit costs, Martin wants wireless and land-line carriers to bid to be a town's lowest-cost provider and win funding. And to raise more money, Martin wants wireless and Net-based phone services to pay the same fees as land lines.
Beyond 2008, speculation has Martin stepping down when a new president takes office and running for Congress in his native North Carolina. He denied political ambitions and hinted he's not shrinking from the recent firestorms - he may stick around until his term ends in 2011 if a Republican wins the White House. "If Sen. (John) McCain wins, we'll wait and see. It's important to continue to focus on addressing as many of these issues as we can."
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