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from: Broadcasting & Cable

FCC's Martin Talks To Wall Street

By John Eggerton
Broadcasting & Cable, 9/14/2006 5:59:00 PM

The FCC hopes to wrap up an proceeding on video franchise reform by the end of the year, Chairman Kevin Martin told analysts in a conference call Thursday.

He was participating in a Cable, Telecom & Media briefing, part of the UBS Analyst Access Global Conference Call series.

Martin also said he expected the wireless spectrum auction currently winding down would raise about $14 million for the treasury, which is toward the higher end of projections and bodes well for a similar auction of reclaimed analog TV spectrum in 2008.

Martin pointed out that the 180-day shot clock on the commission's review of the AT&T/Bell South merger expires in mid-October and said the commission was aiming to have that review wrapped up by then.

Asked what the prospects were for lifting the ban on newspaper/broadcast cross-ownership as part of the FCC's review of ownership regs, Martin suggested they were pretty good. He pointed out that one of the court's 2003 decisions the FCC did not hand back for repair was its conclusion that there should not be an outright ban.

He said it was still to be determined how many stations a newspaper company could own, and whether that would vary by size of market. He also said that if the commission can't reach consensus on an omnibus rewrite, it might pick out particular issues, with the newspaper/cross-ownership ban would be at the top of his list to tackle.

Martin said he did not see the commission raising the current cap on one companies video subscribers, but also said that he that cap would apply to telco video subscribers once that became an issue.

He said that any move to raise the cap would be predicated on determining the potential public benefit that would justify the move. He has been pitched the argument that it would allow operators more leverage with programmers, but that would have to translate more clearly to a public benefit.

Cable's ears must have been burning as Martin pitched the analysts on a la carte, saying it was a way to control the "dramatic" increases in cable rates over the past few years. He said that while the rates for wireless and phone service and and DSL had all gone down, the price of basic was up 90% in the past decade.

He attributed that to big packages of programming that consumers are forced to take. If cable companies can block any channel viewers ask them to, why shouldn't they also refund the money for those unwatched channels, or let them mix and match their own lineups, he said.

He said that, as it stands, there is not a mechanism for determining the channels viewers want if they are required to take them in such large blocks.