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Marvin Kitman Headshot

When Lap Dogs Roar

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The most amazing thing that happened in media this week, if not this century or the last millennium, is the Federal Communications Commission discovering leading companies have become too dominant in the cable industry. The giants have become too big, the FCC concluded, and they are planning new rules to open the cable TV market to independent programmers and rival video services.

First of all, who told them? The culprits should be sent to Guantanamo. No, Abu Gharib.

I don't know how to tell our commissioners who are responsible for being the public's watchdogs in these matters, but the cable companies have been restricting diversity for some time now.

Where was the Commission when that pipsqueak Comcast, run by those little guys, the Roberts, Ralph and Brian, a pop and son operation that started out making belts in Philadelphia was fighting it out with the monster Time Warner in 2001 when ATT had a fire sale of its cable units? In one of those thrilling David vs. Goliath stories, Comcast won, a deal valued at $72 billion, according to Daily Variety, creating the country's largest cable TV carrier at the time, with more than 23 million subscribers nationwide.

Comcast's business philosophy: if you can't beat them, buy them.

It was a shark eat shark environment. Still it was disheartening to see those voracious Philly steak guys eating champions of diversity John Malone of TCI, Sumner Redstone of Viacom, and Michael Eisner of Disney for lunch.

A so-called "finding," FCC Chairman Martin leaked to the press, found that cable industry leading companies today may be violating the so-called "70/70 rule." Established by the Cable Act of 1984, designed to promote diversity when at least 70% of American households and at least 70% of those households actually subscribe, an open door policy kicks in.

Apparently, the 70/70 rule bit Chairman Kevin Martin and presumably his four other lap dogs. Well, not actually bit, but growl a little.

What's going on here, the cable industry, firm believers in a Closed Door Policy, can justly ask? Why now, when cable infiltration has slowed down?

A lot of people still don't want cable in their house, the cable industry can argue. I can understand that.

Cable TV is like a leech. It sucks blood of subscribers. Most people can't get it out of the house once it's in. It's like a taxicab with the meter running. The more you watch, the more services you buy. The longer you have it the more pressure from the fifth column in every cable house: the kids, the wife or yourself. And you have to pay more all the time.

These cable guys invented the word "greedy."

The cable industry will not be taking this attempt to ruin their ingenious business plan lying down. Heaven forbid, any government agency tries to restrict reaching their manifest destiny of 100% penetration. They will be the first on the barricades to defend their right to make money by controlling the wellhead of who gets on their systems.

The cable industry has lobbyists who are paid millions to go to Congress and come up with a system of re-regulation far more arcane than the existing laws that only cable companies can understand.

An even funnier notion is Chairman Martin's theory that the FCC open door policy will bring cable rates down. This guy Martin should wake up and smell the stench. Even though he is the Chairman, he hasn't done his homework.

We've been down this road before. The communication law, for example, was revised in 1993, including cable articles designed to curb the cable industry's natural greed. This was because ladies in blue hair had been screaming to Congressmen that cable prices were going up. This had to be stopped.

Congress decided to legislate to curb price increases, something the industry hadn't figured out how to do. In their infinite wisdom, the Congressional committee had lobbyists writing the new legislation. The resulting bill allowed the cable industry to raise rates even higher.

Since Congress approved cable regulations in the Telecommunications Act of 1996, which also promised to lower rates, cable rates had risen an average of 36% by 2000. In other words, according to Gene Kimmelman, a senior director at Consumers Union, cable rates had risen only two and a half times faster than inflation.

If Benjamin Franklin were alive today, he would say: "There are only three certainties, death, taxes and cable bills going up."

What's next on the FCC's findings? Will they finally get around to the finding that duopolies are okay?

A duopoly, you should know, has nothing to do with acapella singers from South Philadelphia. A duopoly is a situation where one person or other entity owns two TV stations in the same broadcasting market. For example, the FCC gave Rupert Murdoch and News Corporation back in 2001 to own both WNYW/5 and WWOR/9 in New York. It would encourage diversity, the FCC argued at a time when Fox Entertainment was bringing us "Married..." Granting Fox a so-called "waiver" was striking a blow for a free press, in the opinion of Rupert Murdoch, who already owned a newspaper (the New York Post) in the same market. Not only did it give News Corp. the freedom to fire a lot of Ch. 9 employees and restrict the flow of local news but it gave Rupert Murdoch the chance to validate A.J Liebling's Law: that freedom of the press is guaranteed only to those who own one (or two or three).

Thanks to the FCC, 5 and 9 became the most important numbers in the New York area since 7 and 11 formed a food chain.

It was actions like these why they don't call the FCC The Federal Comedy Commission for nothing.