The Federal Communications Commission has drawn up an ambitious to-do list, topped by review of two pending wireless mergers, for the last few months of the Bush administration.FCC Chairman Kevin Martin on Thursday said the agency will try to finish its review of Verizon Communications Inc.'s pending acquisition of Alltel Corp. and Sprint Nextel Corp.'s purchase of Clearwire Corp. before year end.
The agency is also hoping to tackle issues related to the rates phone companies pay each other to connect calls, to tee up two airwave auctions and to decide on whether to allow high-tech companies to use vacant, unlicensed television airwaves for a next-generation wireless gadgets.
Mr. Martin didn't mention new cable regulations on his list, but that hasn't stopped the cable industry -- which has come under more scrutiny than any other industry under his watch -- from taking pre-emptive measures. Leaders of the influential Senate Commerce Committee, prodded by cable lobbyists, recently sent a thinly veiled letter warning Mr. Martin and other FCC commissioners against imposing more regulations on cable.
"Pursuing contentious policy initiatives, such as the unbundling of wholesale subscription television channels, would divert the attention [of FCC staff] at a critical time," they wrote.
Less than two months until Election Day, Bush administration officials at agencies all over Washington are making a final push to change or enact rules before the White House changes hands. Earlier this year, budget officials gave agencies a deadline to propose new rules, but regulators at various agencies are trying to shove issues out the door.
Mr. Martin has repeatedly said publicly that the FCC staff isn't currently working on anything related to the issues cable is most worried about.
But it is a measure of just how bad relations are between the cable industry and Mr. Martin that few seem to believe him. Cable companies fret he is planning to propose regulations that would make it easier for independent programmers to demand arbitration when local cable operators refuse to carry their channels.
Meanwhile, large independent cable programmers including Walt Disney Co., News Corp. and Viacom Inc., are especially worried that the FCC could approve a proposal that would require them to offer individual channels to cable systems at "reasonable" rates.
News Corp. owns Dow Jones & Co., publisher of The Wall Street Journal.
Programmers offer channels individually now, but cable systems get a better deal by purchasing discounted bundles of channels. Programmers argue the FCC would essentially be setting new price controls and any cost savings to cable systems wouldn't necessarily filter down to consumers.
In the uncertain economy, "it would be a jarring oddity for the FCC to indulge controversial pet proposals in a last minute and hasty effort to restructure an entire business model that has served consumers well for over two decades," said Kyle McSlarrow, head of the National Cable & Telecommunications Association, a trade group.
Mr. Martin declined to comment for this article. He told reporters earlier that "I can't give you a timeframe for what the commission will do, if anything," on the cable-unbundling issue. "What I can say is that I'm concerned about the increasing cable rates that consumers are having to pay. Cable rates have doubled over the past decade."
Mr. Martin has argued so-called wholesale unbundling would lead to lower cable prices because cable systems wouldn't be required to carry unwanted channels just so they can get popular channels like ESPN.
By: Amy Schatz
Wall Street Journal; September 26, 2008
