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Dear Reader:

We wanted to let you know that, after nearly three years of operation on the World Wide Web, National Journal's Insider Update: The Telecom Act ceased publication as of January 1, 2008.

We took this step at a time when the National Journal Group is moving to increase technology coverage -- including reporting on telecommunications and broadcasting issues -- in several of its other publications. In particular, National Journal's CongressDaily -- our twice daily publication for Capitol Hill insiders -- will be adding staff in the coming weeks for this purpose.

CongressDaily will feature the kind of detailed coverage of telecom issues, both on Capitol Hill and at the Federal Communications Commission, that you are accustomed to seeing in Insider Update -- plus a lot more.

If you are interested in a trial subscription to CongressDaily, please call 800-424-2921 or e-mail us at memberships@nationaljournal.com. Thank you for your readership and support of Insider Update, and please don't hesitate to write to me at lpeck@nationaljournal.com if you have any questions or concerns.

With best regards,
Lou Peck Editor In Chief

« Markey Looks To Reignite Telecom Debate | Main | Martin Focused On Boosting Competition »

Martin's Clash With Cable Isn't Finished

By David Hatch

(Wednesday, November 28) The cable industry won a major battle Tuesday night by fending off a series of new regulations, but it still faces challenges in its war with FCC Chairman Kevin Martin.

While Martin failed to garner support for a finding that cable operators have reached a market-penetration level that warrants re-regulation, the agency approved a plan to collect additional data to determine whether the threshold has been met. The cable industry asserts that the chairman's real goal is to create a regulatory environment that would force systems to offer per-channel pricing, a model known as a la carte that operators strongly oppose.

The firestorm surrounding Martin's recent determination that cable had surpassed the so-called 70/70 benchmark resulted in a nearly 12-hour delay of Tuesday's FCC meeting. Under the rule, the government can impose new restrictions if cable service is available to more than 70 percent of households and serves at least 70 percent of them.

"The commission concludes that the only way to accurately measure the 70/70 test is to have the cable industry submit data," the FCC said in the latest version of its annual video competition report, adopted Tuesday. It instructed operators to provide subscriber information for each ZIP code within the next 60 days.

"As we have repeatedly made clear, our industry welcomes the opportunity to supply and rely on the best available data," Kyle McSlarrow, president and chief executive officer of the National Cable and Telecommunications Association, responded in a statement.

The cable industry already must provide statistics for systems with 20,000 or more customers. "Additional data will confirm that the commission was correct in rejecting the 70/70 finding today," he said.

Speaking at a telecommunications conference Wednesday, Martin, a Republican, had a positive spin on Tuesday's events. "This is not the first time that the commissioners have had strong differences of opinion, and I'm sure it won't be last," he said. The FCC reached a "reasonable result" by deciding to collect more information, he added.

Critics view the arrangement as a face-saving measure after questions were raised about the accuracy of the figures Martin championed.

The five-member agency did vote 3-2 to reduce by 75 percent the rates that programmers pay to lease cable capacity. Martin allied with the agency's two Democrats for passage, while his two GOP colleagues dissented.

The item is designed to promote the carriage of independent and diverse voices on systems, which must reserve 15 percent of capacity for the channels. "We don't think there was justification in the record for the significant cut in the rate," NCTA spokesman Brian Dietz responded.

In other late-night action, the FCC: 1) dropped a plan to require cable systems to carry ancillary digital signals leased to minorities and women; 2) adopted a series of rules designed to promote the availability of low-power FM service; 3) required broadcasters to provide more information about the levels of local programming they air; and 4) proposed a five-year extension of the "do-not-call registry" against unwanted telemarketing.


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