Comcast is feeling the heat these days — and it's not just from the competition. The unlikely source is the Federal Communications...
WASHINGTON — Comcast is feeling the heat these days — and it’s not just from the competition. The unlikely source is the Federal Communications Commission.
Led by Republican Chairman Kevin Martin, the FCC has been seeking to impose restraints on the loosely regulated cable industry, with Comcast bearing much of the brunt as the nation’s No. 1 cable provider.
While the White House has pushed an anti-regulatory agenda for most other industries, the FCC in recent months has taken steps to limit the size of cable franchises and force the industry to change the way it offers and prices programming.
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Recently Martin launched an investigation to determine if Comcast has interfered with Internet traffic by blocking broadband subscribers from sharing files online.
The moves have prompted the industry and conservative groups to accuse Martin of engaging in a “war on cable.”
“There is an agenda from a Republican chairman that is anti-free market and anti-competitive,” said Kyle McSlarrow, president of the National Cable and Telecommunication Association. “It is disturbing.”
FCC spokeswoman Mary Diamond disputed McSlarrow’s characterizations, saying the commission wants to create a competitive marketplace.
“Our focus is not on the welfare of a particular industry, but the welfare of consumers and ensuring they receive the benefits of competition in the form of lower prices, more choice and better services,” Diamond said.
“Consumers have not seen those benefits from cable,” she said. “The average cost of cable has almost doubled from 1995 to 2005, increasing 93 percent, while the cost of other communication services fell.”
Martin, 41, was a White House economic-policy aide before being named by President Bush to the FCC in 2001; he assumed the chairmanship in 2005.
He has been a lightning rod on a range of issues, but he has been most aggressive with the cable industry, complaining about its “skyrocketing” prices, indecent programming and market tactics.
High on his agenda has been an effort to get cable to switch from offering bundled programming packages to a potentially lower-priced, a la carte, or per channel, payment system — a move vigorously opposed by Comcast and other operators.
Between the FCC and growing competition from telephone companies, Comcast is suddenly on the ropes.
The Philadelphia company, which has 24 million customers nationwide and rang up $23 billion in sales during the first nine months of 2007, has seen its share price tumble during the last six months, closing Friday at $17.03, down from a high of $30.
Consumer organizations have not always been happy with Martin but have tended to side with him when it comes to taking a harder line against cable.
“It is fair to say that Kevin Martin has taken a very aggressive posture toward the cable industry,” said Andrew Jay Schwartzman, chairman of the Media Access Project, a nonprofit advocacy group.
“He does not seem to be afraid of taking steps to create a competitive environment that will enable new entrants to attempt to challenge the cable monopoly.”