FCC's Martin Fires One Last Time at the Cable Industry

As the Bush administration left Washington yesterday, there were no controversial, Marc Rich-style pardons to digest, but that doesn’t mean there weren’t any parting shots. According to a story in Broadcasting & Cable, outgoing FCC chairman Kevin Martin suggested “hundreds of thousands of dollars in proposed fines against cable operators.” Their crimes? “Failing to provide sufficient information to the commission in its investigation of the migration of channels from analog to digital, changing rates without sufficient notice, and more.”

The cable companies which Martin names include Comcast, Time Warner, Cablevision, Charter, Cox, Comcast, Bright House and Harron, which, in addition to hindering the investigation, he claims have been migrating channels to digital without lowering the cost to customers for depleted analog service. In some cases, Martin alleges, rates were even raised. This controversy all started with Consumers Union, which wrote a letter to the FCC back in October saying that: ”

Many cable operators have begun moving cable programming to a digital-only tier and charging consumers an extra fee each month for additional cable boxes in order to receive this programming. Consumers are left paying the same monthly rate for significantly less service, or rent more expensive set-top boxes for each television set they own.

In a letter to Senators Jay Rockefeller and Kay Bailey Hutchinson (the chairman and ranking member, respectively of the Senate Committee on Commerce, Science and Transportation), Martin says:

The cable operators’ refusal to provide full information has delayed our investigation and inhibited our ability to examine allegations raised in … nearly 600 consumer complaints.”

For the contentious battle between Martin and the cable industry, this is the final salvo. It will be fascinating to see whether the Commission’s new appointee, Julius Genachowski, has the same passion for railing against out-sized cable bills that Martin did. As I’ve said in an earlier post, Genachowski’s resume is more geek than government regulator, so it’s expected he will focus in on issues like Net neutrality and free WiFi for all. However, in an environment where one of the big problems is consumers getting hosed by the faltering economy, this might be an issue Genachowski grabs on to. As is pointed out in the Consumers Union letter, the cable industry has been chugging along relatively unscathed by the economic crisis, and when almost every other industry is tanking, its continued profits may be, in the eyes of some, worthy of investigation.