Cable TV Pressured to Clean Up Offerings
The Federal Communications Commission has warned the nation's two leading cable TV companies that unwanted conditions could be imposed on their proposed acquisition of a rival if they do not agree to curb the proliferation of sexually explicit programming, according to company sources.
Faced with what some are describing as an ultimatum, Time Warner Inc. and Comcast Corp. have sought to satisfy FCC Chairman Kevin J. Martin's demands by pressuring the rest of the industry to come to a consensus on how to respond, said these sources, who requested anonymity because of the sensitivity of the regulatory approval process.
Martin has made clear in closed-door meetings that he would like Time Warner and Comcast to help advance his anti-indecency agenda. The companies are seeking to acquire Adelphia Communications Corp. for $17.6 billion.
Through a spokesman, Martin declined to comment. So did representatives of Time Warner and Comcast.
Cable operators are not eager to pick a fight with the FCC. Although the agency lacks the authority to make new rules, it does have the power to rein in the industry on several fronts. For example, it will determine the speed at which phone carriers can enter the pay-TV business.
Phone companies, seeing this as an opportunity to build political capital in Washington, have seized on the indecency issue by agreeing to allow customers to subscribe only to channels they want.
"There are a lot of places Martin can squeeze cable operators and indecency is a pet peeve of his that's not going away," said one cable executive. "We have to live and work with him until his term ends in 2009."
Although reluctant to anger Martin, many cable programmers quietly complain that he is trying to extract concessions from an entire industry using leverage from a single transaction -- the Adelphia deal -- that stands to benefit only two companies.
So why would they go along? The cable industry fears that if it doesn't agree to a voluntary solution, policymakers could soon force an alternative on them that would be far more restrictive.
Martin publicly called last week for all cable operators to offer channels a la carte instead of in bundled packages, reversing the agency's position under Martin's predecessor, Michael K. Powell. A la carte pricing would allow subscribers to have only the channels they wanted.
