MARTIN: REAGAN COUNTER-REVOLUTIONARY

Much to the chagrin and surprise of many old-guard Reaganites, Republican FCC Chairman Kevin Martin has emerged as one of the most regulatory chairmen in decades.

Since assuming the chairmanship three years ago, Martin has been aggressively pushing a government-knows-best agenda designed not only to referee inter-industry relations, but also to shape the content of broadcasting and cable.

The marketplace philosophy that has guided FCC actions since at least the Carter Administration suddenly seems out of fashion.

Martin’s allies are often Michael Copps and Jonathan Adelstein—two old-school liberal Democrats whom previous Republican chairmen would have marginalized.

His prime target has been cable, but in recent months, he has turned his sights to broadcasting in an effort to encourage more local programming.

He’s established new “enhanced disclosure” rules requiring TV stations to file quarterly reports listing the kinds of local programming they air.

And he has launched a rulemaking that could lead to local programming mandates and force stations to ascertain the interests of community groups.

Returning to pre-1980s regulations

Such regulatory burdens were cast off during the Reagan Revolution of the 1980s.

The idea of bringing them back is all too much for the man who led that revolution at the FCC, then-Chairman Mark Fowler.

“This unfortunate and wholly unconstitutional action by the commission smacks more of Moscow under the old Soviet empire than Main Street USA,” says Fowler of the localism initiatives.

“The FCC, in effect, becomes the master program director for our nation’s broadcast stations,” he adds.

“The voices that use air and electrons must be as free from government control as the press that uses paper and ink,” Fowler continues. “There are no reasons to justify different treatment for the electronic press—only excuses.”

Another high-ranking FCC Republican from the heyday of deregulation also expresses alarm.

“It’s as if the past four decades never happened,” he says. “This is as regulatory a commission as we’ve seen in a quarter century—kidvid, indecency, now the ascertainment redo and looming local program mandates.

“This from a Republican agency? Did Kevin learn nothing from Furthgott-Roth or from Com Law 101?”

Former FCC Commissioner Harold Furthgott-Roth is arguably the most deregulatory commissioner in history. Martin served on his staff in the late 1990s before going to work for the Bush 2000 campaign and the White House and returning to the agency as a commissioner in 2001.

Despite repeated requests, Martin declined to be interviewed for this story.

Conservative disappointment

Conservative Republicans thought Martin would continue the pro-business approach of his predecessor Michael Powell.

The chairman has “definitely been a disappointment,” says the Heritage Foundation’s James Gattuso, an FCC policymaker under former Republican Chairman Al Sikes during the first Bush aministration.

“There have been so many opportunities to get some momentum for market reforms that are much needed. I am afraid his legacy will instead set the groundwork for an erosion of markets and set the groundwork for more government intervention,” Gattuso says.

Even when the 41-year-old Republican moves in a more deregulatory direction, conservatives feel he doesn’t go far enough.

Last month, the commission lifted the newspaper-broadcast crossownership ban for the top 20 markets but did not repeal the entire rule.

The FCC’s decision was only a “minor inconsequential reform,” says Gattuso. Most broadcasters and newspaper publisher agree.

While Democrats publicly decry the crossownership vote, some are privately surprised by his willingness to step in and regulate.

Public interest advocates who believe the FCC rarely goes far enough in keeping TV and radio in line see Martin as a different breed of Republican.

“Compared to Michael Powell [Martin’s predecessor] he is unquestionably more regulatory,” says Andrew Schwartzman, president of the Media Access Project.

While Schwartzman disagrees with the chairman on a number of things, he regards Martin as a “balanced Republican.”

Schwartzman says Martin “wants less government, but he’s willing to see government take a role where it’s necessary to promote competition.”

House and Senate Republicans are frustrated by Martin’s regulatory bent.

Last November, 24 Republican lawmakers wrote Martin complaining that his proposal to impose new cable regulations was “misguided and harmful.”

They are especially disturbed by Martin’s push to mandate a la carte pricing of cable.

Repeatedly, the House Energy and Commerce Committee’s top Republican Joe Barton (Texas) has complained that Martin has failed to be consistent in applying conservative principles at the agency.

“It baffles me how the same FCC can appropriately eliminate regulations for some segments of industry because of increased competition, and at the very same time refuse to deregulate or even impose more regulation on segments of industry that are creating that very competition,” Barton said during an FCC oversight hearing.

Indeed, Barton is so irked that he’s joined Commerce Committee Democratic Chairman John Dingell in launching a major investigation into the agency’s regulatory procedures and practices.

Barton has even indicated that some type of FCC reform might be needed.

A long interest in localism, indecency

Martin’s broadcast localism initiatives are the latest examples of an interest in content regulation that stretches back to the beginning of his chairmanship.

Martin has been aggressive in going after indecency in broadcasting, processing complaints and issuing stiff fines.

Just last week, the agency fined 52 ABC affiliates $1.4 million for airing a 2003 episode of NYPD Blue.

The chairman also supports legislation that would enable the FCC to fine broadcasters for so-called “fleeting expletives.”

In going after indecency, Martin is following the same paths as the last two Republican chairmen before him, Alfred Sikes (during the first Bush administration) and Powell.

But Martin has gone far beyond Powell and Sikes in other content matters.

Under Martin’s watch, the FCC has mandated that TV stations air three hours of children's educational programming on each of their DTV channels.

He thinks Congress should adopt legislation that would permit the commission to deal with violent content in the same manner as it treats indecent broadcast programming.

Martin is an active member of the Task Force on Media and Childhood Obesity. He has proposed requiring broadcasters to air PSAs aimed at educating the public about the upcoming DTV transition.

And he thinks the commission ought to do something about  product placement in TV advertising and the use of video news releases by TV stations.

Cable his biggest victim so far

Most of Martin’s heaviest regulatory blows have fallen on cable. The Martin FCC has reimposed an ownership cap that would limit cable operators’s subscriber counts to 30 percent of all multichannel video subscribers.

And it has cut the rates that cable systems can charge for leased access channels by 75 percent.

Although Martin has not been able to pass multicast must-carry rules, the agency did adopt temporary carriage rules that force cable to carry TV stations (those that don’t negotiate for retransmission consent fees) in analog and digital for three years after the DTV transition begins.

Yet another anti-cable action was the FCC’s decision to outlaw cable’s exclusive contracts with apartment and condominium owners.

The FCC extended program access rules for five more years, something cable loathes.

The FCC’s set-top box “integration ban” forces cable systems to separate security functions from other functions in their set-top boxes.

Martin’s chief regulatory mission has been to impose a la carte pricing on cable operators. Martin says a la carte will lower cable bills. But opponents feel it is merely another attempt by the chairman to deal with indecent programming.

Telcos uneasy over access stance

Telcos have benefited from franchise reform and the agency’s decision to treat telco’s as information service provider. Major telco mergers including AT&T and Bell South and Verizon’s acquisition of MCI have passed FCC muster.

But telco insiders say Martin has been more regulatory on privacy and roaming issues.

And the commission’s decision on the latest wireless spectrum auction is viewed by some as another highly regulatory move.

It’s believed that telco executives don’t want a la carte regulations anymore than cable.

Clearly, both cable and telcos prefer the commission’s inaction on net neutrality.

But the commission decision to deal with the issue following complaints that Comcast is blocking access has got even telco executives worried about where the FCC will come down on the issue.

Industry executives and their lobbyists are having a tough time fully understanding Martin actions and finding a unifying philosophy underlying them.

Holding out for wholesome

The theory with the most currency is that Martin is for whatever reason determined to make broadcast and cable more wholesome, more responsive and more of a positive force in society.

That is clearly behind his a la carte pricing in cable and for much of his broadcast agenda.

One critic called Martin the “Mike Huckabee of the FCC”—a social conservative unafraid to use the levers of government.

“At the end of the day he’s a populist. He likes to think of himself as the people’s chairman,” says one FCC observer.

Martin has been cheered on by family values groups like the Parents Television Council.

“I know he’s taken a lot of flack particularly from some Republicans about being “too regulatory,” but what’s important to keep in mind is that everything he’s done, particularly on the issues of indecency enforcement and the issue of cable choice, has been to the benefit of children and families,” says Dan Isett, director of public policy for the PTC.

Some lobbyists blame a vindictive streak in Martin for some of their regulatory woes. Because cable and broadcasting resisted his efforts to clean up television, this theory goes, he wants to punish them by heaping on other regulations.

Increasingly isolated

In any event, Martin’s regulatory agenda is leading to his increasing isolation.

The Democrats on the Hill will not forgive him for relaxing the newspaper-broadcast crossownership rule, and neither will liberal media activists.

He wasn’t listening to the public on newspaper crossownership, says Free Press’s Communications Craig Aaron.

“We had these hearings all across the country. It was very clear where the public came down. And yet Kevin Martin went the other way,” says Aaron.

Cable animosity for Martin has grown to such a point that its chief lobbyist, National Cable & Telecommunications Association President Kyle McSlarrow, doesn’t shy away from blasting away at Martin in public. He has nothing to lose.

Broadcasters have resented Martin for what they believe is overzealous indecency enforcement, and they are increasingly concerned about the localism initiatives.

But they have been the beneficiaries of some of Martin cable regulations and have not reach the point of no return like cable has.

Private doubts, public praise

While broadcasters voice doubts privately, they continue to praise him publicly.

“On balance, Chairman Martin has been a good friend of broadcasters,” says National Association of Broadcasters President David Rehr.

“There's never been a regulator who agreed with a trade association on every issue. But Chairman Martin’s even-handed approach, coupled with his appreciation for local broadcasting's service to communities, has made him an exceptional leader and public servant.”

Such statements imply that broadcasters still hope to work it out with Martin by accepting some additional regulatory responsibilities in exchange for some regulatory favors.

But the Old Guard warns against such deals.

“President Reagan and his team worked hard to free broadcasters,” says Fowler. “It’s up to them to stay free.”