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Martin, On Way Out, Fines Cable Operators

Washington -- Federal Communications Commission chairman Kevin Martin has proposed to fine nine cable companies $25,000 each for failing to respond fully to an investigation into the movement of analog channels to a digital tier.

The $225,000 in combined fines, issued Monday night by Martin's chief of the Enforcement Bureau, may be appealed to FCC's commissioners and later in federal court. Martin is resigning Tuesday.

The FCC proposed to fine the following cable operators: Bright House Networks, Cablevision Systems Corp, Charter Communications, Comcast Corp., Cox Communications, Harron Communications, Midcontinent Communications, Suddenlink Communications and Time Warner Cable.

Four distributors that received letters in October but were not issued proposed fines Monday were: Bend Cable Communications, GCI, RCN, and Verizon Communications.

Martin sent a letter Monday to Senate Commerce Committee chairman Jay Rockefeller (D-W.Va.) to announce the fines. A copy also went to ranking member Sen. Kay Bailey Hutchison, the Texas Republican whose surname was misspelled twice.

Martin blasted the cable operators for failing to cooperate.

"Misconduct of this type exhibits contempt for the FCC's authority and threatens to compromise the FCC's ability to adequately investigate violations of its rules," Martin said.

Martin's Enforcement Bureau chief Kris Anne Monteith issued additional fines and proposed fines totaling another $277,500, bringing the total amount to $510,000.

Cablevision, for example, received a $22,500 fine for failing to give subscribers in Randolph, N.J., the required 30 days notice before moving A&E, Animal Planet, and E! to digital. Cablevision also received four $7,500 fines for not providing 30 days notice as required by FCC rules.

Time Warner was the mostly heavily fined at $137,500, with $97,500 related to channel changes made in Hawaii to launch switch digital video technology. The FCC faulted the SDV move because consumers with CableCard-enabled TVs needed to lease a set-top to see all channels that were available before the SDV rollout.

Martin ordered his staff to look at cable operators that moved analog channels to digital and required consumers to lease set-top boxes to maintain access to migrated channels.

In the letter to the senators, Martin complained that cable operators didn't reduce rates for analog-only consumers that lost channels and didn't lease a digital set-top box.

"In short, cable customers have been receiving less from the cable companies but paying the same price or, in some cases, more," Martin said. "For consumers, this situation is unacceptable."
Martin said the FCC received "nearly 600" complaints about cable's channel changes. Cable has 64.7 million video subscribers nationally.

In December, National Cable & Telecommunications Association President Kyle McSlarrow announced an industry plan to stop moving nearly all channels from analog to digital tiers during the first two months of 2009 to minimize potential consumer confusion about the federally mandated shut off of over-the-air analog TV signals on Feb. 17, 2009.

The FCC sent letters to the cable operators in late October requesting a voluminous amount of data, including highly sensitive pricing terms in programming contracts. The FCC gave 14 calendars to respond, which some cable operators felt was insufficient, given that the FCC wanted data as far back as 2006.