**STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

*Re: Annual Assessment of the Status of Competition in the Market for
Delivery of Video Programming, MB Docket No. 06-189, Thirteenth Annual
Report (Nov. 27, 2007).*

I support the Commission's Thirteenth Annual Report on the state of
competition in the video programming marketplace. Every year, the
purpose of this report is to provide Congress and the American people
with the Commission's best and honest assessment of competition in the
evolving video marketplace. I support this year's report, but I write
separately to address the important issue of whether the 70/70 benchmark
in section 612(g) of the Communication Act has been reached.

The Commission's determination regarding the 70/70 benchmark has
critical policy implications but, at the same time, is a question of
fact. I would have no hesitation to invoke our authority if the evidence
clearly justified that the standard had been breached. Many positive
initiatives to promote diversity, such as a national baseline PEG
requirement, could result. Yet, it's our job to follow the facts, to
find the truth wherever it may lead. Congress did not ask us to impose
the outcome we might prefer solely based on policy goals, no matter how
admirable they may be. Congress asked for an honest assessment. So, I am
pleased that the revised version of this Report seeks further comment on
this important question and compels all cable providers to provide their
data under penalty of law within 60 days.

In order to base our decision on the facts, Commissioners need access to
all the facts. Unfortunately, the most important data we have -- the
FCC's own numbers -- were suppressed from the Commissioners until the
last minute. I did not learn until after 7:00 pm last night that the
FCC's own 2006 survey found that only 54 percent of homes passed
subscribe to cable. Similarly, the FCC's cable price survey came in at
55.2 percent penetration.

Based on these newly unearthed facts and the conflicting evidence on the
record, I am unable to support a finding that 70 percent of homes passed
subscribe to cable at this time. The data is inconclusive. If we were
truly searching for the truth, it is inconceivable that our own data
would be cast aside without mention. It was just last year that I called
for more rigorous data collection by the FCC. To find that this years'
FCC data was suppressed casts a long shadow over this endeavor. They
tried to hide the ball from their own team.

In every previous year, the Video Competition Report included data from
the FCC's "Annual Report of Cable Television Systems," which solicits
from the operators the very data needed to determine if 70/70 is met,
including subscribership, penetration rates and number of channels
available. Yet, it wasn't until yesterday that it became apparent that
the data from this year's survey was mysteriously redacted from the
draft report we were reviewing.

The draft attempted to rely solely on data from Warren Communications,
while disregarding a multitude of other sources included in previous
reports. This was especially troubling with respect to our own data from
our Annual Report's FCC Form 325. In fact, in the "Supporting Statement"
to FCC Form 325, the Commission justifies its request for this
information by stating explicitly that it is a more appropriate tool to
rely upon than Warren data, acknowledging:

"Basic information concerning cable television system operation is
available from commercial sources such as A.C. Nielson and Warren
Publishing; however, because this information is not subject to the
accuracy and specificity requirements applicable to a governmental
reporting system, the Commission continues to need the information that
FCC Form 325 provides."

While there are always issues with the figures reported to the FCC, we
certainly should not ignore it. Cable operators who report to us on Form
325 must certify that their data is true.[^1] Cable systems that
comprise over 50 million subscribers report to us, or over 75 percent of
the total number of subscribers who report subscriber data to Warren or
Nielsen. This is a large sample by any measure.

Moreover, the Commission's attempt to rely solely on data from Warren
Communications, while disregarding a multitude of other sources, is
troubling. A thorough and transparent analysis of the available data --
both from the FCC and independent sources -- on cable penetration rates
was sorely missing from the initial draft of this item. The Commission
has in its possession at least four sources of cable penetration rates
that were cited in previous reports: Warren, Nielsen, Kagan and FCC Form
325. In blatant contrast to previous reports, no source but Warren was
cited in the initial draft, and it took a majority vote to fix that
deficiency. While not determinative, it is noteworthy that all of these
sources, except Warren, concluded that current cable penetration rates
are less than 70 percent. We also must give careful consideration to new
data, added at the last minute to the report, supplied by leading
consumer advocates finding that penetration rates exceed 70 percent. I
appreciate the efforts of these advocates to advance our understanding
of the marketplace.

Our job of ascertaining the facts was made more difficult because the
draft cherry-picked only the data that justified the outcome desired,
while suppressing other data. I believe that it is our obligation to
ensure that our decisions are objective and based on the facts, not
outcome-driven for political expediency. Much like our media ownership
studies, which are outcome-driven to support the media consolidation
agenda, there was an attempt to cook the books on this report.

Just like what occurred in the media ownership proceeding, where studies
were suppressed, and others were structured and conducted with the goal
of facilitating consolidation, a lack of transparency will undermine the
Commission's credibility and public confidence in the work we do. I
fully support the effort to quickly ask all cable operators for their
actual numbers. We should have done that already. Of course, we already
have data from the vast bulk of cable operators, but if more data would
shed light on this, I think we should pursue it aggressively. If the
data comes back that the 70/70 test has been met, I would not hesitate
to invoke our authority to take positive measures to enhance diversity.

One of the reasons for the embarrassing delay of today's meeting, and
the general disarray in working through these issues, was the effort to
push through such an aggressive number of controversial items today
without sufficient notice to all Commissioners. Short-circuiting
Commission procedures short-changes the American public in the end. This
is particularly true given that nothing we are considering today
requires immediate action. There are numerous items that would have
benefited greatly from more deliberation and care.

This is set against a backdrop of unwinding processes here at the
Commission. For example, the lack of notice to Commissioners about open
meeting dates and items to be considered at these meetings hinders our
ability to consider the substantive proposals and to solicit and reflect
on public input. Traditionally, going back many years, items are white
copied, or identified to Commissioners three weeks in advance so we can
prepare, hold proper meetings with affected parties and deliberate among
ourselves. Not only were we not white copied for this meeting -- the
meeting itself was called with less than three weeks notice. The two and
a half weeks notice was even far less time than even that, because it
included both the Veterans Day and Thanksgiving holidays. It was also
truncated by the day we spent on travel for a field hearing in Seattle,
which was called with inadequate notice to Commissioners and the public.
The problems with the items we consider today were further compounded
because massive changes in some items were attempted to be inserted at
the last minute.

It may be said that we have a host of issues pending before the
Commission and that there is a need to drive our work forward. The
Chairman certainly has the right to set the agenda and push us. But
given that very volume, and the prodigious work which nobody denies we
do given our vast jurisdiction, we need to know in advance which items
to focus upon during the short window before open meetings. This is
especially true when items are large, complex, and controversial.

Some of the policy goals today are admirable, and I share many of the
concerns, for example about cable's market power, that prompted them.
But why the rush? Why the effort to steamroll the Commission and the
public in order to wrap up a number of items that aren't even time
sensitive? Everything could have been done under regular order, with
proper notice or on circulation. The only plausible explanation appears
to be an obsessive drive to complete the media consolidation agenda by
the end of the year, come hell or high water.

But the cover on diversity and localism is a false front. The agenda
that was pushed for today was just a fig leaf, it does not provide real
answers to the very real problems that permeate the media landscape. And
very troubling is the attempt to punish major American companies in the
process of dismantling the newspaper-broadcast cross ownership ban.
Tribune, long a respected and influential institution of American
journalism, has been used as a human shield to provide cover for broader
rule changes, even at risk to the life of the hostage itself. Some may
ask whether the entire cable industry is a foil today to show we are
tough on some big media companies, even as we are forgiving to others.

Were these issues not so important, it might be tempting to admire the
improvisational willingness on display here \-- using every tool
available, abandoning precedent and doing whatever is expedient. But
that doesn't mean that there is no alternative.

I came here to be part of the expert agency \-- to follow the facts
wherever they lead. We cannot cook the books to pursue a political
agenda without dismantling our very institution. We simply must act like
the expert agency Congress intended, and not squander our precious
legacy.

[^1]: The operator must certify: "I HAVE EXAMINED THIS REPORT, AND THAT
    ALL STATEMENTS OF FACT CONTAINED THEREIN ARE TRUE, COMPLETE AND
    CORRECT TO THE BEST OF MY KNOWLEDGE, INFORMATION AND BELIEF, AND ARE
    MADE IN GOOD FAITH." False statement can result in imprisonment for
    up to 5 years.