Don’t Fix What’s Not Broken, FCC Told of TV, Cable Market
The FCC shouldn’t fix what’s isn’t broken by redefining more narrowly which deals can be offered by TV stations and cable networks for carriage on multichannel video programming distributors, said broadcasters, large cable operators and programmers. Disputing claims by the American Cable Association and others, the NAB’s reply to an FCC rulemaking notice said TV stations never require pay-TV companies to carry affiliated channels so they can show the broadcast signals.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The commission should ignore arguments by AT&T, DirecTV, Verizon and others that the FCC has the authority to expand to shows distributed terrestrially a ban on exclusive deals for cable programming delivered by satellite, Comcast said. Many communications executives see the notice on whether the FCC can restrict such tying and bundling arrangements as a way for Chairman Kevin Martin to require a la carte in wholesaling. But the chairman and other FCC officials have said that conclusion hasn’t been reached.
The FCC should close the so-called terrestrial loophole that Comcast argues to keep, said filings by the ACA and a coalition representing AT&T, DirecTV, Embarq, USTelecom and others. The commission has authority under section 628(b) of the 1934 Communications Act and section 706 of the 1996 Telecom Act to bar cable operators from keeping from rivals programming that they distribute by their own systems, said the Coalition for Competitive Access to Content. Cable channels use commercial satellites to send programming over long distances to pay-TV providers. Cable operators use their own wireline video systems to distribute exclusive content.
By voting 5-0 in 2007 to extend by five years a ban on exclusive programming distributed by satellite, commissioners recognized that popular programming should be available to all pay-TV providers, the coalition said. Foes of expanding the ban “are no more persuasive in this proceeding than they were when [they] used to argue against the recent extension,” it added. “Examples of denied access to content, where access is not protected, constitutes clear evidence of what would occur regularly absent such prohibitions on exclusive contracts.”
Backers of an exclusivity ban on terrestrial programming misstate section 628(b)’s meaning -- and neither it nor any other law authorizes the FCC to expand program access rules, Comcast said. “The commission has repeatedly ruled that section 628 does not apply to terrestrially-delivered programming, and there is no basis for the commission to reverse its long-standing position.” The FCC lacks authority to require programmers to keep sending programming to pay TV companies during carriage disputes, as the ACA and others want, the cable operator said. “The reason is clear: The commission only has authority to impose remedies only after the conclusion of an adjudication in which it finds that a programmer has violated the rules.” The NCTA didn’t file reply comments under the notice, a spokesman said.
The ACA wants the FCC to require programmers to deliver channels to pay-TV services during carriage disputes. “When a smaller cable system is involved, the threat of temporary withdrawal of a must have channel overwhelmingly skews a negotiation in favor of the programmer or broadcaster,” the group said. The commission should ignore calls by “media conglomerates, programmers and broadcasters” to leave its rules alone, so they can continue to force pay-TV companies that want to buy any channels to buy many channels, it said. Such “’take it or leave it'” offers are “rife,” it said. “Broadcast licensees are exploiting their market power to extract fees from smaller distributors up to twenty times higher than paid by larger MVPDs,” the ACA said. “Programmers and broadcasters insist that any change to the wholesale status quo threatens a range of awful outcomes” -- but that’s not so, said the group.
The ACA and others misuse a “narrow inquiry” by the FCC to raise a host of unrelated issues, the NAB said. The agency never has found that a broadcaster broke retransmission consent rules by not bargaining in good faith, the NAB said. “Extensive empirical evidence demonstrates that MVPDs are not compelled by ’tying’ or in any other way to carry particular program services and that individual MVPDs are free to negotiate for only those channels” they want. The NAB said less than 10 percent of U.S. cable systems carry all cable networks sold by Disney, Fox, NBC Universal, Scripps, Trinity Broadcasting or Univision. Four percent of systems carry all of Disney’s 11 networks, the NAB said. “The data lead to the only obvious conclusion: Broadcasters do not coerce MVPDs, including small cable operators, to take bundles of cable networks, together with broadcast stations.”