Martin Weighs Wholesale Cable Unbundling, Other Video Changes
FCC Chairman Kevin Martin apparently deems it a priority to bar programmers from forcing pay-TV companies to carry multiple networks so they can distribute one they want, said communications lawyers on both sides of the matter. Martin recently signaled in private that he’s weighing a broad order (CD July 10 p2) to ban compelled wholesale bundling, forbid cable operators from withholding their networks from rivals and require cable operators to make quick decisions on whether to carry independent programmers, they said. But the Media Bureau doesn’t seem ready to circulate a draft order, cable lawyers said. The document probably will reflect arguments in recent filings by small cable operators, Free Press and other groups, cable lawyers said.
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Martin told reporters July 11 that nothing was drafted on a so-called wholesale a la carte proposal (CD July 14 p2), and such seems to remain the case, communications lawyers said. As with the Comcast network-management order, any unbundling proposal may rely on statutes cited by Free Press. Bureau officials seem ready to write an order once the chairman gives instructions, communications lawyers said. “As far as I know, no one on the FCC staff is working on an order,” said an FCC spokesman, declining to comment further.
Consumers Union, Free Press and Public Knowledge claim three sections of the Communications Act authorize the FCC to limit tying arrangements. Their July 25 filing said the commission can require, without violating programmers’ First Amendment rights, that all cable channels be sold individually to video providers. The document marked the three groups’ first dip into the issue, said Parul Desai, associate director of the Media Access Project, which represents them. “This helps in promoting diverse and independent programming because this opens up access to hopefully get more diverse and independent programming on cable systems.” An NCTA spokesman couldn’t comment right away.
Martin has suggested he might like each cable network to charge all operators the same per-subscriber fee, said a communications lawyer. A cable channel could set a price but not vary it among video providers. Martin seems to want to muster support among pay-TV companies and others for such a plan, discussed in a July 17 American Cable Association filing to the FCC, the lawyer said. Nationwide pricing would “eliminate all tying and require programming and broadcast channels to be sold at non-discriminatory wholesale prices,” the filing said. “This filing makes it absolutely clear that Congress intended the FCC to have the authority to address the abusive wholesale practices of programmers and broadcasters in the ways ACA proposed” in January, said Ross Lieberman, vice president of government affairs. “The issue is no longer whether the FCC can act, but what’s the best way for them to do so to provide consumers with more choice and value.”
Martin may empathize with small cable operators feeling beset by raw deals, said an advocate of requiring cable operators to sell channels individually. The FCC “clearly has the authority to rectify those situations,” Parents Television Council Policy Director Dan Isett said. “I'm certainly hopeful that the FCC is going to take this up, particularly now that we're past the seemingly terminable XM- Sirius debate. I think this is something that absolutely the commission should address.” Pay-TV companies face steep increases in cable and broadcast channel prices, industry lawyers said.
Martin has asked foes of the so-called terrestrial loophole to endorse channel unbundling, communications lawyers said. The loophole lets cable operators withhold programming from others if it’s not sent over satellite. The chairman suggested that he supports closing the loophole as part of a broader order, the lawyers said. Martin also signaled that he may include in the draft order a mandate that cable operators decide within a set amount of time, perhaps 30 or 60 days, on independent programmers’ distribution requests, they said. Martin is thought to view the matters as linked because they deal with program access, the lawyers said. Last week, executives of AT&T, DirecTV, RCN, USTelecom and others urged that Martin close the terrestrial loophole, an ex parte showed. Verizon said July 17 that the regulator should forbid cable operators from withholding terrestrially-distributed HD feeds of their channels from other pay-TV companies.