Order On Program Access Terrestrial Exemption To Circulate
As expected, a draft order addressing the terrestrial exemption to the FCC’s program access rules is to be circulated among the commissioners Wednesday, an FCC official said (CD Nov 23 p3). The exemption has allowed pay-TV distributors who own programming networks to withhold them from distributors if the programming never touches a satellite. The order is not expected to eliminate the exemption outright, pay-TV industry lawyers said.
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Instead, the order drafted by the Media Bureau may set up a competition test on a market-by-market basis in which the competitive harm from withholding the programming is weighed; if a certain threshold is met, then the cable operator must make the network available, the lawyers said. An FCC spokeswoman declined to comment.
Lawyers from RCN, AT&T, Knology, SureWest, USTelecom, DirecTV and OPASTCO met with advisers to FCC Chairman Julius Genachowski, Commissioner Michael Copps and Media Bureau staff to push for ending the exemption, ex parte filings show. They argued that the FCC has clear legal authority to act in the case under Section 628(b) of the Communications Act, the notice said. The same provision was the basis for the FCC’s multiple dwelling unit order and was sustained by a federal appeals court, they said. “Effective rules need to be in place to address ongoing loophole issues rather than deal with them piecemeal through merger and acquisition review process,” they told an aide to Commissioner Copps.
Comcast’s regional sports network in Philadelphia is the highest profile example of a network that operates under the exemption, industry lawyers said. Comcast’s other terrestrially delivered networks are subject to conditions of the Adelphia Merger Order, requiring Comcast to make them available to competitors. Industry executives we asked couldn’t say how many cable-owned, terrestrially delivered networks could be affected by the order.
“Consumers shouldn’t be forced to stick with their incumbent cable provider in order to have access to their local teams’ game or to watch those games in high definition,” said a Verizon spokesman. But an NCTA spokesman said “exclusivity allows competing providers to invest in new services that have dramatically changed the marketplace, as can be witnessed by DirecTV’s overwhelming success with the NFL Sunday Ticket.”