Program-Access Order Changes Include Standstill Provision
Three changes in a draft FCC Media Bureau program access order (CD Jan 13 p9) that’s scheduled to be voted on Wednesday are being considered by FCC members, and further tweaks are possible, commission officials said. An unexpected change was the addition of a standstill provision to the order, whose first draft was circulated Dec. 16, they said. The provision would allow pay-TV companies whose contracts with a cable-affiliated programmer expire to ask the commission to order carriage to continue while a complaint is being handled, FCC officials said.
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The standstill provision would apply to all program- access disputes, not just those that are the subject of the draft order, a commission official said. It would allow a competing pay-TV provider such as a telco or direct broadcast satellite company to carry during programming disputes content that they had acquired by contract, FCC officials said. It would presumably apply only to channels owned by or affiliated with cable operators and so subject to program- access sharing rules, an official said. The original draft Media Bureau order expanded the range of cases in which channels affiliated with cable operators and not distributed by satellites - and therefore subject to the terrestrial exemption -- would need to be shared with other pay-TV providers for complaints to the FCC to succeed.
The other two changes to the draft item circulated late Tuesday deal with the types of situations in which cable competitors can complain to the commission that they may be losing subscribers because programming has been withheld. One change adds a presumption in favor of complaints seeking regional sports networks, commission officials said. The other stated programming that’s easily replicated, such as local news channels, is unlikely to be the subject of a successful complaint, they said. Both changes had been expected (CD Jan 8 p4). A bureau spokeswoman declined to comment.
Some commissioners haven’t decided whether they believe the FCC has statutory authority to change program access rules in the ways proposed in the first draft and the additions, commission officials said. Changes in the order are still “evolving,” some commission officials said. Lobbying for and against the proposed order continued this week before the commission late Wednesday issued a Sunshine Notice for its meeting next week, a review of filings in docket 07-198 shows.
The revisions seem to offer something for many who lobbied on the order, said analyst David Kaut of Stifel Nicolaus, who hadn’t seen the revisions. Bright House Networks and Time Warner Cable had sought a news exemption. Verizon, USTelecom and others had sought the inclusion of regional sports networks. A standstill provision was sought by the Coalition for Competitive Access to Content, whose members include AT&T and DirecTV. Cable operators including Cablevision, Comcast, Cox Communications and Time Warner Cable have opposed part or all of the proposed order. An NCTA spokesman declined to comment. He pointed to the group’s ex parte filing on a meeting Wednesday between CEO Kyle McSlarrow and aides to FCC Chairman Julius Genachowski where the Communications Act was discussed.
“Section 628(b) does not provide the FCC with authority to require cable operators to share terrestrially-delivered programming,” McSlarrow wrote. “Even if the FCC were to reinterpret Section 628(b) to reach terrestrially-delivered programming, I stated that in a competitive marketplace, public policy decisions should encourage marketplace participants to differentiate their consumer offerings by, for example, investing in and offering local programming.” Cases where cable operators allegedly withheld RSNs are “highly fact specific,” he said. “There would be no basis for the FCC to presume that any withholding means that a competitor would be ’significantly hindered’ wherever it cannot carry a particular RSN.” Chief of Staff Edward Lazarus and three other Genachowski aides attended.
“From our perspective, sports is the big one I sense from DBS, the overbuilders, the telcos” in terms of programming they seek access to in this proceeding, Kaut said. The reported changes also would take up some of cable’s qualms about having to share local news, he said. “You can’t replicate the San Diego Padres,” carriage of whose games are the subject of an AT&T complaint against Cox, he said. “That’s going to be harder for the other guys. … So that’s a justification they can use.”
The order will be approved by a majority of FCC members, predicted analyst Paul Gallant of Washington Research Group, who also hasn’t seen the draft order. “It supports cable competition, but it definitely would be an aggressive legal step by the commission,” he said. “Case by case analysis is at least a modest improvement for cable over simply closing the loophole. But it’s still probably going to end up in court.”