SBA Support of ACA-Proposed Changes to Program Access Rules Seen as Significant to MVPD Operators
The Office of Advocacy at the Small Business Administration urged the FCC to strengthen protections for small multichannel video programming distributors and revise programming access rules on the heels of Comcast’s plan to pay about $45 billion for Time Warner Cable. SBA backed proposals by the American Cable Association asking the commission to extend program access rules to the National Cable Television Cooperative (NCTC), and to clarify the obligation of cable-affiliated programmers to extend the same volume discounts to buying groups that they do to individual MVPDs. Also last week, NCTC and Viacom almost entered what would have been the co-op’s first blackout of cable channels.
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The SBA advocacy office is raising the concerns of small MVPDs “in light of increasing vertical integration between cable programmers and distributors, including the anticipated acquisition of Time Warner Cable by Comcast/NBCU,” it said in an ex parte filing in docket 12-68 (http://bit.ly/1kxJS1t). Small MVPDs believe the rule excluding NCTC “has effectively rendered the program access rules moot, as they have little choice other than to purchase programming licenses through NCTC agreements,” SBA said. The commission should reexamine whether the requirement that buying groups assume financial liability for their members’ contracts is necessary “given that the market does not demand it, and whether that restriction is statutorily supported under the Cable Act,” it said.
ACA told the FCC that Congress provided for the program access rules to apply to buying groups used by MVPDs (CD Jan 14 p7). However, the exclusion of buying groups like NCTC is a result of flaws in the FCC’s implementing rules that were first drafted more than 20 years ago, ACA said (http://bit.ly/JG8kB4). The changes suggested by ACA would put buying groups on the same competitive footing with large MVPDs by giving them increased leverage in negotiations with cable-affiliated programmers and result in lower prices for small MVPDs, SBA said.
ACA urged the FCC to move forward with modifying program access rules now that SBA has endorsed the action, said the association in a news release Friday (http://bit.ly/1k8MMxK).
The support from SBA is significant, said Robert Gessner, president of MCTV, an NCTC member. The changing landscape, including the Comcast/Time Warner Cable, have sparked the need for the changes, he said. “The Comcast-TWC merger as an entity becomes that much larger and therefore it’s perhaps more tempting for Comcast to sell NBCU programming to itself at a price that’s significantly different than what they would sell to someone else.” There are a significant number of companies that compete directly with Comcast and they will compete with an even larger new Comcast-Time Warner Cable if the deal is approved, he said.
SBA’s support of ACA’s safe-harbor recommendation is key so programmers can’t exclude members from the co-op when it comes to negotiations, Gessner said. “That’s been done in the past. ... Programmers have come to NCTC and said they'll only allow NCTC to negotiate for systems that meet certain size qualifications.”
Given the impact that vertical integration has on small MVPDs’ ability to provide customers with viable alternatives, the advocacy office encourages the FCC to examine “whether the Cable Act gives the FCC authority to adopt the ... proposals to mitigate any anti-competitive behavior that could result from further industry consolidation,” SBA said.