Mediacom Bundling Petition Unlikely to Be Acted On Soon, Industry Observers Say
A Mediacom petition urging the FCC to restrict programmers -- including broadcasters -- from requiring bundling and other concessions during content negotiations may find favor with FCC Chairman Tom Wheeler but is unlikely to be acted on soon, several cable attorneys and industry officials told us in interviews Wednesday. “It would take a very courageous Commission to follow this approach,” said Andrew Schwartzman, senior counselor at Georgetown Law’s Institute for Public Representation. Though Wheeler’s support of rules banning joint retransmission consent negotiations by broadcasters indicates he might agree with some of Mediacom’s points, its petition is likely to be crowded out by the ongoing net neutrality and incentive auction proceedings and the host of large scale mergers facing the commission, numerous industry attorneys told us.
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Mediacom disagrees. Net neutrality and mergers like Comcast/Time Warner Cable that involve content companies are why the petition is timely, said Thomas Larsen, Mediacom vice president-legal and public affairs. The mergers mean that big companies that own content are getting bigger, exacerbating the competitive imbalance for independent cable companies, he said. Programmers who require conditions in contracts that restrict consumer access to content could also be relevant to the commission’s work on open Internet rules, Larsen said.
"These are very timely issues,” said American Cable Association President Matt Polka in an interview. Problems with content negotiations have gotten worse with increasing media consolidation, he said, and have “a direct impact on consumers.” ACA announced its support for the Mediacom petition in a news release Wednesday. The large undertakings on Wheeler’s plate don’t have to get in the way of the Mediacom petition, Polka said. It wouldn’t be out of the ordinary for the FCC to seek comment on the issue and then wait to address it, as it did with the restrictions on joint retrans negotiation, he said. “These situations take time,” he said.
The ongoing merger and net neutrality proceedings at the FCC may also be an opportunity for supporters of the petition, one cable attorney said. The changes requested in the petition could be offered up by Wheeler in exchange for support for new open Internet rules, for instance, the attorney said. However, it’s likely the commission’s authority to impose the new rules would face severe attack from content creators and broadcasters, attorneys told us. That may make it unlikely to be taken up by the commission, they said. “There will be a strong pushback on the question of the Commission’s authority to regulate in the manner suggested,” Schwartzman said.
Some of the rule changes proposed by Mediacom have a better chance than others, said Garvey Schubert cable attorney Bruce Beckner. Although arguments against bundling previously have been made, the competition for content is heavier than ever, and FCC officials could agree with Mediacom that consolidation is making it worse, he said. Programmer policies that limit what tier content can be placed on make it much harder for consumers to adjust the price of their cable bills without dropping the service, Beckner said. Mediacom’s arguments that allowing a la carte pricing and restricting programmers from limiting their tier placement could find purchase at the FCC, he said.
The volume discounts for larger operators are less likely to be the subject of FCC action, Beckner said. “The FCC doesn’t want to get involved in pricing,” he said. Overseeing the prices charged for content could be seen as an overreach for the commission and would likely be difficult for the agency to take on, Beckner said.
The FCC may also be reluctant to address bundling issues with Cablevision’s lawsuit against Viacom (CD Feb. 27/2013 p11) concerning that issue still working its way through the courts, said MoffettNathanson analyst Craig Moffett in an email. The lawsuit, filed in U.S. District Court in Manhattan last year, accuses Viacom of illegally forcing Cablevision to carry and pay for several less-watched networks in order to carry more widely watched networks. A motion by Viacom to have that case dismissed was denied last month, according to court filings.