Pay-TV Stakeholders Urge Congress to Revisit Obligations Placed on Different Industries

NCTA pressed Congress to relieve cable operators of rules applied only to them and not to satellite-TV companies -- “rate regulation and ‘must-buy’ requirements,” NCTA said. DBS “providers essentially avoid PEG [public, educational and government access] and leased access obligations; and DBS providers have no statutory obligations to make their affiliated networks available to competing multichannel video programming distributors, NCTA said, stressing that these “cable-specific” provisions are “no longer necessary and cannot be justified." Dish “does not believe that any current laws or regulations inappropriately favor satellite television over cable,” it countered.

“Congress should eliminate Section 623 of the Act, an extraordinarily detailed rate regulation scheme that serves no productive purpose in today’s highly competitive video distribution marketplace, and should make clear that all state and local regulation of rates is preempted,” NCTA said. “Cable rates are effectively constrained by market forces, rendering the complex and burdensome rate regulation scheme unnecessary and placing cable at a distinct disadvantage vis-à-vis its competitors, who are free to innovate and experiment with different pricing approaches.”

The Local Choice proposal “would promote both localism and competition” and Congress should pass it, Dish said, referring to a Senate proposal that died last Congress. The bipartisan leaders of the Senate Commerce Committee had backed this broadcast a la carte proposal but retracted it after immediate lobbying pushback, especially from broadcasters. Senate Commerce Committee Chairman John Thune, R-S.D., was one of Local Choice’s backers and has indicated interest in reviving discussion of it this Congress. Dish and ACA belong to the American Television Alliance, which lobbied heavily for Local Choice during its brief offering last year.

ACA and Dish recommended several changes to how Congress regulates broadcasters. The “public trustee” model of regulation for broadcasters is no longer valid, Dish said. Broadcasters have “exploited” the public trustee model as a form of subsidy and have carried out an “ever expanding strategy of blacking out communities” as a way to get higher retransmission consent fees, Dish said. It criticized what it saw as the lack of a “free market” and the “government-sanctioned monopoly” that broadcasters have in each designated market area. “This lopsided bestowing of privileges without significant public interest benefits must be revisited and rebalanced,” ACA said. Congress must curb broadcaster denial of a pay-TV company’s “right to carry of distant or ‘out-of-market’ signals, ACA said, also opposing must-carry and leased access.

NCTA dwelled less on retrans rules. The association’s membership includes Comcast, which owns NBCUniversal, and is seen as constricted in its ability to lobby on that hot-button issue (see 1408250024). “Retransmission consent stations should not have a government-mandated right to be included in cable operators’ ‘must buy’ basic tier,” NCTA said.

ACA also urged Congress to “regulate down” when considering new entrants. “Congress should give [over-the-top] providers special rights only where they are demonstrably needed to solve particular problems in the market, and none are evident today,” ACA said. The development of online video services serves to “demonstrate that the marketplace is responding to consumer demand for more viewing and platform options for access to video programming,” NCTA said. “While it is appropriate for Congress to monitor these developments, intervention in this robust marketplace would be premature at this time.”

NAB has yet to share its recommendations to Congress but typically has objected to many of these pay-TV industry arguments, defending localism and the current retrans system. AT&T, Comcast, DirecTV and Netflix won't file comments with the House Commerce Committee on video policy overhaul.