Diverse Programming NPRM Seen Likely Passing 3-2
Numerous parties interested in the diverse programming NPRM on the FCC's Thursday agenda tell us they expect a 3-2 vote along party lines. Republican Commissioners Ajit Pai and Mike O'Rielly seemingly don't think the agency has the authority to set new rules limiting most-favored-nation (MFN) and alternative distribution method provisions in program carriage agreements -- the focus of the NPRM (see 1609080083), one person who has been in multiple ex parte meetings with eighth-floor staff told us.
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Pai and O'Rielly don't seem to have put a huge focus on the item, given the higher-profile set-top box order (see 1609270048) on the same agenda, but it will be interesting to see what their statements on the notice will be, said another person who has been in a number of ex parte meetings on the topic. Likely one or both will dissent from its tentative conclusions because of their general inclinations against activist rulemaking, that person told us. But Pai seems sympathetic to the challenges diverse independent programmers face, though whether that will translate into a "yes" vote isn't clear, said one lawyer who has taken part in meetings on the NPRM. O'Rielly's office didn't comment Tuesday. Pai's office in a statement said, "We hope that a bipartisan compromise can be reached on this item, and if that doesn’t materialize, it won’t be due to a lack of effort on our part.”
The diverse programming issue is of particular interest to Commissioner Mignon Clyburn, who spearheaded the independent and diverse programming notice of inquiry earlier this year (see 1602180044). Multiple people said the item is seen to have her support. Meanwhile, Commissioner Jessica Rosenworcel seems to be willing to let the rulemaking play out and see what proposals come of it, one person who has met a Rosenworcel aide said.
The NPRM has a particular focus on unconditional MFN contractual provisions, the FCC said (see 1609090043). The proposal likely would do away with unconditional MFNs, said the lawyer who has been part of ex parte meetings. The NPRM also will ask some hard questions about bundling, but not include any proposed changes, the lawyer said. Another person who has been in meetings on the NPRM said there also might be questions asked in the NPRM about "set asides" -- multichannel video programing distributors favoring content from their affiliated production companies.
If the FCC restricted the use of unconditional MFNs aimed at other MVPDs, small cable operators and indie programmers "would have a much easier time entering into carriage agreements," American Cable Association President Matt Polka said. "In combination with limiting large programmers’ ability to force small cable operators to carry unwanted programming (which would free up limited channel capacity on cable systems), constraining unconditional MFNs employed against other MVPDs would help independent programmers gain access to MVPD customers."
Diverse programming has been an add-on topic for some parties talking to the FCC. President Genny Morelli said ITTA has had several meetings with eighth-floor staff about set-tops and decided to put in some time on the NPRM while there.