Carriage-Deals Draft May Help Martin Revisit A La Carte
An FCC notice on cable and broadcast bundling of channels in carriage deals probably gives Chairman Kevin Martin another platform to raise the issue of a la carte, agency and industry officials said. Martin circulated the notice two weeks ago with an eye toward a quick vote on it and a related program access order (CD Aug 24 p2). The notice doesn’t specifically require cable operators, satellite providers and other pay-TV companies to sell channels individually, FCC and industry officials said. But they said that point is indirectly raised because the notice asks whether TV stations and some cable channels can require pay TV providers to carry them with affiliated channels.
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The notice asks whether TV stations and cable channels owned by cable operators must offer channels individually to pay-TV companies, an FCC official said. Taking up a la carte from the viewpoint of program distribution, the notice has implications for whether cable operators should be required to sell channels individually, FCC officials said. Martin’s office has played down a la carte in talking about the rulemaking with other FCC officials and industry lawyers, they said. But many at the FCC and in industry said they consider the notice related to a la carte.
The rulemaking may give Martin entree to a la carte by touching on two hot-button media issues that have long been raised by cable operators and others before the commission. The notice asks about broadcasters’ “tying” permission for cable operators to carry TV stations to deals on cable channels affiliated with the broadcaster, said several FCC sources. The notice suggests that these linkages violate commission retransmission-consent rules under section 325 of the Communications Act, an official said. That part of the notice deals with a petition for inquiry by the American Cable Association, the official said. In 2002, the group asked the FCC to investigate whether “network owners and major affiliate groups” were violating retransmission consent regulations by “tying carriage of a local broadcast signal to carriage of, and payment for, one or more affiliated satellite services.” The FCC hasn’t issued a public notice dealing with the petition, said Ross Lieberman, ACA vice president of government affairs.
The notice also asks whether the owners of cable channels should provide them individually to pay-TV providers, FCC officials said. The rulemaking asks whether section 628 of the Act is violated when a cable network owned by the same company that controls a cable operator seeks pay- TV carriage of several channels, said an official. The notice suggests that the answer is yes, an FCC official said. The questions deal with program access rules, the subject of an order that Martin aims to issue at the same time as the rulemaking, FCC sources said. The program-access order would extend for another five years a ban on withholding access to cable networks affiliated with operators from other pay-TV companies. In circulating the program access order, rulemaking notice and several related media items Aug. 21, Martin said he would place them on the Sept. 11 meeting agenda if commissioners didn’t vote for them on circulation.
The delay in acting on the ACA petition drew skepticism from industry officials and observers about Martin’s intention in circulating the program-access rulemaking. They questioned why the commission waited so long to tackle the matter, unless Martin was using ACA’s petition as a way to discuss a la carte. “The chairman seems to have a monomaniacal obsession with regulating the cable industry,” said the Progress & Freedom Foundation’s Adam Thierer, a frequent critic of media regulation. “It would not surprise me at all if he uses this latest rulemaking to once again advance his a la carte crusade.” Another opponent of content regulation said Martin’s actions have shown that he’s keen on a la carte. “Chairman Martin does still seem anxious to push cable operators towards an a la carte regime using various Commission proceedings,” said Free State Foundation President Randolph May. “In the face of serious free speech concerns, Chairman Martin should back off.”
A longtime a la carte proponent, Martin stumped for it at the Aspen Institute’s annual conference last month. He framed the question as one of consumer choice: Letting parents choose not to get channels with indecent content while helping customers cut monthly cable bills. “If a family must continue to pay for programming even when they object to it, I think there’s little or no incentive for the marketplace or programmers to respond,” said Martin. “Empowering consumers to select the channels that they want to view might be the most important thing the government can do to address concerns about inappropriate content on television today.”