Pay-TV Firms Say Shopping Channels Shouldn’t Get Low Leased-Access Rates
Pay-TV companies and home shopping channels disagree over whether the channels should get the low leased-access rates soon to be accorded independent programmers. In replies filed Monday to a commission notice, NCTA and Verizon said the FCC should deny the channels the extremely low rates the agency ordered for community groups and others (CD Special Bulletin Nov 27 p2) leasing system capacity, often by the hour, from pay-TV companies. Two home-shopping channels want the same terms. A group of cable overbuilders including RCN and SureWest predicted Friday that NCTA will prevail in a lawsuit against the FCC over rates for independent programmers. So the group asked the agency to put off imposing the 75 percent cut, set to take effect May 31.
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No evidence supports the conclusion that letting shopping channels get independents’ rates will hurt cable operators or cause the channels to give up on carriage deals with the pay-TV companies to lease capacity, the Home Shopping Network said. “The number of direct sales programmers that could migrate is small, and these programmers enjoy substantial benefits through their negotiated carriage agreements,” it said. HSN and Shop NBC said cable companies didn’t show that reduced rates would hurt them. Being denied the rates would violate the channels’ constitutional rights, the companies said. “Some commenters attempt to disparage home shopping content,” Shop NBC said. “Others simply admit they don’t want to have to offer space to new home shopping channels.” No one “offers anything to support the commission’s theory that cable diversity or financial health is threatened,” it said.
Commissioners should hew to a Nov. 27 decision not to extend a new formula for leased access rates to parties mainly airing program-length ads, NCTA said. “A rate significantly below the negotiated rates that shopping channels typically pay for carriage would also artificially encourage a flood of new shopping channels to apply for and fill leased access channels,” it said. The new leased-access rates are near zero, NCTA said. Verizon said section 612 of the Communications Act forbids the agency to issue leased access rules hurting hurt video providers in the wallet. Expanding leased access to home shopping “raises serious First Amendment concerns,” the Bell said.
Pay-TV providers could face a “flood of leased access programming” under the new rules because commissioners slashed maximum prices in the 3-2 decision, said the Broadband Service Providers Association. “The FCC is forcing cable operators to subsidize leased access programming and absorb the losses,” said the overbuilders group. An agency “distinction” between leased access and shopping channels raises no constitutional concerns, the Communications Workers of America, the National Hispanic Media Coalition, the United Church of Christ and the U.S. Public Interest Research Group said: “Commercial speech is entitled to only very circumscribed protection under the First Amendment.”