Telcos Aren’t Likely to Get Action Soon on Withheld Cable Channels
The FCC is unlikely to act soon on renewed requests by AT&T and Verizon this week and last (CD June 3 p11) to bar cable companies from withholding access to their sports channels, said commission and industry officials. Commissioners Jonathan Adelstein and Robert McDowell haven’t asked acting Chairman Michael Copps to approve drafting an order, they said. That work probably won’t start while Copps heads the FCC, since it isn’t a consensus issue and the commissioners don’t consider it urgent, they said. But telco executives said they're optimistic of eventual action.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
McDowell isn’t sure the FCC can narrow the so-called terrestrial loophole, which lets cable operators keep for themselves programming they own but don’t transmit using satellite capacity, said commissioners and industry officials. An FCC spokesman declined to comment.
An appeals court ruling in the FCC’s favor raised hopes among some supporters of closing the terrestrial loophole (CD May 27 p2) that a new order could be based on the section of the Communications Act whose earlier use was upheld, said commission and industry officials. But there’s no move afoot at the commission to use the section, 628(b), they said. “It’s a statutory matter and this commission is unlikely to undo a statutory provision,” a cable lawyer said.
An FCC with five members might take interest in Cablevision’s keeping HD sports channels in New York from Verizon and Cox Communications’ withholding from AT&T a San Diego channel that carries Padres baseball games, said a lawyer representing cable companies and telcos. Even so, the FCC may defer to Congress, said that lawyer and others. “Even with a reconstituted FCC, that would be an uphill battle for” telcos to get what they seek, the lawyer said. Representatives of AT&T, Cablevision, Cox and the NCTA declined to comment. The MSG channel, whose HD stream Verizon said Cablevision won’t let it carry, “complies fully with federal regulations,” said an MSG Network spokesman.
“It would be overstating the case to say there’s momentum” at the FCC on the sports programming issue, because “things at the FCC are in a holding pattern right now,” Verizon Executive Vice President Tom Tauke told reporters Thursday. But there appears to be interest at the FCC and in Congress, he said. “We hope that by shining a little spotlight on a few of the issues we have with one of our friends in the state of New York, that maybe we could get a little movement.”
There’s little pressure on the FCC to act, an industry source said. The commission has settled AT&T’s complaint against Cox, so the FCC has no deadline hanging over it, the person said. But program access is a widespread, continuing problem, and if another company files a complaint, the FCC will be required to act within five months, the person said.
Program access is a “very big issue” for the rural incumbent carriers of the Organization for the Promotion & Advancement of Small Telephone Companies, said Steve Pastorkovich, an analyst for the group. Most of OPASTCO’s members sell video service, using coaxial cable, satellite and increasingly IPTV, he said in an interview. Not having local sports cripples a company’s business case, he said. Verizon seems to be “on the right track” with its arguments, and the commission should have the authority to make the proposed changes, he said.
The National Telecommunications Cooperative Association supports the AT&T and Verizon argument, a spokeswoman said. “We are hopeful it will gain traction at the FCC, because it [is] putting small providers and rural consumers at a distinct disadvantage. NTCA and others had recommended the FCC address this issue during the [Kevin] Martin regime, but nothing came of it.” The topic was raised in NTCA committee meetings this week, she added.
“Anything we can do to alleviate the … monopolistic leverage” of cable companies is “helpful,” said Keith Galitz, president of NTCA member Canby Telcom. Access to regional sports programing has become a “huge problem” for rural ILECs, which can’t always afford to buy cable-owned sports channels, he said. Two years ago the Portland Trail Blazers moved from a broadcast channel to sign an exclusive deal with Comcast, he said. Canby didn’t buy the channel right away, because the cost was high and the company wasn’t allowed to place local sports programming on a premium sports tier, he said. But high demand from consumers eventually forced the company to pay up, he said.
Galitz predicted that the FCC will take a closer look at the matter when the commission’s membership is filled out. It’s an issue the FCC may commission be able to ignore, because it’s receiving “more and more public outcry” from consumers who want more choice, he said.
Verizon and AT&T may also have midsized incumbent carriers on their side. “Nondiscriminatory access to content is important” for video-selling members of the Independent Telephone & Telecommunications Alliance, said President Curt Stamp.
Competitive local carriers probably won’t get involved, said a lawyer for the company. “Most CLECs do not provide video programming and are therefore unlikely to take a position on this issue.”