Draft FCC Video Withholding Order Has No Single Test
A draft order narrowing the cases when cable-affiliated channels can be withheld from pay-TV providers offers no single test to determine when competitive harm has been caused, FCC officials said. They said the item instead provided several examples of ways cable competitors can show that channels’ being withheld has harmed them, so they can gain access to programming exempted from mandatory sharing under what’s called the terrestrial loophole. The order, drafted by the Media Bureau, was circulated to commissioners Wednesday, as expected (CD Dec 15 p8).
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.
The order isn’t framed as promoting broadband access, but it does mention high-speed service and how video is often sold along with Internet access and phone connections, a commission official said. The item mentioned FCC orders that have found the provision of triple-play service increases broadband deployment, the person said.
The order applies to cable-owned programming that’s distributed without using satellites and that’s withheld from other pay-TV companies. For the FCC to require access to a channel like that, a complainant must show that lacking the programming significantly reduces its ability to compete with a cable operator, commission officials said. The harm that must be shown is the inability to attract a customer in the market where the cable incumbent or its affiliated programmer withholds access to the channel, they said.
The order could be set for a vote at the Jan. 20 FCC meeting, Chairman Julius Genachowski’s office has indicated to others at the commission, an FCC official said. But the chairman doesn’t seem to have decided when the vote will be, the person said. A commission spokesman declined to comment.
The draft offered examples of how pay-TV companies can show they've been harmed by the withholding of channels, FCC officials said. A complainant could submit a regression analysis to show it’s affected, they said. Or it could file with the commission survey results showing that viewers in a market won’t buy pay-TV service from the company unless it carries the channel, they said. The draft allows other, unspecified proof of harm also to be submitted, according to the officials.
The lack of a numerical test for competitive harm makes the draft somewhat vague, commission officials said. Showings of harm are meant to be fleshed out in each case for each market, they said. That may help the FCC defend the order against any court appeal that the commission didn’t exceed its authority under Section 628 of the Telecom Act, because the terrestrial loophole wasn’t eliminated, they said. Spokesmen for the American Cable Association and the NCTA declined to comment on the draft.
The draft gives telcos that have filed complaints time to submit supplemental materials showing harm as suggested by the order, a commission official said. The complaints are by AT&T and Verizon against Cablevision and by AT&T against Cox Communications, the person said. The cable operators would get time to rebut any new filings of this kind, the person said.