Video Access Hurdles of MVPDs Big and Small Sought by Cable and Telcos
The FCC ought to examine content access hurdles faced by multichannel video programming distributors big and small, or the deals’ effect on the availability of pay-TV service and prices, said two major MVPDs and five groups representing rural telcos. If the agency is concerned about carriage of regional sports networks, it should look to all types of “must-have” sports programs, Time Warner Cable said. An agency report is due in January on access to RSNs under the 2006 commission order approving the purchase of Adelphia by Comcast and Time Warner Cable. TWC and the rural telco groups’ first-time comments on the RSN proceeding were posted to docket 11-128 Tuesday (http://xrl.us/bmenqf).
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DirecTV came in for scrutiny by Time Warner Cable. The DBS company’s initial comments in the RSN proceeding noted that Time Warner Cable recently created such a network in Los Angeles, and could withhold the programming from rivals or jack up the channel’s prices (CD Sept 13 p6). “In fact, TWC sought to establish its Lakers RSNs in large part to stem the spiraling increases in the cost of carrying sports programming, and its control of that programming will benefit not only TWC’s subscribers, but customers of other MVPDs (including DirecTV) as well,” the cable operator said in its reply comments. “It is ironic, to say the least, that DirecTV, which maintains a nationwide exclusive contract with the NFL for the games shown on Sunday Ticket, would object to TWC’s plans to distribute professional basketball and other sports programming on a non-exclusive basis,” the operator said. “Vertically integrated cable providers’ use of dominant market share to lock up local sports teams has nothing to do with the arms-length contract between the NFL and DirecTV,” a spokesman for the DBS company said, “no matter how many times they say it."
The Big Four broadcast networks can limit access to MVPDs for popular sports programming, said Time Warner Cable, which separately seeks to change retrans rules that benefit the networks. “It would be irrational (and thus arbitrary and capricious) to focus solely on cable-owned RSNs when the major programming conglomerates use their control of sports programming rights held by Big Four broadcast networks and affiliated cable networks, together with owned-and-operated broadcast stations (and, increasingly, independent stations that pay ‘reverse compensation’ to the network), to extract supra-competitive rates from cable subscribers,” the company said. “The Big Four networks and their affiliated cable networks also leverage their control of major sports programming as a means of extracting favorable tier placement and coercing MVPDs to purchase bundled programming services.” Disney’s ABC, CBS, News Corp.’s Fox and NBCUniversal’s NBC networks threaten to withhold sports to boost retrans fees, Time Warner Cable said. An NAB spokesman had no comment.
Cablevision and Verizon traded more filings over the withholding from the telco of the HD versions of two New York RSNs owned by a former business of the cable operator. The telco said the bureau “reaffirmed that important determination just two days ago,” that protections are needed for MVPDs to carry cable-affiliated RSNs, by ruling in favor of Verizon against Cablevision and Madison Square Garden LP (CD Sept 23 p5). “Tellingly, the only commenters to challenge the significance of this programming or the continuing need for protections are two cable incumbents, each with a long history of denying competitors access to this must-have programming,” Verizon said of Cablevision and Comcast on RSNs. “Video providers of all types, including DBS providers, small and rural cable operators, a new video upstart with recent experience seeking regional sports, and AT&T, all agree that regional sports programming remains must-have for consumers, and that there remains a need for protections to prevent abuses by the large cable incumbents with exclusive control over much of this programming.”
The absence of the MSG HD and MSG+ HD networks on AT&T and Verizon’s pay-TV products “does not in any way significantly hinder” those telcos “from being strong and durable competitors in this market, fully able to attract and retain hundreds of thousands of video subscribers,” Cablevision said. “Their success is a testament to the need to eliminate -- rather than perpetuate -- government restrictions on the distribution of RSN programming.” Cablevision noted it lost video subscribers in Q2, “despite its access” to the RSNs MSG has withheld from AT&T and Verizon.
Small telcos want an easier time getting RSN content “under reasonable terms and conditions,” said the Independent Telephone and Telecom Alliance, NTCA, OPASTCO, Rural Independent Competitive Alliance and Western Telecom Alliance, whose 1,000-plus members have more than 23 million customers. The public notice seeking comment on RSNs “references nominal reforms and alterations that have been made to complaint procedures,” yet “these have done little to alleviate the problems encountered even by large MVPDs,” the five groups said. The two years AT&T and Verizon’s complaints were pending before they were resolved last week “demonstrates that the new procedures are time-consuming and expensive,” the groups said. “Small and mid-sized MVPDs lack the resources to engage in this sort of protracted proceeding.”