Bureau’s RSN Review Doesn’t Assess Market; McDowell Criticizes MVPD Report Tardiness

The bureau said the agency expects to consider the delivery of regional sports channels in an upcoming MVPD competition report, which the Telecom Act requires the agency to do yearly for Congress but which is years behind schedule. That continued delay drew criticism during our interview last week with Commissioner Robert McDowell. A bureau spokeswoman declined to comment.

Expiring program access rules also will be dealt with later. A bar on exclusive contracts between channels that are owned by cable operators and those carriers for programming that’s distributed to MVPDs using satellites expires Oct. 5, the bureau noted. “In its 2007 Program Access Order, the Commission indicated that it would conduct a review of its exclusive contract prohibition during the year before its expiration to determine if the rule is still needed to protect competition and diversity in the distribution of video programming,” the report said. “The Commission therefore plans to issue a notice of proposed rulemaking on this matter shortly.”

The RSN report dwelled on policy developments at the commission in program carriage and access to that type of content since 2006. That’s when the order approving the approximately $17 billion purchase of Adelphia cable systems by Comcast and Time Warner Cable required the acquirers to follow certain rules at their RSNs. Since the deal, Time Warner Cable has gotten an attributable ownership stake in 16 RSNs, up from two some five years ago, according to the bureau’s report. It noted that the company also recently began another RSN in Hawaii. Comcast faces additional RSN rules because of conditions it agreed to last year to get approval for its purchase of control in NBCUniversal, the bureau noted. The curbs from the Adelphia deal expire in six months. Comcast, Time Warner Cable and the NCTA had no comment.

Some RSN access rules from the Adelphia order have been imposed on all cable operators in the years since the deal because of other commission actions, Friday’s bureau report noted (http://xrl.us/bmnyft). It said program access rules setting a rebuttable presumption for cable operators to answer complaints of RSN withholding by pay-TV rivals came in 2010, while program carriage rules last year adjusted rules for programmers contending they were discriminated against in carriage decisions by MVPDs who favored their affiliated channels. “A brief survey of the developments since the adoption of the Adelphia Order demonstrates that the market for regional sports programming as well as the regulations affecting it have evolved substantially in that time.” But MVPD and other officials who read the report said it didn’t say much about what those developments were, aside from what the commission did.

The commission has done a disservice by being so behind schedule in issuing the annual video competition reports, McDowell told us. The last report was released in January 2009 by Kevin Martin on his last business day as chairman. It covered the 52 weeks through June 30, 2006.

"We are charted by Congress to look at these issues in an annual report” on video competition, McDowell said of those reports to Capitol Hill. “And we haven’t done that” since the report was approved by commissioners in late 2007 and released more than a year later, “and it is now 2012,” he continued. “That is just bureaucratic malpractice.” The report is at http://xrl.us/bmnyj5.

The RSN report was quite bare bones, and comes as the commission hasn’t done enough to address video competition and programming access issues, MVPD and public-interest group officials told us. “It is kind of a rote recitation of some business transactions that have occurred and some regulations” that were put into place in the past five years, said NTCA Director Steven Pastorkovich. “But it doesn’t really address the issues.” The group was “hopeful that the larger marketplace issues would have received some more attention in this report,” he said. “We remain hopeful that the commission will address some of these issues” that “it always moves to another docket down the line,” he said: It’s “a pattern that we'd like to see changed."

For DirecTV, the report “clearly underscores the importance of ensuring that RSN programming is fairly and fully accessible to all providers,” a spokesman said. He noted the commission has pledged to release a rulemaking notice about extending program access rules’ ban “on exclusive cable deals in the very near future.” Dish and other MVPDs and telcos who commented to the FCC on its preparation of the report (CD Sept 13 p6) had no comment. Nonprofit groups that advocate for consumers all sat out those comments, because they were busy on other issues, said representatives including Media Access Project Senior Vice President Andrew Schwartzman.

It’s high time the commission addressed problems in access to RSN and other cable programming that pay-TV subscribers consider must-have, said Pastorkovich and Consumer Federation of America Research Director Mark Cooper. Cooper said the agency “should have solved this problem long since, but they just keep pushing it off.” Difficulties getting must-have programming “is one of a host of problems that exist in this space,” while the last video competition report is “getting old,” he said. “The basic problems that affect consumers, like whether they can see their sports teams, have not been resolved,” Cooper said: Competition among MVPDs “is not going to be the answer” alone.

Competition that’s cropped up in recent years from online video to TV stations and cable operators also is “very relevant” to the commission’s work, McDowell said. “Think of what percentage of consumers are watching video on their mobile devices” now versus several years ago, he said: “That does speak to the whole spectrum scarcity argument,” McDowell continued. “To the consumer, what’s the difference” between video transmitted by a broadcaster, a pay-TV provider or online, he asked.