FCC Asks if 19-Year-Old Program Access Complaint Procedures Need Update

The commission proposed a way to get exemptions from any withholding ban that may continue after current program access rules expire Oct. 5, for channels distributed to MVPDs using satellites and owned by programmers affiliated with cable operators. A cable operator that owns such a channel or the network itself could petition for exclusivity to get “prior Commission approval” to strike “an exclusive contract,” the proposal said. The petitioner would have to show the deal “satisfies the factors” in Section 628(c)(4) of the ‘92 law, the rulemaking said: “We seek comment on whether this process is sufficient for addressing those instances where an exclusive contract pertaining to a satellite-delivered, cable-affiliated RSN might serve the public interest.”

The agency proposed RSNs and other must-have programming not exempt from the rules must be made available in HD version and not just standard definition. The commission last year upheld AT&T and Verizon complaints against Cablevision and its former Madison Square Garden programming unit that it must make HD versions of New York RSNs available. Citing a 2010 U.S. Appeals Court decision in the D.C. Circuit upholding most program access revisions allowing the consideration of complaints for channels distributed by means other than satellite, the rulemaking said the FCC thinks a ban on withholding RSN and other must-have content wouldn’t “run afoul of the First Amendment.” It sought comment on that and whether free speech requires “the exclusive contract provision as it exists today to be sunset or relaxed.” The rulemaking asked about three scenarios on keeping the exclusivity ban, letting it sunset or relaxing the rule, as expected (CD March 8 p6).

The grant of exclusivity “would immunize” a contract “from potential complaints alleging a violation of Section 628(b), as well as Section 628(c)(2)(B),” the notice said. On the flip side, it asked about whether once the commission upholds one complaint about non-exempt programming, there'd be a “rebuttable presumption” to uphold other complaints. The item proposed a 45-day opposition and 15-day reply period for requests to exempt programming on a market-by-market basis, and also a 45-day period for other complaints to be responded to. It also asked whether cable operators would keep investing in RSNs if they could be withheld, citing Time Warner Cable’s plan to start this year two such channels in Los Angeles.

The FCC noted the number of cable-affiliated national networks fell 35 percentage points since the program access rules were last extended in 2007, to comprise 14 percent of all 800 U.S. channels distributed by satellite to MVPDs. The portion has fallen by an even larger amount if the channels are excluded when owned by Comcast and its NBCUniversal, which face program access conditions through 2017 under last year’s order approving their combination. The number of cable-affiliated RSNs has risen 72 percent in the past five years to 31, most of which aren’t owned by Comcast or NBCUniversal, the rulemaking noted. NCTA thinks the notice “recognizes that today’s competitive media landscape is nothing like 20 years ago when these restrictions were put in place,” a spokesman said. “It’s long past time for the FCC’s rules to catch up with that reality.”

The FCC said the rules are “largely unchanged” from when they were adopted in 1993, except “certain procedural revisions.” The inclination to uphold other complaints against a channel once one case was made may help remedy the “burdens for litigants and the Commission,” it said (http://xrl.us/bmyz8r). Although some MVPDs have said volume discounts to major distributors that are based on how many subscribers they have are discriminatory, no complaints have been made on that basis, the agency noted. “Do our current program access rules and procedures prevent or discourage the filing of legitimate complaints pertaining to this issue? Is the complaint process too costly and time-consuming with respect to complaints alleging price discrimination?” For allegations that a uniform price hike was anticompetitive, “how can we distinguish” that behavior from “a price increase dictated by the market,” the notice asked.

The American Cable Association and USTelecom said the rulemaking will show program access mandates are needed. “Content remains king, and competition will not be able to thrive if cable companies are allowed to withhold certain essential programming” like RSNs, said USTelecom President Walter McCormick. ACA thinks the item asks “the right questions” on “potentially discriminatory volume discounts,” President Matt Polka said. As with an upcoming video competition report, the rulemaking asked about online video distributors’ impact on the MVPDs and the market for programming. “To the extent that we conclude that competition in the video distribution market and the video programming market is currently sufficient to warrant sunsetting or relaxing the exclusive contract prohibition, how, if at all, should the emergence of a new category of potential competitor that could benefit from the exclusive contract prohibition impact our analysis?” it asked: The “task” under Section 628(c)(5) is to “preserve and protect `competition,’ not competitors.”