Cable Buying Group Rules Changes Seen in the Works at FCC
The FCC Media Bureau has put together a draft order that would let the National Cable TV Cooperative (NCTC) file complaints, American Cable Association President Matt Polka told us Monday as the FCC hosted the second of two workshops on the state of the video market. ACA had sought such an order (see 1507020018) to help small multichannel video programming distributors gain some leverage in negotiations with major programmers. The workshops, plus the FCC's now-closed notice of inquiry into the challenges for independent and diverse programmers, could help push the agency on such issues before it as a buying group rule change and its current NPRM looking at changes to retransmission consent rules, Polka said. The FCC didn't comment.
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Commissioner Mignon Clyburn, who spearheaded the indie programming NOI, told us the agency now "is in review mode," going over the filings and other submissions. "I'm not sure what the proper answer is," she said, saying there are also questions about what authority the FCC has. Clyburn also said she plans to ask broadcasters about the ATSC 3.0 broadcast standard and whether they plan to use the extra capacity to carry more diverse programming.
Panelists Monday repeatedly criticized the power wielded by large programmers and major MVPDs, especially in the form of contracts on alternative distribution methods (ADM) and containing most-favored-nation (MFN) clauses and requiring bundling of programming. Tasneem Chipty, Analysis Group managing principal, said ADMs and MFNs also could have pro-competitive benefits -- MFNs for example reducing incentives for holdouts or delays in negotiations. Bundling eats up MVPD bandwidth and financial resources, leaving less money or channel space for indie programmers, said NCTC Executive Vice President-Programming Judy Meyka. Given the double-digit percentage increases Atlantic Broadband has seen in programming costs in each of the past three years, "there's absolutely no room to spend another discretionary penny" on indie programming, said Vice President-Programming Heather McCallion. Any FCC tackling of bundling issues would have to be paired with the sister requirement by programmers that their content be carried on the most widely viewed packages, said Nex-Tech CEO Jimmy Todd.
Some indie programmers were skeptical of bandwidth shortage claims. "Bandwidth is the one thing you can't challenge," said Africa Channel Creative Director Brian Newton. Asked about a quota system, where MVPDs would be required to provide some space for indie programmers, he said any such approach would have to be paired with the FCC also requiring a certain level of penetration within key markets. A similar question, raised earlier with small MVPDs, was briefly met with quiet, and then opposition. "I don't have all the answers, but nobody should get a free ride," Meyka said.
Much of the discussion involved whether over-the-top video could be a viable distribution alternative for indie programmers. "It should not be seen as a panacea," said Blqbox Digital CEO Eric Easter. He said that problems with the OTT market include the lack of capital to sustain growth while building an audience and the lack of standardization across different viewing devices. Warning that the OTT market could within a couple of years be as exclusionary to indie programmers as the traditional MVPD market is now, Easter said the FCC "needs to seriously begin monitoring this market as well."