Small and rural cable operators are shortchanged by broadcasters under FCC rules on retransmission consent, said a group representing the companies. The American Cable Assn. said it will unveil a report Mon. by researcher Gary Arlen that finds “broadcasters’ unrestrained market power, combined with the use of federal regulations and abusive contracting practices, results in higher cable costs.” Arlen declined to comment on the report until it’s released at a media briefing. Some cable operators share the group’s concerns. “We agree with them that it is a problem and it is a network problem,” said Alex Netchvolodoff, vp-public policy for Cox Enterprises. “The networks are abusing retransmission consent by tying the negotiation to the carriage,” he said. TV stations often seek carriage of affiliated networks in negotiations for carriage deals. Broadcasters were mum on the criticism. Officials at ABC, CBS, Fox, NBC and NAB didn’t comment. Retransmission consent will be taken up during the Senate Commerce Committee’s Jan. 31 hearing on video content, a committee spokesman said. The committee will examine access to programming, particularly sports packaged in a way that consumers can access only through certain providers. The America Channel is expected to testify at the hearing, he said. But Stevens won’t decide on a legislative direction until all telecom hearings are completed in mid-March.

Several cable operators are preparing to respond to a query on customer data disclosure from a top Democrat lawmaker. House Judiciary Committee ranking member Conyers (D-Mich.) wrote last week to Internet, phone and cable firms asking whether they had given the govt. access to customer information and if so how and when (CD Jan 25 p5). Cox, among the firms that said Wed. it’s working on a response, said it hasn’t “received any requests for information or wiretap that was not accompanied by a warrant.” Charter said it “does not routinely disclose customer information… Exceptions may include valid legal requests, subpoenas or court orders, and we seek confidential protection where appropriate.” Charter will “cooperate and respond in a timely fashion,” a spokesman said. Officials at Cablevision didn’t return our phone calls.

U.S. cities want to keep control over video franchising, representatives told the FCC ahead of a deadline for comments on a controversial rulemaking. About 30 municipalities have told the Commission they want to the right to review and issue approval for the entry of Verizon’s FiOS fiber TV service and other cable providers’s efforts in that area. Sales of FiOS began Sept. 22 in Tex. Responses to the FCC local franchise inquiry are due Feb. 13, replies March 14. The inquiry seeks comments on the efficiency with which municipalities issue competitive video licenses (CD Nov 21 p6). FCC Chmn. Martin said last week a key 2006 Commission priority is facilitating competitors’ entries into markets with incumbent cable firms (CD Jan 23 p3). As of late Mon. nearly half the franchise filings came from N.C. - probably because regional members of the National Assn. of Telecom Officers & Advisors have been lobbying hard there, Libby Beaty, the group’s exec. dir., told us. She said she hopes the filings so far are just the tip of the iceberg. Her group’s expanding effort includes a form letter officials can sign and send, she said. “I certainly asked and encouraged and pleaded with them to make their own showings as to what they're doing and how they're doing it,” Beaty said. “There’s nothing that can supplant their giving the information to the FCC directly… They have the facts.” Boilerplate that Beaty’s group provided dominates many filings: “Local governments can issue an appropriate local franchise for new entrants into the video services field on a timely basis,” said Redding, Cal., Pennsville, N.J., and Asheboro, N.C., among other cities. But Pennsville and other towns also said they lack ways to offer franchises to firms other than cable operators already serving them. Manatee County, Fla., and other more heavily populated jurisdictions told how they have tried to streamline franchise applications. Manatee County said it was spurred to update its cable rules when Verizon began seeking permission from numerous municipalities to expand its fiber TV service. Verizon and changes in state law “caused Manatee County to recognize that its then-existing cable ordinance was not in the best shape to effectively and efficiently deal with core issues,” it said.

EchoStar and Lifetime, at a carriage impasse, may return to the bargaining table because the DBS firm needs the popular women’s network, said 3 analysts we spoke with. But another analyst said Lifetime stands to the battle between the firms. After talks collapsed, the DBS provider said it would replace Lifetime with another channel by Jan. 31. Lifetime said Sun. that Dish Network had made a “’take it or leave it offer'” that was “unfair and unreasonable.” Yet the network left the door open. “We're always open to entertaining an offer from Dish that is fair,” said a Lifetime spokesman, declining to elaborate.

Family tiers are a good start in addressing indecency concerns, said FCC Comr. Tate, calling the issue “a serious problem.” Tate’s comments to us came late Fri. after Chmn. Martin and Comr. Copps said the tiers may not meet consumer needs because of their limited programming (CD Jan 23 p3). “Voluntary actions by cable and now DBS operators appear to be good first steps toward addressing the concerns of consumers about the content that enters their homes,” said Tate. The commissioner, who started Jan. 3, said she supports parental education steps discussed by former MPAA Pres. Jack Valenti at a Senate decency hearing last week (CD Jan 20 p1). Separately, AT&T responded favorably to comments by Martin on Fri. that facilitating video competition is a key priority for the Commission this year. “Martin understands that accelerating broadband deployment and video choice for consumers are tied together,” said a company spokesman.

Cable family tiers may not meet consumer needs, FCC Chmn. Martin and Comr. Copps said a day after senators carped about the packages’ paucity of sports and other popular content (CD Jan 20 p1). Martin, though less critical than Copps, said he shares some worries voiced Thurs. by Sen. Lautenberg (D.-N.J.) and Va. Republican Sen. Allen and other legislators.

Viacom faces a lawsuit over junk food ads on Nickelodeon, amid concern about links between children’s exposure to such ads and poor eating habits. The Center for Science in the Public Interest (CSPI) is among plaintiffs that the groups said will ask a Mass. court to enjoin Viacom and cereal maker Kellogg from marketing unhealthy food on shows at least 15% of whose viewers are under 8. The suit also aims to stop such advertising on the Internet. It seeks $25 for each incident of what CSPI called “unfair or deceptive advertising.” Nickelodeon said it has embarked on several campaigns to encourage healthier eating habits, worked with groups including the American Heart Assn., and has created 2 shows promoting exercise. The network will continue encouraging advertisers to promote health awareness, she said. Kellogg’s marketing “accurately portrays our products,” said the company official.

Pay TV providers and media activists unveiled a group to press for conditions on Adelphia’s takeover, as had been expected (CD Jan 18 p1). The Competition & Diversity Coalition on the Adelphia Transaction (CADCAT) wants FCC and FTC curbs on the proposed $17.6 billion deal, to prevent Comcast and Time Warner from limiting the availability of local programming such as sports. “Comcast and Time Warner have used their regional market dominance to deny DBS customers irreplaceable hometown sports programming,” said DirecTV’s Susan Eid in a CADCAT statement Wed.: “All competitors [should] have fair market access to local sports.” Time Warner responded that the market for programming is fair. It’s “very robust and competitive and getting more so,” said a company spokeswoman. Customers will benefit from the deal by getting services including VoIP from Time Warner, which isn’t currently available from Adelphia, she said. Adelphia and Comcast had no comment on CADCAT. CADCAT may increase pressure on the FCC to scrutinize Adelphia’s purchase, said one observer. “There is a very realistic possibility that coalitions such as this could lead to conditions being imposed on the deal,” said Progress & Freedom Foundation’s Adam Thierer. However, he said: “For more conditions to be imposed now would be a bit troubling and potentially a tad bit dangerous because it could derail the deal entirely.” He said the family packages recently unveiled by Time Warner and Comcast constitute a “voluntary” condition related to Adelphia at least in his analysis.

Opposition to the proposed takeover of Adelphia cable systems has increased with the formation by pay TV firms and media activists of a group seeking FCC and FTC curbs on the deal. Members of the consortium include DirecTV, EchoStar and RCN, which have previously expressed concern to the FCC about the potential to snuff out competition in the market for programming for local networks. The companies want the FCC to impose a wide array of restrictions on Comcast and Time Warner, seeking Commission approval for the $17.6 billion deal. They want to ensure the 2 largest U.S. cable operators don’t limit the availability of programming.

Microsoft, selling IPTV and cable software, will extend video search in a product Comcast uses, to let customers sort through VoD programs much as archrival Google helps Internet users find specific information. The feature will be part of the next version of Foundation Edition for cable operators in the U.S. and Latin America, said Microsoft’s Ed Graczyk: “It will definitely be ready to be in homes in the early part of this year.”