Verizon Appeals FCC’s Leased Access Rules
Joins Cable Companies In Challenging New Rate Formula For Leased Access Programmers
By Ted Hearn -- Multichannel News, 4/9/2008 9:35:00 PM
Washington — Locking arms with the cable industry, Verizon Communications Inc. is going to court to challenge the rock-bottom rates that leased access programmers gained under Federal Communications Commission rules adopted last fall.
Verizon, a traditional telephone company that has signed up about 1 million customers to its FiOS video product, filed its case Tuesday in the U.S. Court of Appeals for the D.C. Circuit, the same venue chosen by the National Cable & Telecommunications Association for its appeal, court records show.
Nevertheless, the case will be heard by the U.S. Court of Appeals for the 6th Circuit in Cincinnati, where the United Church of Christ had filed its appeal. A lottery system is used to select the court when similar cases are filed in multiple courts.
A Verizon spokesman was not immediately available to discuss the substance of the appeal. The case filing system for the D.C. Circuit produced a docket number for Verizon’s appeal in addition to a reference to the Federal Register pages where the FCC’s leased access rules were printed on Feb. 28, 2008.
Federal law allows independent programmers to lease time on cable systems. Large capacity cable operators need to set aside 15% of their channels for such programmers. Last fall, the FCC said it slashed rates by 75% and imposed a 10-cent per month, per-subscriber ceiling nationally.
But NCTA, in asking the FCC to stay the rules pending appeal, submitted statements from Comcast and other cable operators claiming that the FCC’s rate formula would actually yield zero leased access revenue in many parts of the country. The new rates go into effect May 31, 2008 if not stayed beforehand.
Like Comcast Corp. and Time Warner, Verizon is a traditional cable operator covered by the leased access rate regime. AT&T, however, claims that its U-verse video service isn’t a cable service under federal law, meaning it’s exempt not just from leased access rules but also from host of other rules related to cable ownership, carriage of public access channels and local franchising requirements.
FCC chairman Kevin Martin, a Republican, pushed to reduce leased access rates, an effort endorsed by FCC Democrats Michael Copps and Jonathan Adelstein but not by FCC Republicans Deborah Taylor Tate and Robert McDowell.
In its stay request, NCTA argued that “by purposely encouraging a flood of new commercial leased access users, the new rules — and, in particular, the new rate formula — will irreparably harm both cable operators and cable program networks.”
Cable operators are allowed to fill unused leased access channels with their own programming choices.
NCTA asked the FCC to respond to the stay request by April 11. The FCC is unlikely to honor NCTA’s deadline because the agency announced on April 4 that it would accept oppositions to the stay through April 11.
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As a leased access programmer, I''m continually amazed at how the cable giants continue to imply how abused they are in this area of leased access. The true fact is, local programmers, like myself, are good for the cable industry. My company, Positive Media, Inc, produces local programming. We put your next door neighbor on TV and local kids playing ball. This type of programming produces loyalty from cable subscribers, which in turn is a very positive thing for the cable industry. The adjusted rates for leased access channels do not hurt the cable industry, it will help, by encouraging independent programmers to produce local content in their area. In turn it will maintain and decrease ''churn'' in the cable industry.
If the cable industry would embrace leased access programmers, a partnership would simply grow for the betterment of the community,the cable industry and the independent programmer utilizing leased access.
My company operates two leased access channels. The independent cable operator is appreciative of what we do. He understands the loyalty it fosters with his subscribers. Therefore, he understands the value of the independent producer.
On the other hand, the other giant operator, would rather my company not be own, I believe. They would rather produce the local content themselves, the problem with that is our community is so small, they would never expend the resources to produce local content. Why? It boils down to money, they would not be able to generate the revenue to support it.
Local producers can generate the revenue to develop local programming. Local people really do care about local things in their community and they will and do watch.
The new rates are in line with what congress mandated in 1984, which is to have diverse programming independent of the cable operators. Finally, there is now the opportunity to truly accomplish the mandate of congress.
Support the new rates. It is good for everyone.
Chris Folsom - 4/11/2008 7:59:00 AM EDT -
Again, this is a matter where the bully is crying "no fair" when it is forced to play by the rules. Especially ones that it doesn''t set. Here, Verizon wants to have it''s cake and eat it too. It wants to be in the television business and compete with cable comapnies, yet it doesn''t want to be subject to the same regulations that may help smooth out the playing field. Again, it is the independent programmer that suffers. I hope the Commission sees through their games and makes leased access what Congress intended it to be.
Duane J. Polich - 4/10/2008 11:45:00 PM EDT -
I’ve been a serious user of leased access for about 13 years and have or have had airtime on sites literally coast to coast. My sad experience has been that cable management will stand on a stack of bibles to tell a lie when they could more easily simply be honest. I’ve been lied to so many times by cable personnel that I take anything and everything they say with a ‘grain of salt’. Maybe this time NCTA will have a member be truthful and Comcast will show us the example of a zero rate. I suppose maybe this would be true if leased access was placed on a channel in the upper digital tiers where it appears cable allows any programmer to be carried when they don’t have to pay for it.
Charlie Stogner - 4/10/2008 9:36:00 AM EDT
