U.S. Appeals Court Stops Leased Access Case

6th Circuit Orders FCC To Update Status Every 60 Days

By Ted Hearn -- Multichannel News, 7/29/2008 9:53:00 AM

Washington -- A federal appeals court has stopped the cable industry's legal attack on new leased access rules to accommodate the Federal Communications Commission in the agency's ongoing dispute with the Bush administration's Office of Management and Budget.

Last Friday, the U.S. Court of Appeals for the 6th Circuit in Cincinnati agreed to hold the case “in abeyance.” It also ordered the FCC to update the court every 60 days on the status of its problems with OMB.

The cable industry is appealing FCC rules to regulate the rates that third-party commercial programmers pay to access cable systems. Large cable operators have to set aside 15 percent or channels for leased access programmers.

The National Cable & Telecommunications Association claims on behalf of cable operators that the FCC had imposed a rate structure that produced an illegally low amount of revenue.

In May, the 6th Circuit stayed the FCC's rules. A few weeks ago, OMB refused to approve the FCC implementing regulations, saying the information collection burdens placed on cable operators violated the Paperwork Reduction Act.

In the face of OMB's objections, the FCC filed a motion last week asking for the court case to be suspended while the agency attempted to solve its problems with OMB.

“Perhaps OMB can be persuaded to reconsider its decision,” the FCC said in the three-page motion, which the court granted without commentary.

The FCC adopted the new leased access rules last November on 3-2 vote, with Republican FCC chairman Kevin Martin voting with FCC Democrats Michael Copps and Jonathan Adelstein.

That same majority, the FCC told the 6th Circuit, has the power to override OMB's objection about excessive paperwork burdens on cable operators. Evidently, the Martin-Copps-Adelstein trio isn't ready to brush aside OMB anytime soon.

The 6th Circuit granted the FCC's motion without soliciting input from NCTA or Verizon, which also appealed because the FCC's regulations would apply to its FiOS video programming service.

NCTA declined to comment.