FCC Looks to Revive Leased Access Rules

Seeks Public Comment on Pair of Proposals

By Ted Hearn -- Multichannel News, 9/10/2008 5:20:00 PM

Washington—The Federal Communications Commission on Wednesday took the first step toward revising cable leased access rules in response to objections raised by the budget arm of the Bush administration.

The national media and communications regulator decided to seek public comment on two proposals by the Media Access Project, a public interest law firm representing the United Church of Christ's Office of Communication.

In an Aug. 26 filing, MAP asked the FCC to exercise its authority and overrule the Office of Management and Budget, which refused to approve the FCC's implementation of regulations for the new cable leased access rules, particularly the vast information collection requirements.

OMB, which is under direct White House control, said the FCC's data collection burden placed on cable operators violated the Paperwork Reduction Act, a law designed to reduce bureaucratic red tape on regulated entities, especially small business.

MAP also urged the FCC to revise its rate formula to address cable's objections that lease access programmers could get on cable systems by paying nothing.

The FCC is accepting initial public comments until Sept. 24 and subsequent responses by Oct. 1.

Under federal law, large-capacity cable operators have to lease up to 15% of their channels to third party commercial programmers at rates set by the FCC. Leased access has struggled and channels have gone unused largely because cable's business model is based on cable operators paying programmers for content.

The FCC adopted new leased access rates in November 2007. The U.S. Court of Appeals for the 6th Circuit in Cincinnati blocked them, temporarily persuaded by the cable industry that the FCC's rates were too low and violated the statutory provision that the FCC should not "adversely affect the operation, financial condition, or market development" of cable systems.

After OMB's refusal, the FCC asked the 6th Circuit to hold the entire case in abeyance, a request the court granted.

Meanwhile, the National Cable & Telecommunications Association on Sept. 5 asked the FCC to reject MAP's request that the FCC move forward with overturning OMB's objections.

"OMB has made clear that the [FCC] failed to take steps necessary to minimize the burdens imposed by its information collection requirements. The [FCC] has never voted to override OMB disapproval under such circumstances and it should not do so now," NCTA said.

NCTA also said that the FCC is required procedurally to open a rulemaking, with proper public notice in comment, if it wants to alter the leased access rate formula.

"This is a mechanism available to [MAP/UCC] if it wishes to seek a change to the rate formula," NCTA said.