Networks

FCC's Pending Program Access Item Draws Crowd

Industry Players Make Last Ditch Pitches as Vote Nears 9/27/2012 7:08 AM Eastern

It has been rush hour at the FCC in the past 10 days as the commission prepares to vote on sunsetting the program access rules' ban on exclusive contracts between MVPDs and their co-owned networks.

Following reports that the chairman had circulated such an item last week, FCC officials said they were flooded with requests for meetings, which was confirmed by ex parte notices in the FCC docket. The commission has until Oct. 5 to vote or the rules sunset, though various commission sources said they did not expect a vote this week given that the incentive auction framework notice, scheduled to be voted on Friday (Sept. 28), was occupying a lot of time and attention.

On Monday, more than a dozen representatives of the Sports Fan Coalition, Public Knowledge, DirecTV, Dish, AT&T and Verizon met with staffers at the Media Bureau and general counsel's office asking them to retain the ban in general, and if not, at least for "non-replicable" programming like regional sports networks.

They argued that the legal case for retaining the rules remains strong. According to FCC sources, the chairman's item relies in part on the D. C. federal court of appeals suggestion in denying a Cablevision challenge to the rules that the next time they came up for review -- they sunset Oct. 5 unless the FCC renews them -- the FCC might allow them to sunset if the market continues to be more competitive.

But the groups point out that was dicta -- not part of the official ruling -- and say that even the dissenting judge in the decision conceded that a targeted ban on exclusive contracts for regional programming, like the sports nets, could be justifiable.

The program access order anticipates being able to deal with discriminatory contracts with an existing prohibition on unfair practices (section 628[b]), the same provision it used to close the terrestrial loophole/exemption, through which the exclusivity ban does not apply to terrestrially-delivered networks because the statue referred to "satellite-delivered" programming.

On the same day that group was meeting with bureau staffers, representatives of the National Cable and Telecommunications Association were meeting with aides to a number of commissioners, arguing that the exclusivity ban was ripe for removal given the "robust and irreversible competition that characterizes today's video marketplace." NCTA said the ban needed to go in its entirety, with no carve-out for "supposedly 'must-have' programming."

It pointed to 628(b) as being sufficient to handle complaints on a case-by-case basis, rather than the "prophylactic prohibition" of a ban.

Also making the rounds at the FCC on Sept. 24 was Walter McCormick, head of US Telecom, making his pitch from retaining the ban, tying access to programming to broadband deployment, one of the hottest, hot-button issues at the FCC as it tries to meet the president's goals of universal access.

Cox, in meetings Sept. 21, took the opportunity to reiterate its pitch that the FCC open a proceeding on volume discounts secured by the largest cable operators. While Cox itself is the fifth-largest MVPD, according to Time Warner Cable at number four has almost three times as many subs and Comcast five times as many according to SNL Kagan June figures.

"In today's marketplace, only a very small number of MVPDs receive the largest volume discounts and even companies like Cox, with nearly 5 million basic video subscribers, lack the leverage to obtain comparable deals," the company said.

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