News

FCC Approves Program Carriage Standstill: Sources

7/29/2011 2:59 PM Eastern

The Federal Communications Commission has finally voted out its program carriage order, which provides for granting interim carriage during the adjudication of cable-network program-carriage complaints, or true-up payments for nets that have never been carried, and sets deadlines for dealing with those matters.

Such a mechanism currently does not exist, and it can take years for complaints to grind through the regulatory sausage-making process.

The order also better defines what type of complaints are, or are not, likely to have merit, and setting up shot clocks for FCC action.

The decision is expected to be announced either late Friday or Monday.

The Democrats all supported the order, while Republican commissioner Robert McDowell has dissented in part, due to the opposition of the standstill agreement aspect.

The Democrats voted the item weeks ago, but McDowell had held off, getting an extension on his vote until today, Friday July 29, after which it would simply have been considered adopted without him. In addition to his issues with the standstill, McDowell also wanted to give those who shared his concerns, like some cable operators, more time to discuss it with the chairman.

According to an FCC source familiar with the order, the standstill provision is not retroactive and would not apply to the Tennis Channel and Bloomberg program carriage complaints, both against Comcast, even if they were not ruled on until after the rules took effect and either were decided in favor of the plaintiff.

As reported in Multichannel News back in May, the item sets up a regime for granting interim carriage during the adjudication of MVPD program-carriage complaints, and sets deadlines for dealing with those complaints.

The item combines an order and a Notice of Proposed Rulemaking, with the order containing the framework and legal analysis for imposing temporary standstills on existing contracts while program-carriage complaints are pending or compensation for noncarriage -- for example, a channel complaining that it couldn't get a contract in the first place citing discrimination according to affiliation. If such a complaint were upheld, there would be some form of "true up" payment for what the cable operator would have been paying if it had agreed to carry the network.

The order also clarifies the elements that a complaining party would have to offer up to make a prima facie case for a violation. For instance, it lays out what it considers an apples-to-oranges comparison of channels unlikely to prevail as discrimination according to affiliation. To that end, it points to the example of a music channel targeting young people complaining that it is not carried, while a music channel owned by the distributor, but targeting an older demo, is carried.

Some cable operators had complained that the commission lacked the authority to implement the standstill and would run into problems with the Administrative Procedures Act. According to an FCC source, the item was changed to address those criticisms and lay out a stronger case for why the agency had the authority.

Part of the impetus for the order and notice is to weed out complaints unlikely to pass muster, and speed the resolution of those that would. The FCC has been under long-standing pressure from Congress to speed the resolution of carriage complaints, some of which have taken years to decide.

In fact, then FCC chairman nominee Julius Genachowski told the Senate Commerce Committee during his confirmation hearings back in June 2009 that timely resolution of carriage disputes would be a priority. Committee chairman Jay Rockefeller (D-W. Va.) had complained that the FCC rarely resolved them in a timely manner.

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