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FCC Sunsets Exclusivity Ban

FCC Sunsets Exclusivity Ban 10/07/2012 8:00 PM Eastern

WASHINGTON — In a victory for larger cable operators, the Federal Communications Commission last Friday (Oct. 5) voted to sunset the programaccess rules’ ban on exclusive contracts between distributors and their co-owned networks.

While smaller cable operators, satellite companies, telcos and other competitors had pushed the FCC to retain the ban or, alternately, create additional safeguards against withholding programming to compensate for the ban’s exit, the commission decided instead to put those in a notice of proposed rulemaking. That was a way to tee them up for comment — or, some would say, kick the can down the road — without making them part of the order.

It was a 5-0 vote, with FCC commissioner Robert McDowell concurring on the notice of proposed rulemaking, about which he had concerns. The order includes a six-month shot clock on resolving complaints on a case-by-case basis, and the opportunity for a complainant to seek a standstill for contract renewals so a channel would stay on the air pending resolution.

The sunset is not expected to create a sea change in distribution. The only major cable distributor with a stable of national programming channels, Comcast, is already under an exclusivity ban for those and its RSNs until 2018 as a condition of its NBCUniversal merger deal.

That leaves regional sports networks, and while dozens of co-owned RSNs are distributed by Cox, Cablevision, Time Warner Cable and Comcast, the FCC is including in the sunset order the rebuttable presumption that withholding those RSNs from the competition is anticompetitive.

The FCC will handle such complaints under rule 628(b), which makes it “unlawful for a cable operator, a satellite cable programming vendor in which a cable operator has an attributable interest, or a satellite broadcast programming vendor to engage in unfair methods of competition or unfair or deceptive acts or practices.”

Once it became clear the ban was to be deepsixed, smaller independent MSOs represented by the American Cable Association had asked the FCC to include a number of other rebuttable presumptions in the order, including a presumption that withholding national sports networks is anticompetitive and standstills were warranted. But the National Cable and Telecommunications Association had said adding all those presumptions of anticompetitive behavior would have been a de facto retention of the ban.

On the plus side for the ACA, the FCC in the NPRM seeks comment on the presumptions about national sports networks and about previously challenged exclusive contracts. It also tentatively concludes that it should change its definition of “buying group” to allow the National Cable Television Cooperative to file program-access complaints without assuming collective liability for all of its members, something the ACA had pushed for.

September