News

Cablevision Challenges FCC on Program Access

9/26/2009 2:00 AM Eastern

Cable was looking to go two for two last week, as lawyers for Cablevision Systems took on the Federal Communications Commission’s five-year renewal of program-access rules barring exclusive contracts between cable providers and co-owned networks.

That came in oral arguments in the U. S. Court of Appeals for the District of Columbia Circuit, which hears challenges to FCC rules. Just three weeks ago in a case involving Comcast, the same court ruled that the agency had not justified maintaining the 30% cap on the total number of U.S. pay TV subscribers any one provider may serve.

Bethpage, N.Y.-based MSO Cablevision argued that the same finding against maintaining the program-access rules — which compel cable companies to sell the satellite-delivered networks they own to satellite-TV providers, telcos and overbuilders — should follow.

The three-judge panel was not ready to endorse that theory by acclamation, however. Cablevision’s attorney got some tough questions from the bench.

Chief Judge David Sentelle suggested Cablevision faced a high hurdle in asking the court to overturn the predictive judgments of the FCC in not allowing the program-access rules to sunset in 2007, suggesting it had been years since the court did something similar.

Cablevision attorney Henk Brands reminded him of the subscriber-cap ruling, and Sentelle conceded the point. But Judge Thomas Griffith asked why the case was not simply a matter of Cablevision’s judgment (that the ban was no longer necessary given the competition in the multichannel video market), as opposed to the FCC’s judgment (that it was still necessary despite, and even because of, that competition), in which case it would seem just the sort of agency expertise to which Congress would defer.

In the subscriber-cap case, Brands pointed out in his argument, the FCC had argued against removing the cap by saying “hold on, the time is coming” — just not yet. The court said that was not enough reason to hold off, argued Brands, and that same reasoning should apply to the FCC’s defense of extending the program-access rule.

FCC lawyers argued that cable’s market share of English-language programming would have to decrease some more before there was sufficient competition to drop the rule, saying one-sixth of the market, rather than the current nearly one-third market share, might be a better threshhold.

Brands said the pay TV market became competitive the minute direct-broadcast satellite service became available, and that exclusive deals were the common currency of business.

September