News

NCTA: Scrap Cable-Act Regs

5/23/2009 2:00 AM Eastern

Cable’s lobbying organization said last week that changes in the television marketplace have made a host of regulations imposed by the 1992 Cable Act “relics of a bygone era” now that competition has been “unquestionably” achieved.

Those regulations concern rates; program access; program carriage; leased access; public and educational channel access; cable-ownership restrictions and more.

The National Cable & Telecommunications Association indicated to the Federal Communications Commission last week that those rules were no longer necessary. The comments were intended for the agency’s preparation of its 14th report to Congress on video competition.

The previous 13 reports are “documentary history of the steady and irreversible growth of competition in the video marketplace,” the NCTA said.

The pace has increased exponentially in the three years since the FCC put out its last report, the NCTA said, with growth in telco video, online video, home video and mobile video, as well as the potential of over-the-air multicast channels. Direct-broadcast satellite TV was at 29.6% of the multichannel video-distribution market in 2006 and has continued to grow (to an estimated 32% at year-end 2008). Cable subscriptions have been relatively flat in that period.

Also: YouTube viewers watched 5.5 billion streams in April; Hulu’s streams increased 490% that month, to 373.3 million, versus 63.2 million in April 2008, the group said.

There has also been a drop in the percentage of vertically integrated cable-program networks. After Time Warner Inc.’s spinoff of its cable systems earlier this year, the percentage of cable networks owned at least in part by a cable operator has fallen to 9.6% from 14.9%.

No cable operator owns more than one of the top 25 networks, the NCTA said. “In these circumstances, any lingering concern that cable operators might thwart competition in the video marketplace by favoring an affiliated program network or by withholding a vertically integrated network from a competitor should have disappeared.”

In fact, the commission has ample evidence that some programmers still have lingering concerns. An administrative law judge has recently presided over three FCC hearings in which cable programmers made just such a claim — that top cable operators have been favoring their own, similar channels.

The NCTA’s counter: “Given the diversity and quality of unaffiliated networks that already occupy those hundreds of channels, the notion that it should somehow be presumed, much less deemed, anti-competitive for a cable operator to decide not to carry one more unaffiliated service because the operator may own and already carry a similar service that it does own is not a sustainable claim.”

Services and channels were increased while prices went up “in some cases,” the NCTA said, noting that promotional discounts and bundled service have led to lower prices. In cases where prices went up, the industry group added, costs went up as well, to improve the product. Cable continues to invest in infrastructure: Faster broadband, two-way technology, bundled services and cutting-edge programming, the NCTA said.

The FCC has not put out a video-competition report since 2006. It has decided to combine three years’ worth of video competition reports into one. It did not release its 2006 report until January 2009, necessitating the effort to play catch-up.

The commission will become data-collection central over at least the next year or so, as it collates information on broadband deployment and minority ownership, as well as for the video competition reports.

September