News

Taking Martin To Court

12/07/2007 7:00 PM Eastern

This holiday season, the cable industry can be thankful about one thing from all its policy battles with Federal Communications Commission chairman Kevin Martin.

He doesn't have the last word.

That belongs to the federal courts.

Cablevision Systems confirmed last Wednesday that it has gone to U.S. Court of Appeals for the D.C. Circuit to overturn the FCC's ruling to extend the program-access rules for an additional five years. Comcast has also filed to overturn the rules.

Those rules, extended in September, require all cable operators, including Long Island, N.Y.-based Cablevision Systems, to sell their satellite-delivered networks to such competitors as DirecTV, EchoStar Communications, AT&T and Verizon Communications.

“Congress did not intend for the program-access rules to last for decades. Now, with three to five video competitors in many markets, a blanket application of these rules is no longer appropriate,” a Cablevision spokeswoman said last Wednesday.

On the Docket
Cable has initiated or joined five lawsuits in response to policies adopted by the FCC under chairman Kevin Martin. Four more are expected. Another six could be launched if Martin's anti-cable agenda is a success in 2008.
Active Likely Possible
SOURCE: Multichannel News research
Franchise reform Leased-access rate cuts 70/70 test finding
Program access MDUs Multicast must-carry
Set-top box waiver Dual must-carry/viewability Must-carry for DTV spectrum lessees
Customer information rules Cable ownership Two-way DTV plug-and-play rules
Inside wiring rules Arbitration in program carriage disputes
Pole attachments

FIVE CASES PENDING

As a result of new FCC rules adopted under Martin, the cable industry has initiated or joined five federal court cases against the national regulatory body.

The industry is expected to back at least four more challenges in the weeks ahead.

Depending on the level of Martin's success in 2008, cable could end up filing another six cases, bringing the litigation “sue-nami” to 15.

“Cable will probably set a new high-water mark for legal challenges to FCC decisions. And the courts may well vindicate a number of the positions cable took at the FCC,” said Stanford Group analyst Paul Gallant.

Cable hasn't had to put so many lawyers to work since 1993, when the FCC began adopting rules to implement the Cable Consumer Protection and Competition Act of 1992, a law that massively re-regulated the industry.

HIT LIST

Elements of the cable industry are also in court now trying to overturn Martin-backed policies on phone companies' entry into local video markets; on competitors' access to cable wiring in apartment buildings; on waivers from set-top box unbundling rules; and on sharing customer proprietary network information with joint-venture partners.

In the Cablevision program-access litigation, the FCC will have both AT&T and Verizon on its side as both telecom giants received permission from the U.S. Court of Appeals for the D.C. Circuit to intervene.

AT&T filed an FCC complaint against Cablevision Systems and Rainbow Media Holdings in an effort to gain access to regional sports channels FSN New York, Madison Square Garden Network and FSN New England.

“As a [pay TV] new entrant that offers competing video service in markets served by incumbent cable operators, AT&T's interests [sic] are directly affected by the rules in the [FCC's program access] order,” AT&T told the D.C. Circuit. “AT&T was an active participant in the FCC proceedings leading to the order, and therefore is entitled to intervene.”

Congress created the program-access regime in 1992 in an effort to grow the program-starved satellite TV industry.

Many believe Congress achieved its goals, as DirecTV and EchoStar today serve about 30 million subscribers combined.

The law required the FCC to let the so-called exclusivity ban sunset in 2002 unless competition would suffer. The agency decided to tack on five more years. Martin's new five-year extension keeps the rules in place until 2012.

Martin also has indicated interest in widening the regime to include all cable TV operator-affiliated programming, regardless of how it is distributed.

October