Cable Operators: Exclusive Contract Ban Should Go, Too9/08/2009 1:02 PM Eastern
Comcast and Cablevision Systems are looking to use a court's smackdown of the Federal Communications Commission's 30% national subscribership cap on cable operators to take a swing at the ban on exclusive programming contracts as well.
That is according to a copy of a Sept. 3 joint filing with the U.S. Court of Appeals for the D.C. Circuit from attorneys for Cablevision and Comcast, which challenged -- in the same court -- the FCC's most recent extension of the exclusivity ban, in 2007, for another five years.
The FCC has continued to renew the ban, which, like the 30% subscriber cap, was part of the 1992 Cable Act. The ban had a 10-year sunset, but the FCC has kept it in place, arguing that it continued to be necessary to require cable operator-owned networks to be made available to satellite operators on similar terms and conditions. The agency's August 2008 response to the operators' lawsuits is available here.
The Comcast and Cablevision filing cites the 30% decision as evidence the FCC was wrong about the exclusive ban, too.
Cable operator attorneys point out that in the 30% cap decision, which the U.S. Court of Appeals for the D.C. Circuit issued two weeks ago, the court said cable operators no longer have the bottleneck power over programming that concerned Congress back when the law was passed in 1992.
Cablevision and Comcast, in previously filed briefs, have argued that as the 30% cap goes -- and in this case, it is gone -- so goes the rule prohibiting exclusive programming contracts.
"Widespread withholding is now implausible," said the attorneys in the filing. "[T]here are proportionally fewer services to withhold. The limited withholding that may still occur will not threaten competition: most vertically integrated services have closely similar substitutes, and, when competitive MVPDs [multichannel video programming distributors] have sunk massive investments, withholding can no longer cause market exit."
Oral arguments in the case are scheduled for Sept. 22.
Comcast and Cablevision declined to comment on the case. An attorney for Cablevision whose name was on the filing said he could not comment.
-- Todd Spangler contributed to this report.