Policy

In Carriage Cases, ‘Zero’ Means a Lot

12/05/2011 8:01 AM Eastern

Washington — The National Cable & Telecommunications
Association and Bloomberg Television agree that,
to date, there are no examples of a programmer winning
a complaint against a cable operator for unfairly denying
carriage.

They reach very different conclusions about what that
absence indicates.

Bloomberg has been battling the NCTA’s biggest member,
Comcast, in a news-neighborhooding complaint at the
Federal Communications Commission. The business-news
programmer feels it should be located
near similar services on
Comcast’s program lineups.

The network and the cable
trade group both commented
last week on proposed programcarriage
rule revisions that include,
potentially, standstills that
would ensure continued carriage
through a dispute; greater discovery
rights for both sides; damage
awards; and shot-clock provisions
to speed up dispute resolution.

‘FUNDAMENTALLY BROKEN’

“The program-carriage rules have
been in place for almost two decades.
During that time, not a single
one has resulted in a finding
that the rules were violated,” the
NCTA noted.

“Since the commission adopted
the program-carriage rules,
no independent programmer has
ever achieved a favorable Commission decision in a program-carriage complaint,” Bloomberg also noted.

Bloomberg called the dearth of complaints and lack of
a single victory “strong evidence” the process was “fundamentally
broken” and needed major overhaul.

The programmer applauded the FCC for proposals to
hasten resolution of a complaint, adopt “baseball-style”
arbitration in case of an impasse, and institute standstills
for renewals and monetary “true ups” for instances of noncarriage.

The NCTA chided the FCC over proposed changes. The
cable group said the most reasonable conclusion to draw
was that the problem Congress intended to address in the
1992 Cable Act — of vertically integrated operators favoring
their own programming over nonaffiliated networks —
“was — or at least soon became — illusory.”

Bloomberg’s complaint against Comcast would not be
subject to the new rules. That did not stop the businessnews
service from saying Comcast’s alleged violation of an
NBCUniversal merger condition was an example of what
the FCC was addressing with proposals, such as speeding
up the complaint-review process.

Bloomberg was particularly concerned about the need
for expedited review in instances like its neighborhooding
complaint, where the remedy is time-limited. The
Comcast/NBCU conditions sunset after seven years from
last January.

Bloomberg said two things are clear: The potential for
abuse has grown since 1992 and the market has become
more concentrated. There is also consensus that the existing
process has not protected independent programmers
or the public.

“The proposed program-carriage rules, like the newsneighborhooding
condition in the Comcast/NBCU order,
recognize that increased media consolidation means increased
incentive and opportunity for MVPDs to exploit
their monopoly and deprive the public of independent
voices,” Bloomberg’s Greg Babyak said. “It is critical,
then, that both the program-carriage rules and the newsneighborhooding
conditions be implemented as rapidly
as possible.”

Bloomberg is also partial to baseball-style arbitration
— in which a mediator must choose from only one side’s
position or the other, based on which is considered most
reasonable, as is the case during Major League Baseball
salary-arbitration proceedings — in order to speed the process
and encourage private settlements.

The FCC has proposed allowing for compensatory
damages. Bloomberg would add punitive damages to
the list.

Bloomberg also supports making mandatory carriage
orders take effect immediately, clarifying who has the burden
of proof and adopting a strong anti-retaliation rule. The
FCC is proposing making retaliation itself a form of discrimination.

The NCTA told the FCC there is no need to make it easier
to file complaints because there is no real harm that
requires government intruding on protected speech or expanding
existing protections.

‘UNWARRANTED’ FIXES

“The commission’s proposals to encourage and facilitate
the filing of more complaints and to expand the scope of
the discrimination provisions of the rules are wholly unwarranted
and at odds with the statute,” the NCTA said.

The NCTA called the FCC’s expansion of discovery rights
a “fishing expedition” that could yield useful competitive
information but would be unlikely to lead to more meritorious
complaints.

As for authorizing damages, the NCTA said that could
give programmers undue leverage in negotiations and lead
to operators giving “unwarranted” preferential treatment
to some networks to settle or avoid bogus claims.

The commission has proposed getting rid of the automatic
stay of any Media Bureau carriage mandate. Currently,
such forced carriage must be reviewed by the full
commission before it goes into effect. The NCTA has argued
that mandatory carriage or programming a cable operator
does not want to carry has serious First Amendment problems,
and that it’s unclear such a remedy is ever justified,
but certainly not before the commissioners have affirmed
a bureau or administrative law judge decision.

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