D.C. Court Sides With Cable On ‘Viewability’ Rule Sunset

WIN STREAK CONTINUES IN KEY TELECOM VENUE
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WASHINGTON — The U.S. Court of Appeals for the District of Columbia Circuit is the gift that keeps on giving, offering up yet another victory for cable operators, though this one was shared with the Federal Communications Commission.

Just before Christmas, a three-judge panel of the court rejected a National Association of Broadcasters challenge to the FCC’s 2012 decision to sunset its requirement that hybrid cable systems deliver analog and digital versions of must-carry TV stations, deferring to the FCC’s judgment and saying the agency had violated no rules of procedure.

The panel’s decision could still be appealed to the full court, and broadcasters were still mulling their options at press time.

The court panel was the same one that had handed the FCC a defeat last May by overturning the agency’s program-carriage violation finding against Comcast in favor of Tennis Channel. It is also the same court that threw out the FCC’s network-neutrality violation finding against Comcast in the BitTorrent file-sharing case.

That could bode well for cable in the D.C. Circuit’s pending decision on the FCC’s Open Internet order.

The sunset in question was of a 2007 rule (referred to as the “viewability” rule by broadcasters and as the “dual-carriage” rule by cable operators) that required MSOs to downconvert digital mustcarry TV station signals to analog format for their analog customers, an increasingly small percentage of the cable universe.

WAS STOPGAP MEASURE

The sunset did not mean cable operators no longer had to accommodate their analog customers. But they could do so by providing home-conversion equipment for free or at an “affordable” cost to consumers, rather than by delivering both analog and digital versions of must-carry stations.

The National Association of Broadcasters said the FCC decision was arbitrary and capricious and “does not square with congressional intent — in the 1992 Cable Act — that must-carry signals have to be viewable without added equipment, not merely available in theory.”

The three-judge panel of Brett Kavanaugh, Harry Edwards and Stephen Williams did not agree. The appeal lacked merit because the rule had only been a stopgap measure, they concluded.

The judges noted that by 2012, there were more home-conversion devices to display digital channels on analog sets (27 million) than there were analog cable customers (12.6 million).

The panel did not agree with the broadcaster’s argument that the Cable Act requires the FCC to maintain the rules for as long as there are any hybrid systems serving customers with analog sets.

JUDGE: ACT NEEDS UPDATE

Kavanaugh, for one, has long argued that other Cable Act directives are premised on a monopoly marketplace that no longer exists, and thus are ripe for review.

“[As] a matter of constitutional law and technological reality, the 1992 Cable Act’s various program carriage and nondiscrimination regimes rest on a hollowed-out foundation,” Kavanaugh said in a concurring opinion in the viewability-rule decision. “The commission was right to see the First Amendment problem in this case — and further cases like this no doubt loom on the horizon.”

In language the National Cable & Telecommunications Association should clip for its scrapbook, Kavanaugh said: “Because cable operators no longer wield market power, the government can no more tell a cable operator today which video programming networks it must carry than it can tell a bookstore what books to sell or tell a newspaper what columnists to publish.”

TAKEAWAY

Cable’s victory in the “dual carriage” ruling was just the latest in a string of wins in the key U.S. Court of Appeals for the D.C. Circuit.

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