FCC Defends Leased-Access Rules in Federal Court

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Washington -- A Federal Communications Commission lawyer
appeared in federal court last week to defend new leased-access rules that are under
attack by home shopping network ValueVision International Inc. and hundreds of low-power
TV stations as too favorable to cable operators.

FCC attorney Joel Marcus said the agency, while far from
crafting perfect rules, did its best last year to come up with balanced access rates that
were fair to independent programmers and cable operators.

"No one has come here with a mechanism that is any
better," Marcus said to a three-judge panel of the U.S. Court of Appeals for the
District of Columbia Circuit.

Last year, the FCC slashed leased-access rates, producing
an effective monthly rate of about 35 cents per subscriber. ValueVision, after failing in
its bid to get the FCC to cut rates to about 10 cents, took the agency to court. A
decision isn't expected for several months.

Cable operators are required to set aside up to 15 percent
of their channels, depending on system size, to programmers that want to pay for access on
a full-time or part-time basis.

Marcus said the FCC had a difficult time with leased access
because the issue cut against the economics of cable, where operators pay programmers, and
not the other way around.

ValueVision lawyer William Richardson told the court that
the FCC's leased-access rates should be voided because the commission designed them
without regard to whether "they were going to be affordable at all."

ValueVision claimed that the FCC's rates, adopted in
1997, were more than triple what was economically reasonable. As a result, it said in a
court filing that leased-access channels were being underutilized or not used at all.
Unused leased-access channels revert to the cable operator.

States News Service

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