FCC Extends Program-Access Rules

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Rules that give the direct-broadcast satellite industry mandatory access to a
range of cable networks were extended Thursday for another five years by the
Federal Communications Commission.

Republican FCC chairman Michael Powell said retention of the rules was
necessary because the cable market was 'phenomenally concentrated' and operators
retained the incentive and ability to use control of programming to act in an
anti-competitive fashion.

The FCC adopted the extension in a 3-1 vote. Republican commissioner Kathleen
Abernathy issued a strong dissent, saying the rules were no longer necessary in
light of market developments over the past decade.

Under the rules, a satellite-delivered cable network with a financial
affiliation with a cable operator is barred from signing exclusive distribution
deals with any cable operator. As a result, AOL Time Warner Inc. is required to
sell Cable News Network and Home Box Office to DirecTV Inc. and EchoStar
Communications Corp.

Congress included the program-access provision in 1992 Cable Act to
jump-start competition between cable and DBS. When the law was passed, there
were no high-power DBS subscribers. DirecTV and EchoStar combined currently
serve at least 16 million subscribers.The ban on cable exclusivity was designed
to sunset Oct. 5 unless the FCC determined that an extension of the rules was
'necessary to preserve and protection competition and
diversity.'

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