Washington – Cable operators that own satellite-delivered cable networks will be forced to sell them to pay-TV distribution rivals for five more years, under terms of a unanimous Federal Communications Commission’s ruling Tuesday night that gave continued life to program access rules created by the 1992 Cable Act.
The FCC ruling means that Time Warner will need to sell CNN and Comcast the Golf Channel to their pay-TV rivals, such as DirecTV and EchoStar, and to other cable operators that may or may not be direct competitors.
The five-year extension wasn’t a surprise since the National Cable & Telecommunications Association didn’t put up much resistance this year, just like in 2002 when the FCC tacked on five more years. Had the FCC not acted, the so-called cable programming exclusivity ban was to sunset on Oct. 5.
FCC Democrat Michael Copps called the program access rules “one of the true success stories of the 1992 Cable Act.” He added that DirecTV and EchoStar “just would not exist” without them.
The exclusivity ban was to sunset in 2002, but not if the FCC felt the rules remained necessary. The agency voted to add five years in 2002 and promised another review in 2007.
After the meeting, FCC chairman Kevin Martin said that the agency retained authority to keep adding on years even though the law can be read to mean that the agency had only one shot at an extension, and that was in 2002 on the 10th anniversary of the Cable Act.
“I think we indicated even at the time (in 2002) that we could look at it again and extend it again as the commission determined to do today,” Martin said.
The five-year extension keeps alive the program access complaint filed in January by Virtual Digital Cable, which streams linear cable programming over the Internet.
VDC, based in Northbrook, Ill., is trying to gain access to several Time Warner networks, including TNT, TBS, CNN and CNN Headline News. VDC needs the FCC to rule that as an Internet video provider, it qualifies to file a program access complaint.
In the ruling, the FCC created new rules that will make it easier for parties that file program access complaints to get access to programming contracts to determine if any discrimination exists.
The FCC also voted to launch a notice of proposed rulemaking sought by the American Cable Association that will examine whether Viacom, Disney, Time Warner and other big cable programmers use their clout to force less powerful pay-TV distributors to license more channels than they want to offer their subscribers.
The FCC is calling this a product tying issue. It didn’t appear the agency’s NPRM is going to reach the law that both requires cable operators to cluster local TV signals in the basic tier and requires subscribers to buy the basic tier before any cable programming service.
The FCC’s rulemaking procedure will examine whether the program rules should cover cable-affiliated programming that isn’t satellite-delivered, known to some as the “terrestrial loophole.”