The Federal Communications Commission has launched the proposed rulemaking on what changes, if any, to make to its program access rules.
Those rules generally require cable operators to sell their satellite-delivered networks to satellite-TV firms, telco providers and other competing pay TV services. The prohibition on exclusive contracts sunsets in October unless the FCC acts to renew it. At a Free State Foundation event in Washington Tuesday, Comcast/NBCU Washington president Kyle McSlarrow said program access rules no longer made sense.
The item had been scheduled for a vote at the March 21 meeting, but was deleted Tuesday with the note that it had been voted on circulation. When FCC chairman Julius Genachowski circulated the item, that meant it had his vote, so commissioners McDowell and Clyburn have now voted. Although it is a proposed rulemaking, it simply begins the process of comment and reaction to various FCC proposals in the item.
As Multichannel News has reported, according to sources that includes options for dropping the outright ban but retaining access mandates for satellite-delivered regional sports nets and other unique programming for which the FCC decides there is no substitute.
Even if the prohibition on exclusive contracts were to be scrapped, terrestrially delivered RSNs would still likely have to be made available anyway. In voting to end the so-called "terrestrial exemption"- which allows cable firms to deny competitors access to networks not delivered via satellite - from access rules, the agency concluded that cable operators who do not share terrestrially-delivered RSNs with their competitors would be presumed to be in violation of FCC rules against unfair acts or practices, a separate portion of the rules that does not sunset.
The other option would be essentially a market-by-market waiver approach, in which cable operators could seek to lift the prohibition by making a case for competition in individual markets. That is similar to the FCC's approach to the ban on newspaper-broadcast cross-ownership, where it allows for case-by-case consideration in some markets, though few such waivers have been granted.
The NPRM also seeks comment on whether the rules "adequately" address "potentially discriminatory" volume discounts and uniform price increases.
The item also proposes extending the deadline for replying to complaints from 20 days to 45 days.
The key provision in the Program Access notice offers these alternatives to preserving access to programming in the event the commission decides not to simply renew the requirement that cable operators make their co-owned program networks available to competitors on reasonable terms and conditions. "To the extent that the data do not support retaining the exclusive contract prohibition as it exists today, the NPRM seeks comment on whether the commission can preserve and protect competition in the video distribution market by either:
1) "Sunsetting the exclusive contract prohibition in its entirety and instead relying solely on existing protections by the program access rules that will not sunset. The case-by-case consideration of exclusive contracts pursuant to 628B. 2. The prohibition on discrimination in 628c2b. 3. The prohibition on undue or improper influence in 628c2a.
2) "Relaxing the exclusive contract prohibition by: 1. Establishing a process whereby a cable operator or satellite-delivered cable affi liated programmer can seek to remove the prohibition on a market-by-market basis based on the extent of competition in the market; 2. Retaining the prohibition only for satellite-delivered cable-affiliated RSNs or any other satellite delivered cable-affiliated programming that the record establishes as being important to competition and nonreplicable and having no good substitutes and/or; 3. Other ways commenters have proposed."