FCC Warns Cable on Program Access

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Washington -- The Federal Communications Commission last
week moved to tighten enforcement of its program access rules.

In doing so, the agency put cable networks on notice that
they may have to pay fines, damages or both if they knowingly violate FCC rules.

In a unanimous decision, the FCC made three changes that
FCC chairman William Kennard said would demonstrate the FCC is "moving aggressively
to enforce program access provisions."

First, the FCC said it would decide exclusivity petitions
and complaints within five months and price discrimination cases within nine months.

The timetable was adopted in response to Ameritech New
Media's complaint that the FCC took too much time to decide program access cases, a
situation ANM said hurt new entrants trying to obtain programming.

Second, the FCC said it intended to rely more on its
authority to fine cable programmers that lose program access cases. The FCC said it would
award damages for violations in cases where defendants "knew or should have
known" that FCC rules were being broken. The FCC said, however, that it would not
award punitive damages.

FCC commissioner Susan Ness indicated that damages would be
awarded only "in certain egregious cases."

FCC commissioner Harold Furchtgott-Roth said he was
concerned that damages proceedings would consume too much of the FCC's time and
resources, but commissioner Gloria Tristani did not share that concern.

"Before we get to damages, we have to find willful
behavior," she said. "That's an extremely difficult showing to make."

ANM president Deb Lenart applauded the FCC's actions.

"We're pleased the commission moved to provide
swift justice for competitors and consumers, and to impose financial penalties to
discourage cable operators from violating its rules," Lenart said.

National Cable Television Association president Decker
Anstrom said cable competitors have abundant access to cable-owned networks and the FCC
has had to intervene on behalf of competitors in only a few cases.

"There's no evidence in the record to suggest
that more government is needed," Anstrom said.

Third, the FCC said programming buying groups such as the
National Cable Television Cooperative, which represents 960 small operators with 9 million
subscribers, do not need joint and several liability to ensure that programmers get paid.
The FCC said NCTC, in lieu of joint and several liability, could maintain enough ready
cash or credit to meet one month's programming cost.

The FCC refused to take action in three areas.

It rejected ANM's request that program access
complainants have automatic access to MSO programming contracts. The cable industry said
such a right of discovery would have turned program access cases into "fishing
expeditions" for contracts and other documents.

It refused to adopt rules regarding instances where cable
operators have migrated programming from satellite to terrestrial distribution so that the
programming is no longer covered by program access rules.

Cable industry sources said they were hopeful that the FCC
would then rule against EchoStar Communications Corp. and DirecTV, which have filed FCC
complaints to gain access to Comcast SportsNet, a Philadelphia regional sports network
that Comcast distributes by microwave and won't sell to the direct-broadcast
satellite companies.

Finally, the FCC made no mention of extending
program-access rules to non-vertically integrated cable programmers. But cable industry
sources said the FCC telegraphed long ago that it would not seek to broaden its rules to
cover cable networks unaffiliated with cable operators.

One cable industry lawyer said the FCC's actions were
largely unnecessary, claiming program access rules have functioned smoothly.

"The thing has worked really well. It's hard to
find any systemic failure in the program access rules," the lawyer said.

The lawyer said the FCC's decision to rely on fines
and damages could be counterproductive, since parties might decide to dig in at the
bargaining table and not settle disputes privately.

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