Washington—The cable industry on Friday asked the Federal Communications Commission to suspend new rules that slashed the rates third-party programmers pay cable companies to lease time on their systems.
The request came from the National Cable & Telecommunications Association, which urged the FCC to keep the old rules in place while NCTA's legal action against the new ones was being heard in a federal court of appeals.
"By purposely encouraging a flood of new commercial leased access users, the new rules—and, in particular, the new rate formula—will irreparably harm both cable operators and cable program networks," NCTA said in its filing.
Last November, the FCC cut leased access rates by 75% and effectively imposed a ceiling that cable could not charge more than 10 cents per month per subscriber.
Under federal law, large-capacity cable operators must set aside up to 15% of their channels for commercial lease by third party programmers. The leased access concept has not been a wild success in part because the pay-TV business model is predicated on programmers receiving compensation from distributors, not vice versa.
But NCTA fears that the FCC has driven leased access rates so low that programmers won't need to pay for distribution.
"Cable operators will be forced to rearrange and remove existing programming from their channel lineups to accommodate dozens of new commercial leased access users who avail themselves of free channels, making it more difficult, confusing, costly, or even impossible for customers to continue watching the programming of their choice," NCTA said.
NCTA asked the FCC to act on its stay motion no later than April 11, 2008.