WASHINGTON — It’s Round 2 in the fight over program-access rules at the Federal Communications Commission, as cable-industry players weigh in on whether the agency should presume that exclusive contracts for regional sports networks are unfair.
That issue has divided the smaller, independent cable operators represented by the American Cable Association from the larger ones represented by the National Cable & Telecommunications Association. And the twain still isn’t meeting.
The FCC has issued a further notice of proposed rulemaking seeking comment on various other possible changes, including a variety of rebuttable presumptions related to exclusive contracts with regional sports networks, both proposals backed by ACA.
Here are the key sticking points.
Exclusive contracts between MVPDs and their co-owned regional sports networks are unfair.
Such contracts constitute unfair acts because the live programming on RSNs is highly desired and non-replicable, ipso facto exclusive RSN contracts “are very likely to be large, the potential competitive benefits very small, and thus the harms likely outweigh the benefits.”
While the FCC has already established the rebuttable presumption that exclusive RSNs significantly hinder competition, “the entrenchment of competition in the video marketplace makes it no longer reasonable to presume in all cases that any such competitive effect will be unfair.”
The “unfair acts” standard and a “significant hindrance” standard both apply to exclusive contracts for national sports networks such as ESPN.
Because national sports networks are also highly desired and non-replicable, exclusive deals should be similarly unfair.
The RSN presumption was based on the commission’s decision that regional sports team are of such local interest that denying access hinders competition. But games televised by national sports networks are not limited to one region or team, so there is “no reason to expect them to be as unique and non-replicable as the commission found RSNs to be.”
If there has been a successful exclusive contract complaint against programming, all exclusive contracts for that programming would be presumed unfair.
“[I]f one MVPD has previously been able to establish that it will suffer significant harm if the cable-affiliated programming was withheld and that any potential competitive benefits were unlikely to exceed the competitive harms, then it very probable that other MVPDs would be able to establish a similar claim.”
“If one MVPD has previously been able to establish that it will suffer significant harm if the cable-affiliated programming was withheld and that any potential competitive benefits were unlikely to exceed the competitive harms, then it very probable that other MVPDs would be able to establish a similar claim.”