Programmers Dial Up FCC About MSO Probe

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Washington—Some cable programmers are concerned that a Federal Communications Commission investigation could impede their ability to obtain or retain distribution on cable systems targeted by the agency.

The FCC is probing whether cable operators are violating agency rules by shifting some channels from analog to digital programming packages without sufficient notice to subscribers or local regulators.

In a letter to FCC leaders Wednesday, the programmers said that the reclamation of analog bandwidth expands cable system channel capacity, creating space for new digital channels. They added that the FCC's investigation could delay that transition, causing some digital channels to be dropped or denied carriage.

"We…are concerned that this inquiry and the suggestion that analog-to-digital channel changes may violate `various requirements' of the FCC's rules may have the unintended effect of slowing the current analog digital transition by cable operators," the programmers said.

The letter was signed by Charles Humbard, president and CEO of Gospel Music Channel; C. Michael Cooley, president and CEO of The Sportsman Channel; Mo Hassan, president and CEO of Bridges Network; Jacob Arback, president of The Africa Channel; Lawrence Meli, president and CEO of AmericanLife TV Network; and Patrick Baldwin, vice president and general manger of Retirement Living TV.

They added, "Many cable operators launch new channels at the very end or beginning of the calendar year. If your inquiry creates uncertainty among cable operators that results in a delay of the conversion, it would have the unintended effect of delaying such launches and conceivably of requiring deletions of cable channels because the additional planned capacity resulting from conversion would be temporarily unavailable."

On Oct. 30, the FCC sent letters to 13 cable operators in a broad investigation that demanded channel-movement data back to 2006 on a per-system basis. The FCC also asked for the wholesale prices cable operators pay for some cable channels, commercially sensitive material that the programmers said deserved "the highest level of confidential treatment available."

The FCC gave the MSOs 14 calendar days to respond.

On Tuesday, FCC chairman  Kevin Martin suggested that Comcast Corp. is looking at a fine as punishment for filing an incomplete response.

"They didn't even answer the questions directly. They had a narrative but they didn't even answer the specifics of the questions directly," Martin said, referring to Comcast.

Comcast  gave the FCC an overview of its digital migration policy but didn't provide a granular look at its programming contracts.

"There was not detailed programming cost information in there," a Comcast spokeswoman said. "After reviewing their request for information, we determined that it would have taken over 1,500 man hours just to compile the information for 2008."

Comcast excluded wholesale programming contract information from its FCC response.

"We stand ready to work with them and to see how best to proceed from this point. The amount of information was so substantial and the amount of time very short," the Comcast spokeswoman said.

FCC staff is investigating whether cable operators moved channels to digital and then charged consumers to rent digital boxes to maintain access to the same number of channels.

The FCC is also looking at whether cable operators lowered the price of an analog tier after channels had been removed. The agency is trying to determine whether consumers and local governments were properly notified.

"Certainly, we do not want to interfere with, or to delay, the…investigation. However, because that investigation apparently is a matter of public knowledge, we wanted to apprise you of our concern about potentially unintended adverse impacts upon programmers and the programming diversity that we provide to viewers," the programmers said.

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