DEREGULATORY AGENDA PREDICTED FOR FCC ON CABLE, BROADCAST
Leading media company executives predicted ownership restrictions would crumble in coming year in both broadcast and cable. On panel at Precursor Group conference in Washington Wed., Shaun Sheehan, Tribune vp-Washington office, said FCC’s newspaper-broadcast cross-ownership restrictions and other ownership rules were “very much in play.” With Tribune properties in L.A., N.Y.C., Hartford, and Ft. Lauderdale-Miami, at risk, Sheehan called his company “the poster child” of FCC rule. NCTA Pres. Robert Sachs said horizontal ownership rules in cable got lots of attention, but most NCTA members probably were affected more directly by pending FCC decision on broadband access. Reason horizontal rule of 30% audience cap would have less impact, Sachs said, is that, as practical matter, no company is in danger of bumping up against limit. Proposed AT&T Broadband-Comcast merger would involve 22 million subscribers, which is only 25% of multichannel video programming services users, Sachs said. Only area where proposed merger could become “dicey” is if federal govt. assigns more subscribers to merged company because of minority stakes it would hold in other companies, such as AT&T’s 25% of Time Warner Cable, Sachs said. “The FCC really needs to be taking a comprehensive look at attribution rules across the board,” he said. NCTA wants those rules overhauled so companies aren’t credited with subscribers they have no control over. Current rule attributes subscribers if company holds 5% or more, even though it may not have board seat or otherwise have role in making decisions.
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FCC Cable Bureau Chief Kenneth Ferree, asked to make his own predictions about ownership rules, did impression of Johnny Carson’s “Carnac the Magnificent,” holding envelope up to his head. “Facts, facts, facts,” he said, adding that FCC was “serious” about fact-gathering in all pending ownership proceedings. He declined to disclose more. AOL-Time Warner Exec. Vp Paul Cappuccio said “sleeper” issues this year would be broadband and whether cable companies would have to open their high-speed data lines to ISPs. Cappuccio said “good news” for cable operators was that multiple ISPs was compelling business model, driving more penetration without cannibalizing Road Runner service. “Much of the regulatory debate about multiple ISPs on cable [is] pretty much a moot issue,” he said, and companies will offer other ISPs on their own.
NCTA’s Sachs said important issue was FCC’s proceeding to determine how to define cable modem service, whether it was cable, information or telecom service. He worried that local franchising authorities could seek new power to levy fees, depending on how service was defined. News Corp. Senior Vp-Govt. Affairs Michael Regan predicted sleeper issue would be copyright protection and how to preserve it in digital environment. He said his company was working on it and expected to come up soon with watermark remedy called “flagging.”
Asked by Precursor Group CEO Scott Cleland about proposed merger of AT&T Broadband-Comcast and EchoStar takeover of DirecTV, Tribune’s Sheehan said officially company was “silent” on issues, but unofficially, deals “make us very, very nervous.” Sachs said regulators should examine issue whether EchoStar-DirecTV deal would leave rural viewers with any choices. Regan of News Corp., pointing out that his was content company, issue of monopsony’s creating mergers “worries us immensely.” Added AOL-TW’s Cappuccio, with smile: “There’s nothing wrong with size.”