Order Dealing with Program Access Rules Seen Circulating Soon
An order addressing the Oct. 5 sunset of the FCC’s ban on exclusive programming deals among cable operators and the programming networks they own is expected to circulate soon, industry and agency official said. If the item is to be voted at the FCC’s Sept. 28 open meeting, it would need to circulate by Friday, Sept. 7, industry attorneys said. But others cautioned the order, which is likely to be controversial, could get an 11th-hour treatment from the commission. Industry lawyers said information on the item has been scant but they expect it to relax the ban on exclusive programming contracts rather than let it expire or extend it entirely. A spokeswoman for the Media Bureau declined to comment.
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Lobbying is expected to intensify after the Labor Day holiday, said attorneys on both sides of the issue. Already, parties have been visiting with officials from the chairman’s office and corresponding with the Media Bureau, recent filings show. Meanwhile, FCC economists have been gathering reams of information from pay-TV distributors under a protective order, FCC filings show.
DirecTV wrote the FCC this week with charts showing how the number of vertically-integrated programming networks has grown and their popularity has been fairly constant since 1996. “These graphs show that both the number and popularity of cable-affiliated national networks has increased since the last time the Commission extended the cable exclusivity provision in 2007,” DirecTV’s counsel wrote in the letter (http://xrl.us/bnnrjz): “Given this evidence there is no basis to reach a different conclusion and allow the prohibition to sunset in 2012."
Lawyers with the Independent Telephone and Telecommunications Alliance met with aides to Chairman Julius Genachowski this week, an ex parte notice shows (http://xrl.us/bnnrj9). “Although competition among video programming distributors has continued to increase since the Commission last extended the exclusive contract prohibition in 2007, incumbent, vertically-integrated cable operators remain the dominant providers in the MVPD marketplace and continue to have the incentive and ability to withhold programming from competing providers,” the notice said.
Competitive pay-TV operators seem worried about the prospect of parts of the ban expiring, a cable attorney said. “I think it’s fair to say they are concerned and are aggressively lobbying the issue,” the attorney said. “There’s a lot on the competitive side that suggests they have reason to worry.” That includes presumed skepticism from the two Republicans on the commission about extending the rules further, the attorney said. The notice of proposed rulemaking on the issue the commission issued earlier this year discussed relaxing the ban by allowing distributors to get out of it on a market-by-market basis, by retaining parts related only to regional sports networks or “other satellite-delivered, cable-affiliated programming that the record here establishes as being important for competition and non-replicable and having no good substitutes."
Other questions raised by the order could be dealt with in a separate item, industry attorneys said. That includes potential revisions to the FCC’s program access rules that would cover volume discounts, uniform price increases and the complaint process at the agency. “The other stuff in the NPRM isn’t under the same deadline” as the exclusive contract ban, an attorney said.