MVPDs Divided on Standards Against Channel Withholding That FCC Asked About
Multichannel video programming distributors remain divided on whether the FCC should adopt a standard of rebuttable presumptions against withholding from other MVPDs channels that are affiliated with cable operators, comments on a rulemaking show. NCTA and programmers and operators that own channels opposed the presumptions that program access rules are violated by exclusive contracts for cable-affiliated regional sports networks (RSN) and national sports networks. Vertically-integrated operator/programmers also opposed the notion that once a channel affiliated with an operator is found to have one unfair exclusive contact, it can’t get more. The presumptions would be rebuttable by defendants.
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DirecTV, Dish Network, the American Cable Association, USTelecom and members of those associations, some also part of NCTA, generally backed such presumptive readings of unfair actions of Section 628 of the Telecom Act. Some filings said the agency should bring back its ban against exclusive deals for operator-affiliated channels distributed to MVPDs by satellite. The ban sunset in October’s order issued with the further notice (CD Oct 9 p1). Comments were posted Monday in docket 12-68 (http://xrl.us/bn6wbu).
ACA and Cox Communications differed on the size of buying groups, in which multiple MVPDs negotiate through co-ops and other groups carriage deals with programmers. ACA had asked the agency find any participant with no more than 3 million subscribers that’s in a buying group be able to get carriage deals. The 3 million safe harbor threshold would exclude all National Cable Television Cooperative members that don’t “generally purchase a substantial share of their programming through the NCTC,” ACA said (http://xrl.us/bn6wcp). Cox prefers no subscriber threshold, it said. If the agency adopts one, it should be “high enough (for example, 6 million) to permit mid-sized operators to participate,” the operator said (http://xrl.us/bn6wc3). ACA and Cox agreed more rule changes are needed besides the buying-group provisions the further notice asked about (http://xrl.us/bn6wb4).
The FCC-proposed “buying group reforms” won’t solve the “problem of anti-competitive volume discounts offered to the largest MVPDs and the accompanying inflated rates paid by mid-sized and small cable operators,” Cox said. It asked the agency to bar MVPDs from getting “non-economic” volume discounts on the per-subscriber cost of networks they buy from any programmer based on the pay-TV company’s customer count, and ban those providers’ “exclusive contracts for ‘must-have’ sports programming.” ACA wants the agency to add rebuttable presumptions against exclusive regional- and national-sports channel contracts and for networks the commission previously found were anticompetitively subject to past exclusives. Requests for some rebuttable presumptions against withholding came from both U.S. DBS companies, USTelecom and other members of the Coalition for Competitive Access to Content.
NCTA said the FCC lacks authority to adopt such presumptions, which the association said the coalition proposed at the “eleventh hour, apparently sensing that the per se ban was about to end” against such exclusives, a reality which came to pass in the October sunset order. There’s “no basis for adopting any” of the proposals, the association said (http://xrl.us/bn6wfh). “The Commission’s authority to adopt presumptions in administrative proceedings is limited.” The presumptions have no “rational connection between the proved and the inferred facts,” NCTA said. It said that “even assuming arguendo that exclusivity with respect to some particular network might, in some particular circumstance, be unfair and significantly hinder an MVPD from competing, the complainant should bear the burden of presenting evidence” before a cable network faces “burdensome costs” and having to produce documents in an administrative proceeding. The coalition “seeks to recreate the regulatory advantages it enjoyed under the per se ban regime even after the Commission opted for a case-by-case approach,” NCTA said.
Those backing a rebuttable presumption against future exclusives for channels with previous such deals the FCC already ruled against included Dish (http://xrl.us/bn6wjh), Independent Telephone & Telecommunications Alliance (http://xrl.us/bn6wjo) and USTelecom. Those filings and ones from other MVPDs, like DirecTV, that don’t own channels (http://xrl.us/bn6wjm) said providers should get continued carriage under “standstill” provisions of previous deals while some program access complaints are pending. Standstills for RSNs are “particularly critical, due to the unique nature of the programming,” USTelecom said (http://xrl.us/bn6wka). It cited “the tremendous consumer interest in sports programming, and its time-sensitive nature."
Opposing standstills and presumptions against unfair conduct were Cablevision (http://xrl.us/bn6wkp), its Madison Square Garden Co. affiliate (http://xrl.us/bn6wkz), Comcast and Time Warner Cable (http://xrl.us/bn6wmu). Cablevision and MSG have been ordered by the FCC to give telcos access to RSNs. “The Commission should scale back, not expand, government intrusion into private marketplace negotiations” as DBS and telco-TV have come to compete with cable, while the number of networks owned by operators “decreased dramatically” as networks “increased drastically,” Comcast said (http://xrl.us/bn6wmj). It said new rebuttable presumptions and expanding buying-group rules “would conflict” with the First Amendment and goals of the FCC and Obama administration to not regulate more than needed.