CABLE AND DBS TO GO HEAD-TO-HEAD ON PROGRAM ACCESS RULES
FCC began examining whether it still was necessary for programmers affiliated with cable operators to sell programming to their competitors, especially DBS providers that appear to be gaining ground on cable in market. Notice of Proposed Rulemaking (NPRM), which Commission adopted 4-0 Thurs., looks at rules that require vertically integrated programming vendors to make satellite-delivered programming available, not only to their affiliated cable operators in which they have financial stake, but also to satellite TV operators and other multichannel video providers in whom they don’t have investment. That provision, in Sec. 628 of Cable Act of 1992, is set to sunset Oct. 5, 2002. Law says rules should sunset unless FCC finds in proceeding that ban is necessary to preserve and protect competition and diversity in marketplace.
“Program access” rules were adopted when Congress was concerned by its finding that majority of cable operators enjoyed monopoly in program distribution at local level, and concluded that use of exclusive contracts between satellite- delivered vertically integrated programming vendors and cable operators could inhibit development of competition among distributors. NPRM seeks comment on several issues, including: (1) What effect prohibition on exclusivity has had on competition in local and national markets. (2) Whether it’s advisable, and consistent with FCC’s statutory authority, to retain rules for only some types of programming or in some specific cases.
In adopting NPRM, Commission didn’t set timetable for proceedings, but Cable Bureau Chief Kenneth Ferree said he believed staff would create proposed rule to present to Commission well before Oct. 5, 2002, deadline. Although comrs. didn’t comment Thurs. on merit of current rules, both Chmn. Powell and Ferree previously had indicated support for extending them.
Industry critics of rules say there are several loopholes, including one that would allow vertically integrated programmers to maintain exclusive programming with affiliated operators as long as they deliver that programming terrestrially, rather than via satellite. Several industry insiders pointed to example of Comcast, which has maintained exclusivity on some of its regional sports programming by delivering over fiber. Others have said 1992 law didn’t envision explosion of growth in DBS market, so that, if DBS industry were to begin to create programming, it wouldn’t have to abide by similar exclusivity ban on dealing with its own providers.
NCTA, not surprisingly, said rules had"outlived their usefulness.” It cited rapid growth of DBS market share, which has increased substantially in recent years. “Market realities” dictate that no national programmer would withhold its programming from DBS, NCTA spokesman said. Also not surprisingly, satellite TV industry feels rules should be extended. Spokesman for Satellite Bcstg. & Communications Assn. said cable still had80% market share, compared with 16% for DBS. “The playing field is starting to level,” he said. “In order for us to continue to grow, we need these rules extended.” What’s more, spokesman said, DBS industry is amenable to closing loophole on delivery systems, meaning rules should apply to all vertically integrated programmers, regardless of technology used to deliver programming.