TV WRITERS SAY CREATIVITY IS BEING CHALLENGED BY CONSOLIDATION

Writers Guild of America (WGA), representing writers of virtually all national entertainment programming and much of national news Americans see, said media mergers have caused decline in quality and quantity of programming. WGA comments came in filing to FCC Jan. 4 -- deadline for comments on proceeding contemplating limits on cable ownership. “We all fear the day when network dominance overwhelms the few independent voices remaining,” WGA said, saying consolidation was eroding freedom of expression and creativity. Guild said independence has “virtually ceased to exist” in movies made for TV and miniseries and that they have largely been replaced by game shows, reality shows and sexually exploitive programming. WGA specifically criticized rules that allow program distributors to produce and control content. “When everything is squeezed through 1 or 2 or 3 narrow funnels, when profit and ratings and other corporate goals enter strongly into the mix, and the voice of the creators is forced to take a back seat, when the writer has to do it their way or be replaced, of course creativity suffers.”

WGA urged FCC to look beyond cable MSOs to other corporate entities in examining ownership limits. WGA called on Commission to hold hearings, retain 30% cable ownership cap, impose new limits on network ownership, set new limits on network self-production and on how many hours any single supplier can produce for single network and act to keep EchoStar and DirecTV from merging.

In same proceeding, coalition of consumer groups -- Alliance for Community Media, Center for Digital Democracy (CDD), Consumer Federation of America (CFA), Consumers Union (CU), Media Access Project (MAP) and United Church of Christ, among others, submitted 280-plus page filing asking FCC to reimpose cable ownership limits. Groups criticized proposed merger of AT&T Broadband and Comcast, saying combined company would own cable systems reaching about 34% of multichannel video programming distributor households and more than 40% of total U.S. cable subscribers. Companies would have to shed 3.5 million subscribers to comply with limit supported by groups. Comcast Pres. Brian Roberts already has said his company intends to sell off AT&T’s stake in Time Warner, with about 3.2 million subscribers.

Consumer groups’ filing includes analysis based on economic theory that they say proves industry is “prone to the abuse of market power,” which Congress feared when it enacted Communications Act. Groups say cable strategy includes “muscling independent programmers to withhold content from competing distribution facilities.” Analysis also compares cable and DBS and concludes that DBS is no substitute for cable. “DBS remains nothing more than a niche product purchased by people who cannot get cable (40% of DBS subscribers cannot get cable) or viewers who are willing and able to purchase expensive specialty bundles, such as sports channels and foreign language services,” groups wrote.

AT&T, however, said marketplace changed dramatically in recent years, with advent of noncable programming purchasers such as DirecTV, widespread deployment of digital technology, and growth in supply and diversity of programming. AT&T said there is evidence of increasing programmer leverage in carriage negotiations, specifically that programming costs are rising, and that monopsony power “is not a realistic concern in this context.” Company asked Commission to consider “pro-competitive benefits” associated with increased cable concentration and discounted “open field” approach to analyzing market, saying such examination looks exclusively at static subscribership when business changes constantly. Cablevision, in separate filing, said Commission should decline to adopt any channel occupancy rules and should relax its attribution rules so minority interests aren’t considered full ownership. NAB said Commission’s recent decision to reinstate single majority shareholder exemption (CD Dec 19 p1) should “remain the permanent policy.” Under exemption, broadcaster or cable operator isn’t considered owner of another company unless it holds 51% stake in that company. Viacom also weighed in on issue, saying that minority shareholders had “substantially less” influence than other corporate constituents. NCTA formally asked for FCC to open rulemaking on attribution rules (CD Jan 7 p8).

Concentration of cable MSOs has “reached extraordinary levels,” coalition of wireline and wireless companies said in joint filing. BellSouth, Qwest and others that want to compete against cable said dominant cable operators could refuse to sell their programming to competitors that don’t yet serve comparable “critical mass” of subscribers. Those comments came in separate but related FCC proceeding in which Commission is considering whether to allow ban on exclusive contracts for vertically integrated cable programming to sunset in Oct. Siding with phone companies were DBS providers DirecTV and EchoStar, which argued, not surprisingly, that ban is “key factor” in maintaining viability of competition against cable.

American Cable Assn. (ACA), coalition of small and rural cable operators, also favored extending ban but said abuses of market power by both broadcasters and satellite programmers warrant expanding program access protection. Small market cable operators “require the continued protection” of ban on exclusivity to stay in business, Assn. said. “For ACA members, program access represents the most critical and threatening aspect to their cable businesses,” filing said. Assn. asked FCC to investigate what it called abuse of market power in retransmission consent by network owners and their satellite programming affiliates.

Exclusivity ban should sunset because DBS is such strong competitor and already-robust competition to cable is only “expected to intensify” in future, NCTA said in its filing on program access. Assn. called ban “a relic of a bygone chapter in cable regulation.” AOL Time Warner and Comcast were among those who filed in opposition to extending ban. Comcast argued that, not only is ban unnecessary, but DBS operators are using their own exclusive offerings to distinguish themselves from and compete against cable.