03.12.2010 02:05 PM
Court Upholds Program Access Rules
federal appeals court today determined that cable TV operators must continue
sharing channels they own with other providers. The U.S. Court of Appeals for
the D.C. Circuit voted 2-1 to uphold the Federal Communications Commissions
program-access rules. The FCC renewed the rules for five years in 2007.
Cablevision took the FCC to court last year over the statute.
The cable operator charged that the FCC misinterpreted the spirit of program
access, that the extension was arbitrary and capricious and that it violated
the First Amendment.
“We hold that the commission’s interpretation of its statutory mandate was
reasonable,” Chief Judge David Sentelle wrote in the majority opinion.
Program-access rules require cable operators to make programming they own
available to competing carriers. The topic is an especially hot potato now that
Comcast is negotiating federal hurdles to acquire a majority share of NBCU. The
merger will make Comcast the first pay TV provider to have control of a
broadcast network, in addition to the stable of cable networks it will add to those
it now owns. Lawmakers have grilled Comcast and NBCU executives on Capitol Hill
about continued access to those networks by competing providers. It’s of
particular concern to smaller operators, like those represented by the American
The court inferred that program-access rules would one day be obsolete. It
noted that in 2007, there were 531 national networks, up from 294 in 2002 and
68 in 1991. “The percentage of those networks that were vertically integrated
decreased to 22 percent from 35 percent in 2002, and 57 percent in 1992.”
Pay TV distribution is likewise changing. Cable operators now have a 67 percent
market share, down from 78 percent in 2002 and 95 percent in 1992. Direct
broadcast satellite now has 30 percent versus 18 percent in 2002. TelcoTV too,
is finally making inroads.
The ACA nonetheless said program-access rules were not only necessary, but the
current ones inadequately protect small competitors.
“We maintain that the current program-access rules are demonstrably ineffective
for competitive pay-TV content buyers because they permit rampant, unjustified
price discrimination,” the ACA said in a statement. “Moreover, the rules fail
to provide for an automatic right to continued carriage during the pendency of
a complaint, and do not offer any rate-setting mechanisms.”
Congress first prohibited exclusive contracts for TV channels in 1992.
Lawmakers were concerned that cable operators would withhold popular channels
from competitors and create monopolies. The statue required the FCC to review
the rules every 10 years. The FCC issued a five-year extension in 2002 and
again in 2007 when four cable operators owned six of the top 20 national cable
networks and half of the regional sports channels.
FCC Chairman Julius Genachowski issued the following statement regarding the
court’s decision: “I’m pleased that the D.C. Circuit court has confirmed the commission’s
authority to prevent vertically integrated cable companies from denying
critical television programming to their competitors and consumers.”
Judge Thomas Griffith concurred with Sentelle on the decision; Judge Brett
Kavanaugh dissented on First Amendment grounds.
“The Supreme Court has repeatedly ruled that video programming
distributors--such as Comcast, DIRECTV, DISH, Time Warner, Cablevision,
Verizon, and AT&T--and video programming networks--TNT, ESPN, Fox News,
MSNBC, and several hundred others--are editors and speakers protected by the
First Amendment’s guarantees of freedom of speech and of the press.”
SCOTUS precedent provides for content-neutral regulations only if it promotes
an “important” or “substantial” government interest, and only to the extent
that it does so.
Kavanaugh said the FCC program-access rules fail because they serve no
government interest and apply only to cable operators with “attributable
interest in a programming network.”
He said it was understandable that the FCC wanted to ensure that consumers
access to the programming they wanted. But that “governmental desire that every
programming distributor carry the same networks can no more justify
interference with Cablevision’s First Amendment rights than it could justify the
government telling Barnes & Noble what publisher’s books it had to sell.”
“I readily concede that the First Amendment rights of a Cablevision or ESPN do
not tug at the free speech heartstrings in the same way as the iconic political
protester who lies at the core of the First Amendment. But if video programming
distributors are like bookstores and movie theaters and newsstands--and the
Supreme Court has repeatedly and emphatically said they are--we cannot brush
aside the vital First Amendment interests at stake here.
Cablevision asked that TVB
include the following statement in response to media inquiries regarding the
“Like the must carry and retransmission consent regime that allowed ABC to
blackout the Oscars for 3 million New York households this week, the program
access rules are based on an outdated and obsolete view of the competitive
landscape. In today’s highly competitive video marketplace these rules do
nothing but tilt the playing field in favor of phone companies and broadcasters
to the detriment of fair competition and consumers.”
Deborah D. McAdams
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