Lower Cable Leased-Access Rates Expected

In a move vehemently opposed by most cable operators, the FCC is expected to lower the rates that outside groups—such as low-power TV stations, local independent programmers or corporate-backed channels looking for a home—pay cable systems to run on unused channels.

According to a report in The Wall Street Journal last week, FCC Chairman Kevin Martin plans at the commission's meeting next week to reduce leased rates from 40 cents per month per subscriber to 10 cents, as part of his campaign to promote video competition for consumers and enable more media outlets for women and minorities.

The move is just the latest to irritate the industry, which has charged Martin with using a variety of means to force the industry into offering à la carte channel pricing for consumers. It's one of a number of rules that could come up at the hearing.

Independent programmers have long complained that cable operators have thrown up roadblocks to leasing access, from simply refusing to return phone calls, to demanding programmers lease channels across a large area (instead of just on a single local system, which would cost less). Programmers also say big cable companies have imposed onerous equipment demands on would-be lessees, exiled them to remote, high-numbered channels and refused to include program information about the leased channels on their electronic program guides.

Low-power, Class A, and translator TV stations generally don't enjoy must-carry rights and have also had problems getting onto cable systems, according to an FCC filing by the Community Broadcasters Association.

"Few lease access to cable channels because of prohibitive cost and terms and obstructionist behavior by cable operators," the CBA wrote. "These stations would be more likely to lease cable channels if regulatory relief were provided in this proceeding."

In particular, CBA recommended the FCC limit access rates to "reasonable levels," such as 5 percent of the lessees gross revenues, with a 2 cent minimum (per subscriber per month); ensure access to leased channels by local independent program producers; prohibit confidentiality agreements; require cable operators to list LPTV or Class A call signs in electronic program guides; and prohibit frequent changes in channel positioning.

Erik Hutchins, owner/operator of Park City (Utah) iNFO Channel (with local information on the resort town), said his battle with Comcast has lasted more than two-and-half years. In a filing with the FCC, Hutchins said Comcast initially wouldn't even meet to discuss leasing a channel, forcing him to hire a lawyer. Comcast forced him to furnish modulation equipment for five separate cable-zones, only one of which reached the intended Park City zone.

"We believe that most of our problems are due to the fact that our low-cost structure is a threat to the cable provider business model," Hutchins told the FCC.

Comcast and other operators have said the relatively small number of complaints on leased access show that the system does not need major reforms.

Comcast has also begun moving leased access channels to its digital tier. (The company has already said it would start eliminating channels on its analog package to make room for local HDTV carriage, which will be required in February 2009.) Comcast told the FCC that the move, to a place where more than half of viewers can still view it, is within the rules for leased access.