NCTA: Government Has No Need to Step In to Spur Video Competition

Says FCC shouldn't give cable's satellite or telco competition an "unfair regulatory advantage"

By John Eggerton -- Broadcasting & Cable, 6/23/2009 10:48:36 AM

Reiterating that the video marketplace is "diverse, dynamic, and fiercely competitive," the National Cable & Telecommunications Association told the FCC again that the government has no need to step in to further spur video competition or give cable's satellite and telco competition an "unfair regulatory advantage."

That came in reply comments to the FCC's "annual" video competition report. Annual is in quotes because the FCC in January issued a three-years overdue report and is in the process of trying to catch up with the intervening years by collecting that data and input in order to roll the reports into one.

NCTA urges the commission to conclude in its video competition report that the goal of a "highly competitive video marketplace" has been achieved.

NCTA says the calls for access to regional spots nets by Verizon, AT&T and DirecTV on the grounds that the lack of that programming "rings hollow" given their increasing subscriber numbers "the facts dispel any notion that the lack of particular programming is impeding their ability to grow and thrive in the video marketplace," said NCTA.

Unlike satellite delivered programming, which cable programmers must make available to competitors on equal terms and conditions, the law does not require terrestrially delivered programming, like many regional sports networks, to be made available to the competition at all, at least by the FCC's reading of that law, which is currently under review by the commission.

"What is really in play," says NCTA, "is the desire of cable's competitors to unfairly benefit their businesses at the expense of competing cable operators by having the government interfere in
what is and should continue to be the subject of marketplace negotiations."

NCTA also tells the FCC that it was wrong to extend the program access conditions on satellite-delivered networks for another five years.

Addressing a parade of other proposals, NCTA said that there is no reason to adopt rules governing termination of video service, that cable should not be required to carry low-power TV stations, that the commission should not change the leased-access rate, and that it remains just as specious to invoke the 70/70 rule for more cable regulation as it was when the FCC tried to invoke it in the previous report.

That is the provision of the Cable Act that allows the FCC to come up with new regulations if cable systems with at last 36 channels reach 70% of households and 70% of the ones it does reach subscribe.

One of the hold-ups to the FCC's previous report was that the commission had tentatively concluded that regulatory threshold had been met, but based that on a single source of data, for which it was roundly criticized. The report concluded that the first prong of the test had been met, which the cable industry does not dispute, but it did not establish the second, which NCTA argues can likely never be met given the rise in competition.

The FCC has proposed collecting better data on which to make that determination, but NCTA says that good data already shows that cable subscribership to systems with 36 or more channels is only around 60% and not climbing.

NCTA also argues that even if it did somehow reverse that trend and meet the second part of the 70/70 test, that would only trigger modification of leased access rates, not some broader mandate for cable re-regulation.