FCC Exclusivity Ban Sunset Draws Interested Stares

Rockefeller warns Congress might have to step in if anticompetitive behavior is spurred

By John Eggerton -- Broadcasting & Cable, 10/5/2012 4:12:17 PM

Stakeholders and interested spectators were quick to react Friday to the news the FCC had sunset the ban on exclusive contracts, including a warning from one powerful senator that he would be monitoring the marketplace.

Senate Commerce Committee Chairman Jay Rockefeller (D-W. Va.) said he was reviewing the action "very carefully."

"As recent hearings in the Commerce Committee have demonstrated, consumers still face ever-escalating rates and little power to address them," he said. "The program access rules were an integral part of Congress's attempt to promote competition and consumer choice in the 1992 Cable Act.  I appreciate that the FCC has put into place a process by which individual complaints can be brought against cable companies that lock up their programming. But if this new process does not deter anticompetitive behavior that harms consumers, Congress will need to consider whether it should restore appropriate safeguards."

Rockefeller's former top aide is FCC Commissioner Jessica Rosenworcel, who voted for the sunset, but also has concerns about insuring continued access to programming.

US Telecom, which had sought to retain the ban, said the move would make it harder for them to build out broadband, particularly to rural areas, because of the impact on the video service that that justifies those buildouts.

"While we appreciate the commission's willingness to make some changes to this order [the FCC added a shot clock to program access complaints, for one], today's action is likely to make it more difficult to build and operate broadband networks, especially in rural communities where revenues from offering competitive video services are essential in order to make a business case for broadband deployment," said USTelecom President Walter McCormick Jr.

"There is near universal agreement in the record in support of continuing the commission's long-standing prohibition on the ability of large cable companies to withhold critical programming as a tool for suppressing the ability of alternative providers to compete-including support from small cable companies, rural telephone companies, satellite providers and public interest groups."

Free Press Policy Director Matt Wood concedes the landscape has changed, but says those changes came as a result of the ban and getting rid of it could reverse those gains.

"This decision suggests that the competitive landscape has changed since the program access rules were adopted," he said. "That's true to some extent, but the choices we have in the market today emerged as a result of these very same rules. Getting rid of them or weakening them threatens to undermine that landscape, especially at a time when incumbent cable operators wield so much power over traditional pay-television services and online video options.

"We hope there will be some continued protection for cable sports programming and other must-have shows, which cable companies have so often denied to satellite customers in cities from Philadelphia to Portland. We also hope the Commission will use its general authority to prevent unfair practices by big cable when abuses inevitably crop up."

Rep. Ed Markey (D-Mass.), who had asked the chairman earlier in the week not to lift that ban, said he would also continue to monitor the FCC's decision with an eye toward protecting consumers.

"Although the Commission is putting in place new safeguards to substitute for the program access rules, it is unclear whether these requirements will provide consumers with the level of protection that is still needed in the video distribution marketplace," he said. "As the principal House author of the Cable Act of 1992, I believe that strong protections against anti-competitive behavior are still necessary, and I look forward to continuing to work to ensure that today's decision does not tilt the playing field against consumers and choice."