ACA: Program Access Rules Remain Vital

FCC should close "loophole" that allows programmers to overcharge for content
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The American Cable Association told the FCC on Monday that
its program access rules continue to be a "vital" way of preserving
competition, and need to have even more teeth put in them.

In reply comments on the FCC's review of those rules, ACA
says that other cable operators have it wrong when they argue that there is no
longer a need to ban exclusive programming deals between vertically integrated
programmers and their affiliated operators.

"The Commission's own data shows that the number of top
20 satellite delivered national programming networks, and regional sports
networks (‘RSNs') controlled by cable-affiliated programmers actually increased
between 2007 and 2011," ACA said. "This demonstrates that the ability
of cable-affiliated programmers to disadvantage competitors of their cable
operator affiliates has, if anything, increased since the last sunset
review."

The FCC has to periodically renew the program access rules
or they sunset automatically.

ACA diverges from the National Cable &
Telecommunications Association on the sunsetting of the provision. In its
comments in June, NCTA said the FCC should allow the rules to go away, citing
vigorous and robust competition and arguing that vertical integration is no
longer a threat.

ACA not only says the rules should stick around but adds
that the FCC should modify them "so that unaffiliated MVPDs will have the
full range of protections that Congress intended, whether they purchase
programming directly or through a buying group." It says the rules allow a
vertically integrated programmer to charge inflated fees to affiliated and
unaffiliated MVPDs because the former is just an internal transfer of funds.

The FCC voted in 2007 to extend the rules five more years,
with the deadline for renewal coming up in October of this year. Without that
renewal, the rules sunset per congressional directive.

The program access rules require that cable operator-owned
programming networks be made available to satellite and wired competitors.

In 2010, the U.S. Court of Appeals for the D.C. Circuit
denied a Cablevision challenge to the program access rules, saying that the FCC
had not been arbitrary and capricious to renew the rules in 2007, but also
saying that by the 2012, it might be time for the ban on exclusive contracts to
end.

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