AT&T Wants FCC To Reconsider A Program Access Complaint Against Cox - Broadcasting & Cable

AT&T Wants FCC To Reconsider A Program Access Complaint Against Cox

Arguing that case does not hinge on the so-called terrestrial loophole, but instead on an FCC prohibition on anticompetitive behavior
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AT&T wants the FCC to reconsider its denial of a program access complaint against Cox in San Diego, arguing that AT&T’s case does not hinge on the so-called terrestrial loophole, but instead on an FCC prohibition on anticompetitive behavior.

It made that point in a filing last week at the FCC.

Back in March, the FCC denied AT&T's complaint.

The telephone company had said Cox's refusal to give it access to must-have San Diego Padres games on Cox-4, the cable operators news and sports channel, hampered AT&T's effort to get and keep subs for its competing U-verse multichannel video system. Cox countered that terrestrial programming was not covered, and even if it were, its conduct was not anticompetitive.

The FCC said that since Cox-4 was terrestrially delivered, it was beyond the FCC’s reach because of the so-called terrestrial loophole. While cable operators are required by law to provide nondiscriminatory access to "satellite-delivered" channels in which they own a financial interest---most cable channels are delivered via satellite to head-ends---the FCC has felt constrained by that language when it comes to complaints against terrestrially-delivered networks like some regional news/sports nets.

The issue has come up particularly with sports rights, since the FCC has said sports is the kind of must-have programming for which there is no easy substitute in terms of competition.

"Our prior decisions have refused to find the withholding of terrestrially-delivered programming a violation of [law]," the FCC's Media Bureau said in denying the complaint back in March. "Nor [in the past] has the Commission granted relief...under the theory that merely withholding terrestrial programming hinders or prevents the provision of satellite-cable programming."

The FCC also said that since it currently has an ongoing inquiry into whether it should close that loophole, it concluded that the rulemaking, not a ruling in the AT&T complaint, was the proper place to settle the argument.

AT&T says deciding this case would not "short-circuit" that rulemaking process, as Cox claimed, and that the precedent is not the terrestrial loophole issue but the FCC's finding in the multiple-dwelling units decision.

In that October 2007 ruling, the commission voted unanimously to nullify exclusive deals between cable companies and apartments and other multiple-dwelling units and to ban any such clauses going forward, calling them unfair competition.

In that decision, which the cable industry fought as anticonsumer and a spur to higher rates, the commission found that the exculsive contracts favored incumbent cable operators and impeded cable competition and broadband deployment, pointing out that some 25%-30% of Americans, or close to 100 million, live in apartments, condos or managed communities.

AT&T says that decision, which it raised in its complaint, is the one the FCC should pay attention to, but instead gave short shrift to in its March denial. "The Media Bureau rejected AT&T’s program access Complaint without addressing the principal argument on which AT&T relied." said AT&T in a filing supporting its request for commission review of the decision. "Although the MDU Order is the FCC’s most recent and comprehensive ruling on Section 628(b)’s scope*, the Bureau rested solely on earlier (and distinguishable) orders, and on its conclusion that the 'rulemaking process, and not the instant adjudication, [is] the correct forum' for addressing AT&T’s claims. Order. These errors necessitate reversal."

*Section 628(B) "prohibit[s] unfair methods of competition or unfair or deceptive practices that hinder or prevent any MVPD from providing satellite-delivered programming to consumers."

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