FCC Adopts Dual-Carriage, Program-Access Items

Federal Communications Commission Extends Program-Access Rules Five Years, Imposes Dual Carriage on Cable Operators
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The

Federal Communications Commission

voted unanimously -- with some partial dissents -- to extend the

program-access rules

for five years, to toughen its program-access-complaint process and to mandate that cable make must-carry TV stations' digital signals viewable to all customers, analog and digital, after the

Feb. 17, 2009, switch to all-digital broadcasting

.

But talk about 11th-hour decisionmaking: That relative unanimity was hard-won, coming after a delay of more than 11 hours, with Tuesday's 9:30 a.m. meeting finally beginning at 8:40 p.m.

FCC chairman Kevin Martin apologized for the delay and attributed it to achieving compromise on key issues. Among those key issues were the proposed changes to cable program-access rules and mandated cable carriage of TV-station signals after the switch to all-digital.

"I do think that it is important for the commission to always try to strive to work together to find compromises whenever possible," he said, "and I think that the benefits of those compromises I hope outweigh the inconveniences it may cause occasionally," adding that this would be the case with Tuesday's delay.

That compromise appeared to include separating out some contentious proposals into separate inquiries, which essentially allowed the commissioners to defer a decision on those until a later date.

In order to ensure that all must-carry TV stations are viewable by all subscribers after the switch to all-digital broadcasting, cable operators will be required, in addition to carrying digital signals, to convert digital signals to analog, either at the headend or with converter boxes, for their analog cable customers. Cable had called that a "dual-carriage" mandate at odds with earlier FCC rulings, while broadcasters had framed it as a clarificaiton of the existing "viewability" mandate.

The commissioners framed it as addressing the viewing needs of analog cable viewers, just as it is working to ensure that no analog broadcast customers lose their pictures.

Whatever you call it, cable operators must carry broadcasters' HD signals in HD, and in at least as high a resolution as they carry other programming, which is to ensure that cable operators do not favor their own HD programming over that of broadcasters.

The FCC set that mandatory carriage requirement to sunset in three years, mirroring a voluntary three-year carriage agreement the cable industry was reportedly ready to offer up. But it also said that it would review the state of cable's transition from analog to digital before that 2012 date to see if the the requirement should be extended and it would entertain waivers for smaller cable operators, which would be harder-hit by the financial and technical burdens of the carriage requirement.

But in a victory for cable in general, the commissioners did not require cable systems to carry "all bits" that a broadcaster delivers, as had been initially proposed as a tightening of the mandate that cable not "materially degrade" the broadcast signal. Broadcasters had pushed for the "all bits" change to the degradation definition.

That definitional change would have put a big crimp in cable's ability to use compression and switched-digital techniques to help make room for both braodcast signals that met the FCC's current requirements of "no material degradation" and still have bandwidth to provide the broadband services the FCC is trying to encourage.

"We are pleased that the FCC’s action today adopts cable’s carriage plan," National Cable & Telecommunications Association president Kyle McSlarrow said of the FCC decision, "and we are pleased that the FCC dropped an ill-considered mandate that would have turned back the clock on decades of digital technology innovation. We continue to urge the FCC to act quickly to take into account the special circumstances of very small systems and to make clear that those systems have the flexibility to serve all of their customers without a one-size-fits-all mandate.”

The commission put off to separate inquiry questions on whether to extend the viewability mandate to stations that elected to negotiate cable carriage rather than just those that elected must-carry.

On the program-access front, the commissioners, as expected, extended the program-access rules for another five years, concluding that cable operators still had the ability and incentive to favor affiliated cable programmers by denying programming to competitors, like satellite companies.

The FCC also took steps to tighten the program-access-complaint process.

Those changes included requiring the subjects of program-access complaints to turn over documents directly to the opposing party without FCC mediation. Commission Democrats Michael Copps and Jonathan Adelstein both argued that this was opening up the discovery process too far, although Copps added that if the commission was going to make the objects of complaints produce more documents, it should do the same for other complaints, like challenges to TV-station-license renewals.

The commission put off for another day the more contentious proposal for making baseball-style arbitration (in which each party submits a best final offer) part of the program-access-complaint process, although it did make voluntary arbitration an option, with the FCC suspending any action on the complaint during that arbitration. The inquiry will also look into whether to extend the prohibition on exclusive contracts to terrestrially delivered programming services.

The rule only applies to satellite-delivered services, which left a loophole for regional sports networks. The commission also wants to know whether programmers have been moving to terrestrial delivery as a way to bypass the program-access rules.

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