FCC retains cable program access

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In an era of increasing consolidation, the federal government appears to care
more about how media companies behave rather than how big they become.

The Federal Communications Commission voted Thursday to extend the life of
rules forcing cable conglomerates to sell programming to satellite-TV
distributors and other competitors for at least another five years.

Although the commission's decision was expected, the supporters' strong
endorsement for preserving the mandate was somewhat surprising given the
deregulatory leanings of the three-Republican majority.

The program-access rules, which cover programming networks owned by cable-system operators, were enacted by Congress in 1992 as a way to ensure that
competing businesses such as satellite TV and local cable overbuilders could
carry the kind of popular programs needed to attract subscribers.

Since then, cable's share of the pay TV market has dropped from 95 percent to
78 percent and direct-broadcast satellite has grown from scratch to roughly 18
million subscribers currently.

Congress said the mandate should expire Oct. 5 unless the FCC decided that market
conditions warranted their preservation.

Still, cable operators have sufficient market power to deny their programming
to competitors without threatening the viability of their networks, FCC
chairman Michael Powell said.

Multichannel TV "remains a phenomenally concentrated market," he added.
"While competitive developments has been healthy, they have not reached the
level to which one is confident that the opportunity to use program exclusivity
as a barrier of effective competition has been completely mitigated."

The FCC will reassess the market beginning in 2006 to determine whether to
extend them again. If cable has no power to deny programming to rivals, the rules
will sunset one year later.

Republican commissioner Kevin Martin and Democrat commissioner Michael Copps backed preservation of the
rules, too.

Republican commissioner Kathleen Abernathy, however, voted to do away with the access
mandate. "Increased competition in both the video-distribution and programming
markets renders the ban on exclusive agreements no longer necessary," she said.
Without the mandate, cable programmers will have more incentive to develop new
content, she added.

The cable industry pushed to kill the mandate, whereas satellite distributors
and public advocates called for its retention.

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