Pai Proposes to Ax Part-Time Leased Access

Reg reform item draft to be released later today
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Ajit Pai

Making the same arguments he has made for deregulating broadcast ownership--changed marketplace, more video options--FCC chair Ajit Pai has signaled the FCC will try to loosen cable leased access rules.

Currently, cable operators with more than 100 channels have to set aside 15% of those channels for leased access, with smaller operators having to provide a smaller percentage.

Related: FCC General Counsel Touts FCC Deregulation Efforts

The FCC will release the draft of the leased access item later Thursday (May 16)--it voted to launch the review almost a year ago--but Pai signaled in a blog post that the FCC would be voting on loosening or jettisoning some of the regs. He likely has the votes of his Republican colleagues, which is all he will need.

"The glaring problem with our leased access rules is that they’ve been in legal limbo for over a decade and haven’t been updated to account for the transformation of the video marketplace," he wrote. "Programmers now have a wide range of options for distributing their content, including a plethora of online platforms, so the need for burdensome leased access rules have dramatically diminished. I’ve therefore provided my colleagues with an order that would modernize our regulations to better reflect today’s video marketplace. For example, it would eliminate the requirement that cable operators make leased access available on a part-time basis since there are plenty of other avenues for content creators to make available short-form programming."

That part-time change will be a welcome one for ACA Connects and NCTA-The Internet & Television Association, both of which had argued for it, saying that the part-time rules are a regulatory invention that imposes added costs for which cable operators are not always sufficiently compensated and that the diverse programming that additional burden was meant to generate is being taken care of by forces in a market "which is more competitive and diverse than Congress or the Commission could ever have imagined." Pai clearly agrees with that assessment.

The Commission updated the leased access rules in 2008 [under then-FCC chairman Kevin Martin], but the Office of Management and Budget never signed off on them, and a federal court put them on hold. which meant the FCC was still operating under rules from 25 years ago, Pai had previously pointed out in launching the review last May.

Cable operators had challenged that 2008 update in court given that it had slashed rates by 75% (cable ops viewed Martin as having a "vendetta" against the industry). NCTA argued at the time that the result would be shoddy programming that viewers would not want to watch and that, under the new rate, cable ops might not be compensated for at all.

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