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Pending Program Access Item Draws Crowd - Broadcasting & Cable

Pending Program Access Item Draws Crowd

Industry players make last ditch pitches as vote nears
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It has been rush hour at the FCC in the past 10 days as the commission
prepares to vote on sunsetting the program access rules' ban on exclusive
contracts between MVPDs and their co-owned networks.

Following reports that the chairman had circulated such an
item last week, FCC officials said they were flooded with requests for
meetings, which was confirmed by ex parte notices in the FCC docket. The
commission has until Oct. 5 to vote or the rules sunset, though various
commission sources said they did not expect a vote this week given that the
incentive auction framework notice, scheduled to be voted on Friday (Sept. 28),
was occupying a lot of time and attention.

On Monday, more than a dozen representatives of the Sports
Fan Coalition, Public Knowledge, DirecTV, Dish, AT&T and Verizon met with
staffers at the Media Bureau and general counsel's office asking them to retain
the ban in general, and if not, at least for "non-replicable"
programming like regional sports networks.

They argued that the legal case for retaining the rules
remains strong. According to FCC sources, the chairman's item relies in part on
the D. C. federal court of appeals suggestion in denying a Cablevision
challenge to the rules that the next time they came up for review -- they
sunset Oct. 5 unless the FCC renews them- -t he FCC might allow them to sunset
if the market continues to be more competitive.

But the groups point out that was dicta -- not part of the
official ruling -- and say that even the dissenting judge in the decision
conceded that a targeted ban on exclusive contracts for regional programming, like
the sports nets, could be justifiable.

The program access order anticipates being able to deal with
discriminatory contracts with an existing prohibition on unfair practices
(section 628[b]), the same provision it used to close the terrestrial
loophole/exemption, through which the exclusivity ban does not apply to
terrestrially-delivered networks because the statue referred to
"satellite-delivered" programming.

On the same day that group was meeting with bureau staffers,
representatives of the National Cable and Telecommunications Association were
meeting with aides to a number of commissioners, arguing that the exclusivity
ban was ripe for removal given the "robust and irreversible competition
that characterizes today's video marketplace." NCTA said the ban needed to
go in its entirety, with no carve-out for "supposedly 'must-have'
programming."

It pointed to 628(b) as being sufficient to handle
complaints on a case-by-case basis, rather than the "prophylactic
prohibition" of a ban.

Also making the rounds at the FCC on Sept. 24 was Walter
McCormick, head of US Telecom, making his pitch from retaining the ban, tying
access to programming to broadband deployment, one of the hottest, hot-button
issues at the FCC as it tries to meet the president's goals of universal
access.

Cox, in meetings Sept. 21, took the opportunity to reiterate
its pitch that the FCC open a proceeding on volume discounts secured by the
largest cable operators. While Cox itself is the fifth-largest MVPD, according to
Time Warner Cable at number four has almost three times as many subs and
Comcast five times as many according to SNL Kagan June figures.

"In today's marketplace, only a very small number of
MVPD's receive the largest volume discounts and even companies like Cox, with
nearly 5 million basic video subscribers, lack the leverage to obtain
comparable deals," the company said.

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