Sources: FCC Approves Program Carriage Standstill - Broadcasting & Cable

Sources: FCC Approves Program Carriage Standstill

Order grants interim carriage during adjudication of cable-network program-carriage complaints
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The FCC has finally voted out its program carriage order, which provides for granting interim carriage during the adjudication of cable-network program-carriage complaints, or true-up payments for nets that have never been carried, and sets deadlines for dealing with those matters. The FCC is expected to announce its decision on Friday.

Such a mechanism currently does not exist, and it can take years for complaints to grind through the regulatory sausage-making process.

The order also better defines what type of complaints are, or are not, likely to have merit, and setting up shot clocks for FCC action.

The Democrats all supported the order, while Republican Commissioner Robert McDowell is expected to have dissented in part, the part being the standstill agreement portion.  

The Democrats voted the item weeks ago, but McDowell had held off, getting an extension on his vote until Friday (July 29), after which it would simply have been considered adopted without him. McDowell had issues with the standstill and also wanted to give those who shared his concerns, like some cable operators, more time to discuss it with the chairman.

According to an FCC source familiar with the order, the standstill provision is not retroactive and would not apply to the Tennis Channel and Bloomberg program carriage complaints, both against Comcast, even if they were not ruled on until after the rules took effect and either were decided in favor of the plaintiff.

As reported in Multichannel News back in May, the item sets up a regime for granting interim carriage during the adjudication of MVPD program-carriage complaints, and sets deadlines for dealing with those complaints.

The item combines an order and a Notice of Proposed Rulemaking (NPRM), with the order containing the framework and legal analysis for imposing temporary standstills on existing contracts while program-carriage complaints are pending or compensation for noncarriage -- for example, a channel complaining that it couldn't get a contract in the first place citing discrimination according to affiliation. If such a complaint were upheld, there would be some form of "true up" payment for what the cable operator would have been paying if it had agreed to carry the network.

The order also clarifies the elements that a complaining party would have to offer up to make a prima facie case for a violation. For instance, it lays out what it considers an apples- to-oranges comparison of channels unlikely to prevail as discrimination according to affiliation, citing the example of a music channel targeting young people complaining that it is not carried, while a music channel owned by the distributor, but targeting an older demo, is carried.

Some cable operators had complained that the FCC lacked the authority to implement the standstill and would run into problems with the Administrative Procedure Act. According to an FCC source, the item was changed to address those criticisms and lay out a stronger case for why the FCC had the authority.

Part of the impetus for the order and notice is to weed out complaints unlikely to pass muster, and speed the resolution of those that would. The FCC has been under long-standing pressure from Congress to speed the resolution of carriage complaints, some of which have taken years to decide.

In fact, then FCC chair nominee Julius Genachowski told the Senate Commerce Committee during his confirmation hearings back in June 2009 that timely resolution of carriage disputes would be a priority. Committee chairman Jay Rockefeller (D-W. Va.) had complained that the FCC rarely resolved them in a timely manner.

"This will promote diversity in cable TV offerings by insuring that independent cable channels have a shot at getting carriage on large cable systems," said Media Access Project SVP and policy director Andrew Schwartzman in response to B&C/Multi's report that the final vote on the order had been cast. "It has been 19 years since Congress directed the FCC to stop cable operators from discriminating in favor of their own affiliates, but the FCC's lax enforcement has largely nullified the impact of the law.  These changes will not, by themselves, fix all the problems with a system dominated by a handful of cable operators, but it is certainly a welcome change all the same."

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