The Federal Communications Commission on Thursday voted to continue requiring vertically integrated cable programming and cable companies to sell their content to satellite TV companies and to other competing providers at non-discriminatory prices, terms and conditions.
By a vote of 3 to 1, the FCC extended for five years the law that prohibits vertical-integrated media companies - such as AOL Time Warner - from discriminating against competing multichannel distributors. The decision will ensure that EchoStar and DirecTV can offer top programming, including everything from AOL Time Warner's HBO and CNN to Comcast's home shopping network QVC, among other offerings.
The FCC found that without the prohibition, vertically-integrated cable programmers/operators would still have the incentive and ability to favor their cable affiliates over competing cable and DBS providers.
The commission did acknowledge that the DBS market has dramatically increased competition in the multichannel market since enactment of the 1992 Cable Act, which contains the program access provision. But at the same time, few terrestrial competitors have surfaced to incumbent cable operators to the extent anticipated when the act was adopted, the commission said.
"This was a very close call," Commissioner Kevin Martin said before the vote. But he added that record supports extending the ban on exclusive contracts "to preserve and protect competition and diversity."
Commissioner Kathleen Abernathy disagreed. As she cast her dissenting vote, she argued that DBS competitors have grown in strength and no longer needed the law to level the playing field.
"When the ban on exclusivity was enacted, cable operators served over 95 percent of the market and DBS operators were just at the horizon offering service," Abernathy said. She pointed out that together, DirecTV and Echostar have about 18 million subscribers, and serve more than 18 percent of the market. Cable's market penetration has dropped to 78 percent.
"The ban the majority extends today is over-inclusive, inconsistent with today's marketplace, and no longer necessary as defined by the statute," Abernathy said. Congress wanted to "rely on the marketplace, to the maximum extent feasible to achieve the availability to the public of a diversity of views and information through cable television and other video distribution media."
Abernathy said she doesn't believe the FCC can prove the ban on exclusive agreements is more beneficial or desirable than relying on the marketplace.
But the commission found that programming affiliated with cable is some of the most popular content, and that the loss of even a small amount would harm a competitor's ability to gain subscribers.
"Just as the rules at issue here have made it possible for DBS to grow as a competitor to cable, the extension of this rule makes possible the growth of new competitors, building and protecting increasing competition in the market for video programming," said Commissioner Michael Copps.
From
SkyReport (Used with Permission)
