D.C. Circuit Affirms FCC Program Access Rules

FCC program access rules withstood Cablevision’s legal challenge. The U.S. Court of Appeals for the D.C. Circuit Friday denied the company’s petition to throw out the rules barring cable operators from withholding programming networks they own from competing distributors. “We will not substitute our judgement for the agency’s, especially when, as here, the decision requires expert policy judgement of a technical, complex and dynamic subject,” Chief Judge David Sentelle wrote. Judge Brett Kavanaugh dissented.

FCC Chairman Julius Genachowski is “pleased that the D.C. Circuit court has confirmed the Commission’s authority to prevent vertically integrated cable companies from denying critical television programming to their competitors and consumers,” he said in a written statement. The rules have helped bring “diverse and attractive” programming to cable and direct broadcast satellite viewers, he said.

Cablevision’s First Amendment arguments against the rule failed to compel the court, Sentelle wrote. “Petitioners failed to make a specific, as-applied challenge that distinguishes their current arguments from the one we already rejected in the facial challenge in Time Warner,” an earlier challenge to the program access rules, he said. Though the cable market has changed since the rules were adopted, the changes have been mixed, he said. “While cable no longer controls 95 percent of the MVPD market, as it did in 1992, cable still controls two-thirds of the market nationally.” In areas where operators have large clusters of systems, competitors are even less successful in gaining market share, he said.

Kavanaugh disagreed. “Cable operators no longer posses bottleneck monopoly power in the video distribution market, a point we made rather emphatically a few months ago,” in its Comcast v. FCC ruling, he said. “The FCC’s exclusivity ban thus is no longer necessary to further competition,” and violates the First Amendment, he said.

Cablevision said it’s considering its options in light of the ruling. “Like the must carry and retransmission consent regime that allowed ABC to blackout the Oscars for 3 million New York households this week, the program access rules are based on an outdated and obsolete view of the competitive landscape,” it said. “In today’s highly competitive video marketplace these rules do nothing but tilt the playing field in favor of phone companies and broadcasters to the detriment of fair competition and consumers."

Verizon and Media Access Project praised the decision. Verizon called it a win for consumers and “new providers who are bringing new and better choices to the marketplace.” Free Press highlighted the problems it sees with Comcast’s proposed acquisition of NBC Universal. “When Comcast promises to abide by the program access rules, regulators should remember that this important rule sunsets in two years,” said Corrie Wright, Free Press policy counsel. “The FCC should consider extending the exclusive contract ban once it expires, as well as adopt wholesale reforms to the program access."

Comcast said it’s glad that the court recognized the changes to the pay-TV market that have occurred since 1992. But “we're disappointed that the court has preserved the current unfairness that allows DirecTV to have exclusives for NFL Sunday Ticket … while restricting the exclusives that cable operators may have,” the cable operator said. “And we said as recently as [Thursday], however the court decided on these rules, we remain prepared to discuss with the FCC having them continue to apply to Comcast as part of the NBCU transaction if appropriate.”