Monday, March 15, 2010

FCC KO’s Cable Interests In DC Circuit Court


The FCC’s program access rules, which require cable companies to make critical must-have programming available to their competitors, were upheld in the Court of Appeals for the District of Columbia Circuit, a setback for plaintiffs like Cablevision and Comcast and a win for the FCC in a venue that has often called the Commission arbitrary and capricious.

FCC Chairman Julius Genachowski hailed the FCC win. “The Commission’s program access rules have played a vital role in making diverse and attractive video programming available to cable and satellite TV viewers,” he said. “I’m 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.”

The issue primarily revolves around regional sports networks, which often tie up play by play rights for key professional and college athletic teams, the lack of which on a channel lineup would be an instant turn-off for many potential subscribers.

The Commission actually beat the “arbitrary and capricious” rap directly. The Court’s Chief Judge David B. Sentelle wrote, “In these consolidated cases, Cablevision Systems Corporation and Comcast Corporation petition for review of the Federal Communications Commission’s decision to extend for five years a statutory prohibition against exclusive contracts between cable operators and cable affiliated programming networks. Petitioners assert that the Commission misinterpreted the plain meaning of the underlying statute. In addition, they argue the Commission’s decision was arbitrary and capricious and therefore violates the Administrative Procedure Act (APA). Lastly, petitioners claim the decision fails under First Amendment intermediate scrutiny.“

We hold that the Commission’s interpretation of its statutory mandate was reasonable. Because we also hold that the Commission’s decision satisfies arbitrary and capricious review, and that intermediate scrutiny is not applicable, we deny the petitions for review.”

Cablevision did not agree with Sentelle. The company issued a statement, saying, “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ABC to blackout the Oscars for 3 million New York households this week, the program access rules are based on an outdated and obsolete view of the competitive landscape. 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.”

RBR-TVBR observation: The real-life implications of this decision are difficult to guage. Just the day before the Court ruled, a Comcast competitor repeated testimony in Congress to the effect that access appeals are lengthy and expensive, making the process fairly useless.

Comcast, on the other hand, and whatever its true feelings about the access rules, has a conflict removed that had been troubling many legislators. It has said it would provide access to its programming regardless of the outcome of the court case, even while supporting the Cablevision-led court action.

This caused no end of consternation for many legislators, who at numerous Hill hearings have been free to accuse Comcast of saying one thing and doing another. This at least relieves Comcast of that conflict.

See the entire court decision here:

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