Cable companies lose court challenge of FCC on channel access rules
A federal appeals court on Friday upheld the Federal Communications Commission’s proposed extension of a rule that prohibits cable operators from withholding content they own from competing providers of paid-television services, such as satellite or phone companies.
The two-to-one decision by the U.S. Court of Appeals for the District of Columbia represents a blow to cable operators which had argued that the rules were no longer necessary because of the rapidly changing market for subscription-based video services. Comcast, which has proposed a $30 billion merger with NBC Universal, had challenged the FCC’s rule along with Cablevision.
"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," Cablevision said in a statement after the ruling.
The FCC regards the so-called program-access rules as an important element in preserving competition in the market for television services. The agency had sought to extend the rules by five years, prompting the companies’ challenge.
Under the rules, cable operators must lease their most popular channels, such as sports and local news, to competitors. The policy stems from the 1992 Cable Act, which introduced the provision to encourage more competition from satellite providers and prevent cable operators from striking exclusive deals with content providers, therefore depriving new competition from the channels consumers wanted most.
“The commission’s program access rules have played a vital role in making diverse and attractive programming available to cable and satellite TV viewers,” said FCC Chairman Julius Genachowski in a statement. “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 merger of Comcast and NBC, currently under review by the FCC and Justice Department, would give the nation’s biggest cable operator and Internet service provider a vast selection of programming that includes movies, hit shows and popular television channels. Public interest groups said the transaction highlights the need for extending the program-access rules. Free Press said the extension will last two years and will prevent Comcast from withholding content from rivals.
Comcast chief executive Brian Roberts has promised lawmakers that the company would not withhold content and would abide by the program access rules.
March 12, 2010; 5:26 PM ET
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