The Federal Communications Commission has introduced a new rule to prevent cable-TV providers from suddenly removing video content produced by independent program vendors as a way to gain leverage in contract disputes. The goal is to ultimately benefit consumers by promoting competition and diversity in the video-programming and video-distribution market, the FCC said.
Released Monday, the FCC's order establishes the specific requirements and procedures under which the commission will consider requests for a temporary freeze of the price, terms and other conditions of an existing contract submitted by vendors seeking renewal. Consumer-advocacy organizations such as the Media Access Project reacted positively to the new procedure.
"This will promote diversity in cable-TV offerings by ensuring that independent cable channels have a shot at getting carriage on large cable systems," said Media Access Policy Director Andrew Jay Schwartzman.
Possible Financial Penalties
Although some cable providers have offered month-to-month extensions after the expiration of a carriage contract, the ongoing uncertainty had negative consequences for vendors. With cable providers now more likely to be content producers themselves, there is more incentive for them to favor their own content over that of independent producers, noted Commissioner Michael Copps.
"Modernizing these rules is essential to ensure that consumers have the ability to view a variety of diverse programming at the lowest possible cost, and hopefully to foster more independent production," Copps said.
Though the FCC previously had a complaint process for resolving such issues, it was widely criticized for being slow, impractical and unfair. "We have heard from members of Congress and independent programmers that clarity is needed for a more transparent process," noted Commissioner Mignon Clyburn.
The new deadlines for acting on program-carriage complaints will offer a greater element of predictability to programmers and operators awaiting a decision, Clyburn observed. "Further, in solidifying what a complaining party must demonstrate when claiming a carriage violation has occurred, the commission is seeking to make our evidentiary process clearer and more cogent," he explained.
Cable's Opposition
The U.S. cable industry is adamant in opposing the FCC's new standstill policy, which it said shows little regard for the limits of agency authority or constitutional rights, as well as a disturbing lack of appreciation of the potential impact of government intervention on consumers or the marketplace.
"We are profoundly disappointed not only in what the FCC did but how they did it," said National Cable & Telecommunications Association (NCTA) CEO Michael Powell. "Regrettably, we must now explore other avenues for redress."
In tandem with its new standstill policy, the FCC rolled out a proposed rule Monday under which the commission may decide to permit the award of damages to any programming vendor filing a complaint and able to demonstrate that its complaint resulted in retaliation by a cable-service provider. The FCC is also seeking comments on other proposed measures to preclude cable-TV operators from retaliating against complainants, such as defining such activities as "actionable as a potential form of discrimination."
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