FCC bests TWC, NCTA in Second Circuit


GavelThe FCC’s ability to intervene in MVPD program carriage disputes was upheld at the appellate level, as the Court found that such intervention was not an assault of the First Amendment rights of program distributors. But it wasn’t a complete win for the Commission.

The issue dates back to the days when cable was just about the only MVPD in the game and, more to the point, the only game in town, since there was no appetite anywhere to have competing cable systems stringing up multiple wired circuits overtop one another.

That gave them the power to grant or deny any cable programmer access to their local service area. This was not a problem for the biggest program suppliers, but it was very much a problem for smaller services.

The problem was exacerbated as cable companies consolidated and developed every growing regional and national footprints, and expanded vertically by creating and distributing programs channels of their own.

The rules prohibit MVPDs from discriminating against independent suppliers, with alleged violations dealt with on a case-by-case basis.

The Court said that there that the First Amendment complaint from TWC and NCTA failed to hold water because the regulations were content neutral; in fact, the aim of the regulations gave MVPD subscribers access to more diversified viewpoints.

The second part of the challenge involved a standstill rule which required MVPDs to keep programming it otherwise might have cut on their channel lineups while a dispute was under FCC consideration. This was shot down because it was imposed by the FCC minus any precedent and without proper opportunity for public comment. However, the FCC has the opportunity to reinstate the rule after it has gone through a normal rulemaking procedure.

Acting FCC Chairwoman Mignon Clyburn stated, “I am pleased that the court of appeals upheld the Commission’s program carriage rules against constitutional challenge. As the Commission pointed out – and the court agreed in rejecting the cable industry’s arguments – these rules remain necessary to prevent anticompetitive conduct by video programming distributors, and they empower consumers to access a rich and diverse mix of programming. Although the court overturned the standstill rule on procedural grounds, it recognized that the Commission remains free to adopt the same rule in accordance with the requirements of the Administrative Procedure Act.”

RBR-TVBR observation: You’d almost think the FCC would be just as happy to be out of this. The issues presented in this are are usually thorny and subjective , and the proceedings complicated and lengthy.

By the time they get this issue completely sorted out, there is every possibility that technology will have rendered the question moot. If the internet eventually shoves aside cable and satellite as the prime distributor of programming one way or another, they will also lose their gatekeeper role.

But if that happens, you can expect that somewhere, somehow, a whole new class of gatekeepers will emerge to take their place.