Prior to the decision made by an administrative law judge and affirmed by the FCC on a partisan basis, House Commerce Committee leaders Fred Upton (R-MI) and Greg Walden (R-OR) asked the FCC not to do what it eventually did.
The two wrote a letter to FCC Chairman Julius Genachowski on the topic, which was signed by a number of their colleagues.
The duo wrote, “This is a much different market from 1992 when Congress first enacted the program carriage provisions. Those provisions restrict the ability of cable operators to freely negotiate with unaffiliated cable programmers. That may have made sense in 1992 when cable dominated the pay-TV market with regard to both distribution and programming. Today’s market is much more competitive in both respects. The FCC’s rules should reflect those changes rather than expand the reach of regulations that have outlived their purpose.”
Upton and Walden concluded, “The FCC’s recent interpretation of the program carriage rules, however, could be read to enable programmers effectively to force their way on to a cable operator’s system by merely alleging that their programming is similar enough to the operator’s affiliated programming, rather than showing that there has been anticompetitive discrimination.”
RBR-TVBR observation: The issue of video programming is completely muddled at the moment, in large part because the largest players have stakes on both sides of the programming and distributing dividing line.
For starters, while it is true that cable has a lot more competition at the moment than it used to, it’s not like a consumer can simply get mad and switch to one of the competitors. Subscriptions have terms woven into them, and new equipment must be procured and installed before that can happen. We’re also not sure how viable an alternative internet sites are at this point – we don’t find them to be an alternative at our household right now.
While Upton and Walden are correct when they say that programmers can use Tennis Channel tactics to try to “force their way” on to a cable system, it is equally correct to say that a cable system facing no enforcement of rules designed to protect against the potential abuse of vertical integration can discriminate against independents with impunity. And cable still owns 60% of the market, so if it improperly denies access, it is in fact harmful to the indy channel.
We don’t know what the right answer is, but we suspect it will contain an element of a la carte in it before this is all over. Case in point – I watch MASN, a regional channel that brings the Washington Nats down here to the RBR-TVBR Outer Banks Bureau. But if given the choice, I would not pay one penny for any of the channels involved in the dispute just adjudicated at the FCC.
Versus, Golf Channel, Tennis Channel? You can keep them all — I do not watch any of them. The last time I bought something from the local newsstand, I did not have to buy three publications along with the one that I wanted, and as costs go up, more and more people are going to seek control of their bill via the obvious tactic of paying only for what one uses.
One final point: While existing major stakeholders continue to battle this out, we will not at all be surprised if an internet solution eventually ravages them the same way it did the music industry.