FCC looks at la carte model for cable
Feb 1, 2006 12:00 PM, By Harry C. Martin
In testimony before a Senate forum on indecency issues in November 2005, FCC Chairman Kevin Martin decried the increasing coarseness, violence, profanity and sex on television. He opined that one solution would be for cable operators to offer a family-friendly programming tier. It would allow parents to buy a package that excludes channels with racy programming. Alternatively, the chairman suggested that programming channels should be offered for sale on a channel-by-channel, or à la carte, basis.
The à la carte debate
The chairman's suggestion is completely opposite from an FCC staff report released in 2004, which concluded that à la carte is not economically feasible and could lead to higher prices and fewer programming choices for consumers. In his testimony, Martin disavowed that earlier report and said the FCC's staff would issue a corrected report in support of à la carte.
With his elevation to chairman, Martin is now in a position to direct the staff to take a more thorough look at the issue. The resulting new initiative is being used as a vehicle to promote Martin's long-expressed desire to clean up cable programming through the creation of family-friendly programming tiers.
Cable MSOs, satellite operators and cable programming networks have vehemently opposed à la carte requirements, insisting that an à la carte approach would lead to higher prices as channels raise fees to recoup lost audience reach and reduced ad revenues. The industry also claims that niche and new programming channels would fail en masse because large audiences would refuse to pay for channels that they have never heard of before. Moreover, cable operators and programming providers' agreements with one another often guarantee placement of certain channels on programming tiers that are available to the widest possible number of households.
While the FCC has not yet opened a proceeding to deal with the issue, the mere threat of an à la carte-friendly report has started producing the desired results from the cable operators. According to a cable industry representative, several major cable companies, including Comcast, Time Warner and Insight, plan to start selling family tiers over the next several months. The details of how these tiers will be structured and what channels will be included remain uncertain.
Clearing roadblocks to local cable competition
The commission has initiated a rulemaking to establish standards for preventing local franchising authorities (LFAs) from unreasonably refusing to award cable franchises to competitive entrants. The Notice of Proposed Rule Making (NPRM) seeks to further the FCC's interrelated goals of enhanced cable competition and accelerated broadband deployment and is responsive to recent initiatives by Verizon and AT&T to provide competitive video services.
In the NPRM, the commission tentatively concluded that the underlying section of the Communications Act — Section 621(a)(1) — should be interpreted to prohibit more than just the ultimate refusal by an LFA to award a franchise. The FCC believes that it has authority under the act to ensure that local franchising processes do not present unreasonable barriers to entry for competitive cable operators.
The commission also tentatively concluded that any law or regulation of a state or LFA that causes an unreasonable refusal to award a competitive franchise is deemed pre-empted and superseded by Section 621(a)(1). For instance, local standards requiring build-outs in low-income areas on unreasonably tight schedules would be subject to challenge under the proposed rules. But the commission's rules would not restrict LFAs from requiring new entrants to provide a reasonable complement of public, educational and government access channels.
Harry C. Martin is the immediate-past president of the Federal Communications Bar Association and a member of Fletcher, Heald and Hildreth.
Dateline
April 1 is the deadline for television, LPTV, Class A and TV translators in Texas to file their 2006 renewal applications.
April 1 is the deadline for Texas TV stations to file, along with their renewal applications, their biennial ownership reports and EEO program reports. Class A TV stations in Texas must file EEO program reports with their renewals, but not ownership reports.
April 1 is the deadline for TV stations in Delaware and Pennsylvania to file their 2006 biennial reports.
April 1 is the start date for pre-filing renewal announcements for television stations, Class A stations and LPTV stations that originate programming in the states of Arizona, Idaho, Nevada, New Mexico, Utah and Wyoming, in anticipation of a June 1 renewal filing date.
Send questions and comments to: harry.martin@penton.com
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