News

Martin Balks At 'Stay’ Bid

4/25/2008 8:00 PM Eastern

The cable industry should expect new leased-access rules to take effect late next month as Federal Communications Commission chairman Kevin Martin said last week he opposed a suspension while a court has the rules under review.

“I supported those rules and I think we should let them take effect,” Martin told a group of reporters at FCC headquarters last Thursday.

The new leased-access rates go into effect on May 31.

“I think our leased-access rules provided an easier opportunity for people with diverse programming to get that content on the cable platform,” Martin said.

The National Cable & Telecommunications Association last month asked the FCC to suspend the rules after it filed suit in federal court to block them.

The NCTA asked for the FCC to release a decision by April 11. When the agency didn’t act, the trade group went ahead and filed a stay request on April 22 in the 6th U.S. Circuit Court of Appeals in Cincinnati, an NCTA spokesman said last Thursday.

Independent programmers have a legal right to lease time on cable systems. Large-capacity cable operators need to set aside 15% of their channels for such programmers. Last fall, the FCC said it slashed rates by 75% and banned cable from charging anyone more than 10 cents per month, per subscriber.

But NCTA and various cable companies told the FCC that their review of the new rate formula adopted by the agency last November showed that in many cases, cable operators effectively would be giving away channels.

That, the NCTA added, could flood cable systems with a lot of low-value content in violation of the provision in federal law that says leased access rates shouldn’t “adversely affect the operation, financial condition or market development of the cable system.”

In its stay request at the FCC, the NCTA argued that “by purposely encouraging a flood of new commercial leased-access users, the new rules — and, in particular, the new rate formula — will irreparably harm both cable operators and cable program networks.”

Martin, a Republican, won the fight for lower leased-access rates with support from FCC Democrats Michael Copps and Jonathan Adelstein. But agency Republicans Deborah Taylor Tate and Robert McDowell opposed him.

Some in the cable industry thought they had a shot at an FCC stay after Verizon Communications, a traditional telephone company that has signed up about 1 million customers to its FiOS TV video product, also decided to take the FCC to court on leased-access programming rates.

Verizon hasn’t clashed with Martin as often as cable has.

September