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Markey Asks FCC To Retain Ban On Exclusive Contracts

Rep. Tells Genachowski Rules Needed to Prevent Withholding of Sports, Entertainment Fare 10/02/2012 4:13 PM Eastern

Rep. Ed Markey (D-Mass.) has asked the FCC to extend the program access rules, which are slated to sunset Oct. 5 unless the FCC renews them.

According to a draft order circulated two weeks ago, FCC chairman Julius Genachowski is proposing to allow the access rules, which ban exclusive contracts between distributors and their vertically integrated networks, to sunset, handling those complaints via case-by-case application of a rule against unfair or deceptive practices that will remain on the books.

But Markey, in a letter to Genachowski Tuesday, wrote not extending that ban is still needed, that the largest cable operators remain powerful players, and that sunsetting the ban would be consumer unfriendly, pointing to the "costly and time-consuming litigation that would ensue in case-by-case adjudication of disputes in lieu of the current rules.

The FCC is expected to vote on the proposal Wednesday or Thursday.

"The largest vertically integrated cable companies remain powerful players in the marketplace, and recent mergers have depended their programming resources," he writes, pointing out that he was the "principal author" of the act.

“The sunset of the program access rules could lead to a new dawn of less choice and higher prices for consumers,” said Markey. “If we do not extend the program access rules, the largest cable companies could withhold popular sports and entertainment programming from their competitors, reducing the competition and choice that has benefitted consumers. I urge Chairman Genachowski and the FCC Commissioners to extend the program access rules that have helped to level the playing field in the paid television marketplace.”

Far from having outlived their usefulness, wrote Markey, "They remain a foundation for competition, and conditions in today's video marketplace necessitate their continuance.

Markey said that if the rules sunset, a vertically integrated company could deny competitors must-have sports programming. The FCC proposal is said to presume that withholding co-owned regional sports net programming would be presumptively in violation of that fair and deceptive rule, while the American Cable Association has suggested that should extend to national must-have sports programming as well.

But Markey noted that a case-by-case enforcement regime would not only invite time-consuming litigation, but might compel consumers to subscribe to big cable companies in order to get must-see sports and entertainment. "By the time these disputes conclude," he wrote, "competitors without access to such programming will have lost potential customers, frustrating competition and harming consumers. Instead, the far better approach is to maintain the current rules that require a vertically integrated cable company to demonstrate why the public interest would be served by an exclusive arrangement..."

September