MVPDs’ First Amendment Rights, OVD Access to Content Debated on Program Carriage

Six cable programmers allied to oppose expanding the definition of what types of pay-TV providers are considered affiliated with channels, or to put online video under the rules. Filing replies to a commission rulemaking notice in docket 11-131 (http://xrl.us/bmojgi) as “content interests,” the programmers asked the agency to “decline to consider the proposal of a single set of comments that advocates for expansion of the program carriage regime to include online video content.” The filing (http://xrl.us/bmojg5) by CBS, Disney, News Corp.’s Fox, Comcast’s NBCUniversal, Time Warner, Viacom cited initial comments by the Media Access Project and Public Knowledge (CD Nov 29 p13). Those nonprofits’ proposals have “no basis” in Section 616 of the Communications Act or the rulemaking notice itself, the companies said. “Setting aside these statutory and procedural concerns, the Commission must generally refrain from any premature intervention that may skew development of this nascent and rapidly-evolving ecosystem."

The rules are “far from threatening First Amendment rights,” said Media Access Project and Public Knowledge (http://xrl.us/bmojg9). “The Commission is well within its rights, and only can meet its duties, by taking further actions to discourage and ameliorate the harms posed by discrimination against unaffiliated networks, in its many forms, and nurture emerging competition from online video distribution models.” It’s in the interests of MVPDs to “stifle or control the nascent online video market before OVDs have a chance to become robust competitors,” the groups said. “If the company has enough buying power to choke off the new competitors’ inputs, as the largest MVPDs do, the incumbent will never need to compete with new market entrants. So, to avoid competing with OVDs, MVPDs can use their negotiating leverage to restrict new online video offerings in any number of ways: preventing programmers from providing video to OVDs at all, requiring exclusivity in online distribution, or placing unreasonable delay or conditions on online distribution. Indeed, these are the types of provisions that MVPDs currently attempt to secure over the course of negotiations with independent programmers."

The market is “competitive,” NCTA and Comcast each said. Comcast said the two nonprofits offered “no credible legal support” for expanding program carriage rules under Section 616 as the rulemaking proposed. “The vast majority of the Notice’s proposals are not only unnecessary and antithetical to competition, but their adoption is also beyond the Commission’s authority under Section 616 and the Administrative Procedure Act” and “would infringe upon MVPDs’ First Amendment rights,” Comcast said earlier in its replies (http://xrl.us/bmojhy). “There is no valid need for regulation -- much less expanded regulation -- in this area.”

"Tellingly, Comcast struck deals with and currently carries every one of the programmers that claims more regulation is needed to protect them -- Bloomberg, Crown Media (Hallmark), Current TV, GSN, HDNet, MASN, NFL Network, and Tennis Channel,” said the cable operator. The companies seeking rule changes want government help to get “more carriage and opportunities than might otherwise be available in the highly competitive video marketplace,” NCTA said (http://xrl.us/bmojii).

The U.S. Court of Appeals for the D.C. Circuit in 1996’s Time Warner Entertainment v. FCC case, and a ruling involving TWE four years later, show the commission can expand the rules, indie programmers said in various replies. “The program carriage rules prohibit MVPDs from discriminating on the basis of a network’s affiliation or ownership, not on the basis of its content,” said (http://xrl.us/bmojp7) Current TV, NFL Enterprises and the Tennis Channel. “The mere fact that the Commission may consider the extent of competition among networks to determine whether they are similarly situated in the marketplace does not make the program carriage rules content-based.” Section 616 “clearly” gives the commission authority to award damages to indies that are discriminated against, Bloomberg said (http://xrl.us/bmojp3). Like the Tennis Channel, Bloomberg has a pending FCC programming complaint against Comcast. “To accept the MVPDs’ First Amendment arguments on this matter is to concede that the Commission has no authority to enforce its own rules at all in this area."

Both major U.S. DBS companies opposed expanding program carriage rules. Several of the discussed changes pose serious threats to MVPDs’ editorial privilege and therefore First Amendment rights, DirecTV (http://xrl.us/bmoi8g) said. “These constitutional considerations provide a crucial lens through which the Commission should evaluate any proposed revision to the program carriage regime.” To “dramatically expand” the FCC concept of retaliation to include “adverse decisions related to a programmer that has filed a compliant” would hurt MVPDs’ ability to exercise editorial discretion, said DirecTV. Such a change would mean any decision not to carry an affiliate of a network that had filed a past complaint would open a pay-TV provider to litigation and second guessing, it said. Requiring carriage during an interim review period would also infringe on the MVPD’s editorial discretion, even if monetary costs are repaid if a carriage decision is overturned, said DirecTV.

Dish Network said affiliation rules shouldn’t be interpreted to prevent discrimination based on affiliation or non-affiliation with another MVPD. The commission currently applies program carriage regulations to a cable operator’s decisions on carrying an indie when that channel has similar content to a network owned by the operator. The agency shouldn’t make rules from “unsupported speculation that a satellite carrier would entertain the idea of favoring a cable-affiliated programmer in hopes that the programmer’s cable affiliate will in turn favor a satellite-affiliated programmer,” Dish (http://xrl.us/bmoi92) said: Such collusion wouldn’t make sense for a distributor “whose programming interests are minimal.”