The satellite TV industry has launched a behind-the-scenes campaign in Washington to persuade the Federal Communications Commission to give new life to a rule that requires the cable industry to sell programming to competitors.
Under the so-called program access rule, cable operators are specifically obliged to make satellite-delivered programming networks in which they have financial interests available on fair terms to competitors.
Networks covered under the program access rule include HBO and CNN, both owned by AOL Time Warner, and the Discovery Channel, part-owned by Cox and Newhouse.
Unless extended, the rule, which was originally authorized by the Cable TV Act of 1992, is slated to expire on Oct. 7, 2002.
But in a recent letter to FCC Chairman Michael Powell, Satellite Broadcasting and Communications Association President Charles Hewitt said the regulation continues to be needed by cable’s competitors.
Mr. Hewitt also said the access rule has been important to the development of the direct broadcast satellite service.
“Despite the gains DBS has made since its inception in 1994, cable nevertheless remains the dominant provider in the market,
delivering service to 80 percent of all subscribers to multichannel video program distributor [MVPD] services,” Mr. Hewitt said. “Though the market share of the DBS providers continues to grow, only 15 percent of MVPD subscribers receive satellite service.”
“Clearly, the rules governing program access remain critical to increasing choice and competition in the MVPD market,” Mr. Hewitt said.
In response, Dave Beckwith, a spokesman for the National Cable & Telecommunications Association, said, “In view of the success and continuing growth of DBS, with DirecTV and EchoStar now bigger than the third- and seventh-largest MSOs [multiple system operators], we believe that the exclusivity rules should be permitted to sunset in 2002.”
Despite the cable industry’s druthers, sources said FCC Chairman Michael Powell has already made clear that he wants to launch proceedings this year to consider whether to extend the access regulations.
The law doesn’t specifically direct the agency to launch the investigation. It only says the rules should expire 10 years after they were originally enacted in 1992 “unless the FCC finds, in a proceeding conducted during the last year of such 10-year period, that such prohibition continues to be necessary to preserve and protect competition and diversity in the distribution of video programming.”
Also in his letter to the FCC, Mr. Hewitt asked the agency to recommend that Congress amend the law to close a loophole that allows cable operators to duck access obligations by distributing regional sports networks and other programming through terrestrial networks instead of by satellite.