The Federal Communications Commission voted 3-1 last week to extend its cable access regulations for five years.
Under the rules, cable operators are required to sell their satellite-distributed programming to competitors. Without FCC action, the regulations, mandated by the Cable Act of 1992, would have expired Oct. 5.
The cable TV industry argued long and hard that competition from direct broadcast satellite operators and other services eliminated the need for the rules.
But FCC Chairman Michael Powell disagreed, noting that cable still has 78 percent of the market for multichannel TV. “Seventy-eight percent remains a phenomenally concentrated market,” Mr. Powell said.
FCC Commissioner Michael Copps, the agency’s sole Democrat, seconded the chairman’s opinion. “The extension of this rule makes possible the growth of new competitors,” Mr. Copps said.
Also voting for the regulation was FCC Commissioner Kevin Martin, although he admitted the decision had been a close call. “The record does support the order’s conclusion that the prohibition against exclusive contracts continues to be necessary to preserve and protect competition and diversity,” Mr. Martin said.
In her dissent, FCC Commissioner Kathleen Abernathy said she would have axed the rule. “Removing this artificial regulatory constraint will foster more rigorous competition and diversity in the programming and video delivery marketplace,” Ms. Abernathy said.
In a statement, the National Cable & Telecommunications Association said eliminating the rule would have “restored balance in allowing limited exclusivity to be used to differentiate competitive offerings.”
DirecTV said, however, the decision would preserve “competition and diversity in the multichannel TV marketplace.”
A coalition of key lawmakers led by Sen. Ernest Hollings, D-S.C., recently urged the agency to consider expanding the rule. But the FCC said it lacked authority to extend the regulation to terrestrially delivered programming and cable networks that aren’t owned by cable operators.
Nonetheless, Ken Ferree, chief of the FCC’s Media Bureau, said if cable operators shift programming from satellite to terrestrial delivery in an effort to protect it in a “deliberate evasion,” they could run afoul of agency regulations. FCC officials said the access rule would expire in 2007, unless the agency votes again to extend it.