Disney OK With Cable Regs

Mar 7, 2005  •  Post A Comment

In a move that puts it at loggerheads with other major cable television program distributors, The Walt Disney Co. last week aligned itself with industry critics urging federal lawmakers to extend broadcast indecency regulations to cable.

The media conglomerate took the position in an effort to pre-empt the growing interest in Washington in a la carte, sources said.

Concern about cable programming is heating up on Capitol Hill because the basic-tier fare is regularly far edgier than that of broadcast, and cable’s programming is exempt from broadcast indecency prohibitions.

To give consumers added leverage over the programming coming into their homes, some industry critics, led by the watchdog Parents Television Council, have been lobbying lawmakers to clear the way for a la carte, giving subscribers the right to pick and pay for only the basic tier networks they want.

Other industry critics would simply subject cable to the same indecency restrictions broadcasters face, an approach that won enthusiastic public endorsements from Sen. Ted Stevens, R-Alaska, and Rep. Joe Barton, R-Texas, last week.

With the fate of its ESPN and other family-friendly basic cable networks such at The Disney Channel and ABC Family at particular risk under a la carte, Disney is promoting indecency regulation as the alternative of choice.

“It would be our hope that a common indecency standard for the expanded basic bundle would lessen the pressure to legislate on a la carte or tiering,” said Preston Padden, executive VP of worldwide government relations for Disney.

Disney’s pro-regulatory position on this issue runs contrary to that of the National Cable & Telecommunications Association, an organization in which Disney holds a membership.

Indeed, NCTA last week vowed to fight any effort to encroach on cable’s traditional programming freedoms.

“We believe any regulation of cable content raises serious First Amendment objections and will oppose efforts to impose regulation on cable programming,” said Brian Dietz, an NCTA spokesman. “As the U.S. Supreme Court has found, the subscription nature of cable service and the ability of cable customers to block unwanted programming through the use of tools offered by local cable systems strongly differentiate cable from broadcasting, which is distributed free and unfiltered over the air,” Mr. Dietz said.

Cable’s legal arguments against regulating cable’s programming for indecency drew an endorsement from Federal Communications Commission Chairman Michael Powell.

“It’s very likely unconstitutional,” Mr. Powell said in an interview with Fox News Channel’s Neil Cavuto last Thursday.

“When Congress takes a hard look at this, if they really study the constitutionality, they’ll find, as they have before, that it’s difficult and unwise to extend it,” said Mr. Powell, who has announced that he will step down at the agency this month.

Despite the cable industry’s argument that regulating cable content would be unconstitutional, there’s nothing to prevent Congress from passing a law on the subject. Cable could then challenge the constitutionality of the law in court.

Spokespeople for Comcast, Time Warner Cable and Cox Communications all declined comment on Disney’s lobbying position, referring inquiries to NCTA. But NCTA’s Mr. Dietz also declined comment on Disney’s position, as did representatives of Fox and Viacom.

Mr. Padden said the cable industry’s efforts to rationalize a case for cable’s continued exemption from broadcast indecency regulations falls short on every relevant level.

“Ultimately, all the attempts to distinguish cable [from broadcasting] fail,” Mr. Padden said. “There is spectrum usage [by cable]. There is near ubiquity. And with v-chips in every set, there is really no difference in blocking capability [between broadcasting and cable].”

In a statement, L. Brent Bozell, president of the Parents Television Council, indicated that his group-credited for stirring up much of the fuss about broadcast indecency last year-would accept cable regulation as an alternative to a la carte.

“We support cable consumer choice [a la carte] as the best way to protect families from content they find offensive or that may be indecent and to protect free speech concerns,” Mr. Bozell said. “But if the cable operators refuse to allow consumer choice, then we believe that any cable network which is included in the basic or expanded basic tiers should be forced to comply with the same decency standards as the broadcast networks. Such a policy would force those networks that don’t adhere to such standards onto a separate subscription tier.”

One cable industry source said of all the owners of Big 4 TV networks, Disney, which owns ABC, has the least to lose from indecency regulation being extended to cable. That’s mainly because the cable networks Disney owns tend to be tamer than the cable networks owned by the companies that own the other major broadcast networks.

Even E! Entertainment, in which Disney shares ownership with managing partner Comcast, already operates using a broadcast standard.

“Probably the most indecent programming Disney has is `Desperate Housewives,’ which is on their broadcast network,” the source said.

On the other hand, Fox counts the edgier FX among its cable siblings at News Corp., while CBS parent Viacom has MTV and Spike in its cable portfolio. NBC Universal owns such cable networks as Bravo and general entertainment outlet USA Network.

Some say that if decency regulations were expanded to include edgier cable outlets-potentially mellowing the racier cable content-Disney would gain a competitive advantage by limiting the draw of its competitors.

Another cable TV industry source said, “Disney would like cable to be subject to the same indecency regulations broadcasters are so their broadcast network could better compete.”

Sen. Stevens, the chairman of the Senate Commerce Committee, and Rep. Barton, chairman of the House Energy and Commerce Committee, endorsed a regulatory crackdown on cable and satellite indecency during a National Association of Broadcasters-sponsored seminar in Washington last week.

Sen. Stevens said he was appalled by the use of vulgarities on a cable TV show he saw recently, which he declined to identify by name. “We wonder why our children our sexually active,” he said. “We spend millions to promote abstinence while the public airwaves are increasingly promoting sex.

“Broadcasters alone are not to blame,” he continued. “Cable is often worse. … In this country there has to be some standards of indecency.”

Added Rep. Barton, in subsequent remarks to reporters: “[Broadcasters, satellite and cable] ought to play to, to the extent it’s possible, the same rules.”

Sen. Stevens also said he disagrees “violently” with cable’s argument that the First Amendment prohibits regulation of cable’s content for indecency.

“We might as well get it on the table,” he said. “If that’s the issue they want to take on, we’ll take them on, and we’ll let the Supreme Court decide.”

Said Rep. Barton, “I’m very supportive of what the senator says.”

Industry analysts said regulating cable’s content would help level the programming playing field between broadcast and basic cable-a field that many believe is currently tilted in cable’s favor because it allows cable to offer racier programming.

“It would eliminate a huge advantage cable now enjoys over broadcasting in terms of the edginess of its programming,” said Chris Stern, an analyst for Medley Global Advisors.

Larry Gerbrandt, director of media and entertainment practice for AlixPartners LLC, said regulation would also substantially increase a cable operator’s financial exposure “because of the number of networks they would have to monitor.”

In a 389-38 vote last month, the House of Representatives approved legislation that would raise the cap on FCC fines for broadcast indecency from $32,500 to $500,000 per incident. Rep. Barton said it is too soon to say whether that bill will be amended to include cable and satellite.