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Clyburn: Time to Excise Diversity Dampening Clauses

Look for the FCC to vote Thursday to find unconditional most-favored nation clauses (MFNs) and "unreasonable" alternative distribution mechanism (ADM) clauses presumptively off limits.

What is less clear is whether the commission will decide to apply that across the board or only where the programmer—an independent or start-up—lacks the clout of the MVPD.

The commission is scheduled to vote Sept. 29 on a Notice of Proposed Rulemaking on program diversity, and it is expected to look a lot like the conditions placed on the Charter-Time Warner Cable-Bright House merger.

The NPRM is expected to seek comment on program bundling but not presume it is anticompetitive.

The NPRM stems from a Notice of Inquiry launched last February in response to a request from FCC commissioner Mignon Clyburn after agreeing to support mergers, including Charter-TWC, in which access to independent programming issues were raised.

The NPRM has long been expected to propose applying more broadly, per a new FCC rule, the Charter-TWC condition—contained in a Department of Justice consent decree—that prohibits New Charter from preventing programmers from doing deals with online video distributors (OVDs) like Netflix.

Under the terms of the DOJ approval of the Charter-TWC deal, Charter was prohibited from "entering into or enforcing any agreement with a programmer that forbids, limits or creates incentives to limit the programmer’s provision of content to one or more OVDs. The settlement further provides that Charter will not be able to avail itself of other distributors’ most favored nation (MFN) provisions if they are inconsistent with this prohibition. The settlement also prohibits New Charter from retaliating against programmers for licensing to OVDs." 

The commissioner blogged about the item on the eve of the vote, saying "the use of unconditional MFNs and unreasonable ADMs have enabled unfair barriers to entry, so now is the time to move forward and enact rules that prohibit these practices."