NCTA: Cable Act Regulations Are Now Relics

A wealth of competition has spurred cable to provide more and better service, the National Cable & Telecommunications told the Federal Communications Commission in comments on its 14th video competition report.

The bottom line of its message was that Congressional mandates in the 1992 Cable Act on rate regulation, program access, program carriage, leased access, PEG access, cable-ownership restrictions and more are now "relics of a bygone era" because competition has been "unquestionably" achieved.

The previous 13 reports have been a "documentary history of the steady and irreversible growth of competition in the video marketplace," said NCTA, a pace that has only increased exponentially in the three years since the FCC put out its last report.

The cable trade group pointed to the rise of DBS from no presence in 1993 to 29.2% in 2006, the growth of telco video, online video, home video, mobile video, and the potential of broadcast multicast channels.

For example, said NCTA, YouTube viewers watched 5.5 billion streams in April, while Hulu's streams increased 490% in the same month to 373.3 million compared to 63.2 million in April 2008.It also cited the decreasing percentage of vertically integrated cable program networks.

Citing the spin-off by Time Warner of its cable systems earlier this year, NCTA said that, adjusted for that divestiture, the 14.9% of cable networks owned, at least in part, by cable operators falls to 9.6%. NCTA said that no cable network owns more than one of the top 25 networks.

"In these circumstances, any lingering concern that cable operators might thwart competition in the video marketplace by favoring an affiliated program network or by withholding a vertically integrated network from a competitor should have disappeared."

"Should have" is the operative phrase. An FCC administrative law judge has been presiding over three hearings of late by cable programmers making just such a claim. Specifically that top cable operators have been favoring their own, similar channels.

NCTA addressed that point specifically. "Given the diversity and quality of unaffiliated networks that already occupy those hundreds of channels, the notion that it should somehow be presumed, much less deemed, anticompetitive for a cable operator to decide not to carry one more unaffiliated service because the operator may own and already carry a similar service that it does own is not a sustainable claim."

NCTA said that with the increase in services and channels, it was not surprising that prices had gone up "in some cases," but took pains to put in accompanying context and caveats, including that promotional discounts and bundled service lowered prices and that if costs to boost quantity and quality far exceed inflation, "prices are sure to do the same."

NCTA said that higher prices did not reflect a lack of competition, but instead expenditures made because of increased competition.

Cable continues to invest in infrastructure, faster broadband, two-way technology, bundled services and cutting-edge programming, said NCTA.

It suggested that the FCC is playing catch-up with the "14th Video Competition Report." It has not put out a report since 2006. It has decided to combine three years' worth of video competition reports into one. That is because it did not release its 2006 report until January 2009, necessitating the effort to play catch-up.

The commission will become data-collection central over the next year or so at least as it collates information on broadband deployment and minority ownership, as well as for the video competition reports.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.