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NCTA Enumerates 'Misguided' FCC Program Carriage Proposals

How does the National Cable & Telecommunications Association NOT love the FCC's proposed program carriage rule changes? Let it count the ways those proposals are misguided and should be rejected.

It did just that Wednesday (Jan. 11) in reply comments filed in response to the FCC's July vote to grant interim carriage during the adjudication of cable-network program-carriage complaints, or true-up payments for nets that have never been carried, and set deadlines for dealing with those matters.

The document's table of contents headers summarized NCTA's response to changes it said were based on a flawed premise: "[T]hat the complaint process is fundamentally broken and that independent programmers do not perceive that it provides them with meaningful protection from MVPDs' discriminatory practice."

Discounting that premise, NCTA said 1) there is no basis for shifting the burden of proof to defendants in program carriage proceedings, 2) no basis to require MVPD's to negotiate with unaffiliated program networks, 3) no basis for authorizing damages; 4) no basis for a ban on "retaliation," 5) no justification for expanding the scope of the rules by "stretching" the meaning of affiliation, 6) no reason to expand discovery rules, and 7) every reason to automatically stay any mandatory carriage order until the FCC has reviewed a complaint.

On point one, NCTA argues that it would be unfair to shift the burden of proof to the defendant because the FCC's rules for making a prima facie case for discrimination do not require evidence of a violation, only of discrimination -- the MVPD has owns a network similar to one it has not agreed to carry on similar terms and conditions. But, NCTA points out, program carriage rules do not prevent discrimination against similarly situated networks, just discrimination based on that lack of affiliation.

"Unlike the program access rules, those rules do not generally prohibit discrimination. Instead they only prohibit discrimination in certain limited circumstances -- where such discrimination 'unreasonably restrain[s] the ability of an unaffiliated programming vendor to compete fairly,'" said NCTA, "and where such discrimination is 'on the basis of affiliation or non-affiliation of vendors.' Those circumstances are elements of the offense to be proven by the complaining party; there is no basis for requiring defendants to prove that they do not exist."

As to negotiating with unaffiliated networks, NCTA says, again, the FCC's proposal makes no sense. "MVPDs are fully refuse to carry a program network -- whether or not it is ‘similarly situated' -- for any reason other than the non-affiliation of the network. There is therefore no basis for requiring MVPDs to put forth proposals and negotiate in good faith to carry networks whose programming they prefer not to include in the packages of programming that they offer to their customers."

Damages are meant to deter violations, says the cable association, but as even the rule change supporters concede, there has never been an FCC final adjudication of a single program carriage complaint -- those change supporters say that the current process complaints. So, say cable operators, there is a hardly a need to discourage violations that don't appear to be taking place. Same with a ban on retaliation, of which NCTA says there is virtually no evidence.

An FCC Administrative law judge did rule against Comcast last month in a program carriage complaint lodged by Tennis Channel. That is a recommended decision and could still be rejected by the FCC commissioners, though that would appear unlikely since the Media Bureau recommended the judge fined for Tennis Channel.

Responding to some commenters who sought to expand the definition of "affiliation," NCTA said there is no reason to think Congress meant discrimination to mean anything beyond favoring a network due to an MVPD's ownership interest.

"There is no evidence that Congress meant to define "affiliation" so as to bar an MVPD from treating networks owned by other MVPDs more favorably than other networks. And it would be utterly unreasonable to conclude that Congress meant to define the term 'affiliation' to include relationships between MVPDs and programmers that have nothing to do with ownership or control."

NCTA says the FCC should not open discovery to "fishing expeditions" for sensitive competitive information, while mandating carriage before a complaint had been reviewed would raise "serious First Amendment questions" the commission and other commenters appear to have missed.