New Leased Access Rules Released By FCC

Washington -- The Federal Communications Communications Commission released on Friday new cable leased access rules

adopted last November

that cap rates at 10 cents per month, per subscriber, an estimated 75% reduction from the current maximum.

The new rate cap does not take effect immediately as the agency has decided to give cable operators 90 days to adjust to the new regime. The 90 days begins to toll when the rules are published in the Federal Register, which could take a few more weeks.

In 1984, Congress established leased access mandates, requiring cable systems to set aside a percentage of their channels for third party programmers. Large capacity systems, those with more than 100 channel, need to reserve 15% for leased access programmers.

The leased access regime is the reverse of the basic cable business model. Although channels like CNN and ESPN receive payments from cable operators, leased access programmers are required to pay cable programmers.

The new 10-cent maximum is unavailable to "programmers that predominantly transmit sales presentations or program length commecials," the FCC said in an 86-page order. The FCC has launched a rulemaking to consider whether the exclusion of home shopping and infomercials should continue.

The FCC said it established a new compliance structure to ensure that leased access programmers have greater certainty about obtaining cable carriage than they do now, promising to fine cable systems $500 per day for failing to respond within 10 days to a bona fide leased access proposal.

The FCC also imposed new annual reporting requirements on cable systems to assist the agency in tracking the popularity of leased access, staring with 2007 data. Every cable system has to file its first report with the FCC by April 30, 2008.