Intellectual Property Law

Loophole to be closed

By Susan Crawford

The FCC today decided to give competitors the chance to argue for closing the “terrestrial loophole” on a case-by-case basis - so competitors can get access to cable content even if it’s delivered via fiber rather than satellite.

1.  This means that competitors of vertically-integrated cablecos can claim that (for example) exclusive contracts for programming regional sports networks are unfair - and they’ll be supported by the presumption that these contracts are indeed unfair.

2.  This also means that the Commission is taking a hard look at the 1992 Cable Act and making sure that the Commission’s actions are serving competition.  Section 628(b) provides that it shall be unlawful for a cable operator to ?engage in unfair methods of competition or unfair or deceptive acts or practices, the purpose or effect of which is to hinder significantly or to prevent any multichannel video programming distributor from providing satellite cable programming or satellite broadcast programming to subscribers or consumers,” and the Commission is saying that this language gives it the authority to require cable operators to share terrestrially-delivered programming.

3.  This is a substantial step that has implications for the Comcast/NBCU deal - Comcast doesn’t allow DirectTV or Dish Network to have access to its exclusive Philadelphia fiber-delivered regional sports network, which has had a big impact on satellite subscriptions.  The fact that FCC is taking this on now indicates that this issue won’t be a chit that Comcast can use later.  Much more will be on the table in the months to come, and predictions are that spectrum access will be up for negotiation.

4.  Expect litigation - the statute provides for “program access” to cable programming delivered by satellite and doesn’t say anything about fiber feeds.  (But why should the medium make any difference?)

5.  It’s good to look back at the 1992 Act, which includes the idea that vertically-integrated conduits shouldn’t control content.

Full post as published by Susan Crawford Blog on January 20, 2010 (boomark / email).