Copyright 2002 Reed Elsevier Inc.

Daily Variety…06/14/2002

From LexisNexis

WASHINGTON — In a boost for the satcasting biz, the Federal Communications Commission on Thursday extended for another five years a rule forcing cablers to make their programming available to their winged competitors.

The program access rule was set to expire in October, with the cable biz arguing that satcasting giants EchoStar and DirecTV hardly represent a fledgling industry anymore that needs special dispensation.

By a 3-1 margin, the FCC disagreed, saying the pay TV playing field still isn't even between cable and other providers, such as cable overbuilders or satcasters.

In recent weeks, several Capitol Hill pols have urged the Republican-controlled FCC to leave the rule on the books until a thorough study can be completed on the impact of rampant media consolidation.

The satcasting biz applauded the FCC's decision.

"The program access rules were instrumental in helping DirecTV obtain programming to compete with entrenched cable operators, and today's decision by the FCC preserves competition and diversity in the multichannel TV marketplace," said DirecTV prexy-chief operating officer Roxanne Austin.

"This five-year extension will be of great benefit to our customers, who will continue to have access to a wide variety of quality programming on DirecTV," Austin said.

The rule at issue, enacted by Congress in 1992, prohibits a cabler from entering into exclusive contracts with other cable operators. Rule applies only to programming distributed by cablers via satellite, which encompasses most channels.

Regional channels, such as sports nets, are exempt from the rule —causing satcasters no small amount of consternation. The FCC said Thursday it had declined to consider whether the exemption should be scuttled.

Since the overall program access rule was adopted, cable's share of the overall market has dropped from 95 percent to 78 percent, according to the FCC.

Voting against the five-year extension, Republican FCC commissioner Kathleen Abernathy said there is no longer any need for the rule, considering that there are about 18 million satcasting customers, nearly one-quarter of total subscription TV customers.

"This vigorous, substantial competition assures that the vast majority of programming, whether owned by a cable operator or not, would be available to all distributors. The cable industry has dramatically increased programming diversity and choice and will continue to do so," National Cable & Telecom Assn. senior veep Dan Brenner said.

"Nevertheless, eliminating this rule this year would have restored balance in allowing limited exclusivity to be used to differentiate competitive offers — as Congress contemplated in proposing a sunset back in 1992," Brenner said.