FCC abandons its 'a la carte' cable programming plan

Chairman Kevin Martin's proposed overhaul of the basic cable system was removed from a plan to help ensure minority-owned programmers have access to channel spectrum.

The five members of the US Federal Communications Commission found themselves unusually occupied yesterday -- not so much with ordinary business as they were waiting for Chairman Kevin Martin to bring his plan up for a vote. Knowing his unusually radical plan to replace some metropolitan basic cable plans with "a la carte" programming choices -- supposedly as a means of ensuring fairer access to minority-owned channels -- was doomed to failure (it literally said as much in that morning's New York Times), Martin periodically postponed yesterday's final vote on the matter in hopes his fellow Republicans would reverse their opposition.

It didn't happen, though as it turned out, only the Commission's two Democrats were willing to join Martin in pledging support for the measure that remained. What did remain is a provision to guarantee fair rates for services that lease channels set aside by cable systems for more diverse programming.

Typically, the cash flow for programming goes the other way: from the cable operator to the programmer. Major cable programmers like Viacom, Discovery Networks, Time Warner, and TW's Turner Broadcasting unit offer programs to CATV providers like Comcast, Adelphia, and yes, to Time Warner, and it's the programmers who charge the fees.

An existing legal mandate says cable operators must set aside channels for access by other sources, presumably to open up the spectrum to more diverse programming. But for that system, the flow of cash is reversed: Small programmers lease the unused spectrum from the cable operator, which receives the fee.

Perhaps because so few programmers prefer to do business this way, there are very few so-called leased access channels available to small programmers. A survey cited by Chairman Martin states the average number of leased access channels available on a typical US cable system is 0.7. And thus, very few small programmers exist to take advantage of that seven-tenths of one channel usually available.

What the Chairman tried to do -- ostensibly to resolve this problem -- was invoke an existing clause of the revised Communications Act of US law. That clause states that whenever cable systems with 36 or more channels are available to 70% or more of US citizens, and at least 70% of those citizens to whom that service is available become subscribers, then if the FCC determines the programming on those systems is not diverse enough, it can take corrective measures. The "a la carte" system was Martin's measure of choice.

But skeptics on the Commission saw the plan as something that could conceivably accomplish the reverse objective, perhaps intentionally: It could force subscribers into paying individual fees for separate channels, with those fees being determined by the cable programmers -- a situation which could very well turn out to the programmers' liking.

What was originally intended to have been a 9:30 am vote on the matter was postponed well into the night. In order for the Commission to pass anything at all, Chairman Martin withdrew the "70/70" trigger proposal, which pleased all his fellow members.

"I'm pleased that the Commission has backed off its fig leaf attempt to address minority and female ownership," Comm. Jonathan Adelstein commented late yesterday. "It was an obvious effort to provide cover for more media consolidation, which would only have take media outlets further out of the reach of women and minorities. It was designed to check the box and move on. It's high time we create an independent, bipartisan panel that will look at these issues in a comprehensive and substantive fashion."

Comm. Michael Copps smelled a rat when he noticed representatives of minority media concerns were not even given time to reply, favorably or otherwise, to a proposal which was said to be benefitting them. "It started to feel more and more like -- if you'll pardon the expression -- a whitewash," Comm. Copps wrote yesterday. "Thankfully, we now have time to get it right. I hope we will have the good sense to do that instead of picking an arbitrary date to complete big media's wish list."

The remainder of the proposal, after "70/70" was lopped off, addressed new enforcement rules for ensuring availability of leased access channels, and fair rates for those channels. But both of Martin's fellow Republicans dissented anyway, arguing that the whole notion of making small program providers pay for the kind of access for which larger providers are paid themselves, is ludicrous.

Commissioner Robert McDowell pointed to the backward attitude of the business model which leased access appears to promote. The type of programmer that isn't seeking revenue from the programming it produces, he argued, must expect to receive its revenue from some other source. And that limits the type of programming this presumably small programmer would produce to a few certain, curious types.

"The economics of leasing result in limited use by traditional, full-time programmers," Comm. McDowell wrote yesterday. "The record indicates that generally, part-time programmers producing home shopping content, infomercials, adult content and, ironically, certain types of religious programs are attracted to this business model because they have other means of generating revenue from their viewers."

The National Cable and Telecommunications Association late yesterday expressed approval for the removal of provisions which Comms. Copps and Adelstein feared would have actually benefitted the industry the Association represents. But in its statement of gratitude, we learned that the cable industry was thrown a bone anyway.

"We are pleased that the Commission dropped both a proposal to impose a new multicast must carry mandate on cable systems and a proposal that would have encouraged government intervention in private carriage negotiations," NCTA CEO Kyle McSlarrow stated yesterday. "Rejecting these items sends an important message that consumers are best served by marketplace forces, not government micromanagement."

The "bone" came in the form of another lopped provision from the FCC's final order: a compromise provision that cable systems "must carry" the multicast signals that piggy-back on top of new digital broadcast signals. The cable industry appeared to have been pleased with last September's compromise, though it certainly seems pleased now to have that gone and over with.

After all was said and done yesterday, the FCC adopted an order that ends up changing little or nothing.

For which Chairman Martin tried to adopt a tone of gratitude yesterday: "I believe that the actions we take today will go a long way to accomplishing the twin goals of competition and diversity," he wrote. "I look forward to continuing to work with my colleagues to adopt other policies that are designed to ensure that independent voices are heard."

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