D.C. Circuit Largely Upholds FCC Program Access Rules
A federal appeals court largely affirmed an FCC order asserting its program access rules over vertically-integrated and terrestrially delivered programming. But it vacated a part of the rule closing some of the “terrestrial loophole” that labeled some acts of withholding such programming as categorically unfair. That step was arbitrary and capricious, the Court of Appeals for the D.C. Circuit found in Cablevision v. FCC. The decision led both proponents and critics of the rule to claim victory. “As we've said all along, and as this court reinforced, given the local and regional nature of terrestrial programming, such exclusives can be highly pro-competitive,” Cablevision said. Verizon, AT&T, USTelecom and Consumers Union praised the decision for affirming the FCC’s authority over terrestrially-delivered programming.
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The FCC will have to initiate another rulemaking to handle the vacated portion of the rules, but it can act on pending complaints based on Friday’s ruling, said Senior Vice President Andrew Schwartzman of the Media Access Project, which also praised the ruling. “In some cases, they can proceed, but in other cases it will require a further iteration,” he said. “I think the commission will move quickly on this.” The decision clears the way for the FCC to resolve pending program access disputes, said Verizon Deputy General Counsel Michael Glover in a statement. “We are pleased that the Court upheld F.C.C.’s conclusion that program-access requirements apply to regional sports programming, including the high-definition sports programming that consumers demand."
The commission doesn’t have to start a new program access proceeding before acting on an AT&T complaint against the Cablevision spinoff Madison Square Garden Co., said Bob Quinn, the telco’s senior vice president of federal regulatory. AT&T has been seeking carriage of MSG’s HD regional sports networks in Connecticut. The commission didn’t need to wait for the court’s ruling to act, but “given the fact that the court has ruled, there’s no question about it now and we're hopeful it will rise right up to the top of the pile,” Quinn said.
Nothing in section 628 of the Communications Act prohibits the FCC from extending its rules to cover terrestrially-delivered programming, Judge David Tatel wrote in his opinion. The court also found meritless Cablevision’s arguments that the rules violate cable operators’ First Amendment rights. Cablevision’s “reference to the Commission extending its program access rules by closing the terrestrial loophole is a red herring,” Tatel wrote. “Although it is true that competition in the MVPD industry has generally increased, even absent rules restricting terrestrial withholding, nothing prevents the Commission from addressing any remaining barriers to effective competition with appropriately tailored remedies."
The court’s rejection of the cable industry First Amendment arguments is an “especially important” aspect of the decision, Schwartzman said in a statement. “In reiterating that the requirement that cable companies share their programming with competitors serves an ‘important governmental purpose,’ the Court reinforced the principle that the goal of the First Amendment is to protect the public.” Oral argument was heard in Cablevision in February (CD Feb 15 p7), where Tatel dominated questioning. His decision was also written on behalf of Judges Thomas Griffith and Judith Rogers.