Comcast Steps Up Lobbying Against Draft Program Carriage Standstill Rule
Comcast stepped up lobbying against a draft program carriage rule to make cable operators keep distributing independent channels while indies’ complaints are pending at the FCC. Lobbying last week at the offices of Chairman Julius Genachowski and Commissioner Robert McDowell came as the Republican is the only FCC member not to have voted on a draft Media Bureau order and further rulemaking notice. He’s concerned that the agency may violate the Administrative Procedure Act by issuing standstill rules before seeking specific comment on them (CD July 25 p8). The agency’s approach to the standstill requirement “is out of step with its general interest in engaging in predictable and orderly rulemaking,” Comcast Senior Vice President Kathy Zachem reported telling FCC Chief of Staff Eddie Lazarus.
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The program carriage rulemaking “is in the late innings,” Lazarus told us during a Q-and-A Friday at a Minority Media and Telecom Council conference. “It is important to get that balance right” for small businesses to be carried on major cable systems, he said. Program “access and carriage are very important to the business creation process,” Lazarus added, “and we're trying to improve” those rules.
It’s still possible Genachowski will reach a compromise with McDowell that’s backed by cable operators on changing the standstill provision in the draft order, agency and industry officials said. No changes had been made as of Monday afternoon to the draft, and McDowell still hadn’t voted on it, they said. There may be more conversations between executives and representatives of the bureau and/or Genachowski’s office on changes to the draft order, industry and agency officials said. A bureau spokeswoman declined to comment.
If Genachowski changes the draft order to move the standstill requirement to the further rulemaking notice, it seems unlikely Commissioners Mignon Clyburn and Michael Copps would support it, said Media Access Project Senior Vice President Andrew Schwartzman. “I would be surprised if there would be a third vote for something that is watered down,” he told us. “I'm personally very satisfied that the commission is well within its authority to do this -- that there are no procedural problems -- and I would be surprised if the commission’s staff disagreed.” MAP has lobbied for standstill rules and along with other nonprofits and independent cable channels contended the commission has authority to issue them.
Zachem cited a “lack of notice and the deferral of key issues to a later proceeding.” The executive, who runs the cable operator’s Washington lobbying of regulatory agencies, said the rules “could undermine good-faith business negotiations, chill MVPDs’ willingness to test new networks, and drive up programming costs for consumers.” NCTA also has said the commission may violate the act by issuing new rules, because a 2007 rulemaking notice didn’t specifically seek comment on a standstill. “Because the Commission has not provided notice concerning these and other substantive issues, they are not ripe for resolution in a rulemaking order,” a lawyer for Comcast reported telling an aide to McDowell, in a filing in docket 07-42 Friday, where the ex parte report of the Lazarus conversation was posted Monday (http://xrl.us/bk25uy).
A lawyer for Comcast told an aide to McDowell the commission lacks authority to require interim carriage. The draft order would require such carriage once the bureau found an indie made a prima facie case. “Relevant case law casts doubt on whether the four-part preliminary injunction test that the Commission adopted in the Terrestrial Exemption Order -- and would presumably seek to adopt here -- is appropriate in this context,” Comcast said of last year’s order and the draft one. “Generally speaking, the purpose of a preliminary injunction is to preserve the status quo,” the company said. “However, a standstill in the program carriage context would not preserve the status quo; rather, it would extend the terms of privately negotiated contracts that were set to expire on an agreed-upon date, essentially forming a new contract.”