Indie Programmers Suggest Multiple Marketplace Fixes in Diversity NOI

MFN and ADM clauses might be overtly anticompetitive "or simply the expected result of particular terms," Public Knowledge said in its filing posted Thursday in the docket, adding that the FCC needs to look at the intent when trying to decide. To do so, it said, the FCC should look for a variety of indicators when trying to make that call, including grossly disparate bargaining power, the negotiating parties' relative market power, the existence of disparate information, the effect on competition and the nature of the negotiating companies.

Hispanic Information and Telecommunications Network in its filing posted Thursday suggested curbing the scope of allowable bundling arrangements and a prohibition on MFNs altogether, or alternately a limit on MFN use regarding non-vertically integrated or smaller independent programmers lacking market power. The FCC also could ban using MFNs to "cherry pick" good rate reductions while ignoring the service concessions made by other carriers to get those reduced rates, or at the least ban the use of MFNs with noncommercial educational programmers, it said. It also suggested shorter time limits -- six months at most, and two months for topical and news programming -- instead of the more common 12- to 18-month restriction.

Pointing out that 91 percent of total viewership is on channels controlled or owned by conglomerates, INSP in its filing posted Thursday said: "Independent programmers -- and the independent viewpoints they represent -- are being squeezed out of the video marketplace, to the point where their very existence is in jeopardy." It suggested such limits on multichannel video programming distributors' use of MFNs as bans on unconditional MFNs or any others that give "anything more than traditional volume-based MFN protections," and requirements that volume-based MFNs imposed on indie programmers be roughly akin to the least burdensome volume-based requirements applied to any of the largest cable networks an MVPD carriers. It also suggested reciprocal MFNs, with MVPDs having to give programmers a guarantee that terms covering it will be no less favorable than the best terms the MVPD gives to comparable networks.

Not everyone sees a video market needing fixing. "Regulatory actions ... to boost particular competitors’ standing will diminish, not enhance, the benefits that such competition brings consumers," NCTA said in a filing posted Thursday. The cable industry already puts a premium on program diversity in order to lure customers, it said, adding that any FCC action "to promote more carriage of particular independent and diverse program networks over other providers of video content ... would raise First Amendment problems" in the form of regulating of the conduct and choices of MVPDs and networks. Echoing many NCTA arguments, AT&T in its filing posted Thursday said the FCC may have limited authority to act on the issue, as sections 257 and 616 of the Communications Act are "limited in scope and ... address defined objectives, none of which appears to be at issue with the two MVPD practices discussed in the NOI."

Not everyone agrees with that reading of the law. "ADMs are exactly the type of exclusivity demands Section 616 [of the Communications Act] is designed to prevent," TheBlaze said in its filing posted Thursday, adding that under under Section 706 of the Telecommunications Act the FCC could regulate program bundling, as it impedes broadband deployment.

Public, educational and governmental (PEG) channels, meanwhile, frequently have difficulty getting access to interactive program guides and HD transmission on MVPDs, Alliance for Community Media and the Alliance for Communications Democracy said in a joint filing posted Thursday. PEG channels "are willing and able to provide whatever is necessary for electronic programming guide information and HD programming, yet MVPDs have been unwilling to allow PEG access to these as they do for other channels," the groups said, adding that some PEG channels shoot and produce programming in HD but then have to convert it to standard definition for MVPD systems.

The FCC's history of poor implementation or even abandonment of policies aimed at fostering diverse and independent programming is part of the problem, Free Press said in its filing posted Thursday. Examples include the repeal in the 1990s of the Financial Interest and Syndication Rules, as well as the 1995 congressional repeal of tax incentives to encourage sales of broadcasting facilities to racial minorities, it said. And despite merger conditions aimed at promoting diversity and checking market power, Free Press said, "runaway media consolidation" has resulted in a small number of local and national broadcast owners and video programmers and distributors, it said. Even more than the potential market power abuse that comes with ADM and MFN clauses, cable bundling is a particularly big hurdle for indie and diverse programmers, it said, adding that Congress and the FCC should encourage skinny bundles and wholesale unbundling. It also said the FCC should tackle Internet issues -- such as zero rating and "arbitrarily low and punitive data caps" -- to ensure the over-the-top market doesn't adopt the same practices that keep indie programming off cable.

Past rules and proceedings regarding everything from must carry and open access to net neutrality fell short of tackling the biggest barrier diverse and independent programming faces -- the gatekeeper system, where control of the set-top box and channel positioning is key, Robert Townsend, former CEO of New Urban Entertainment TV and now a consultant, said in a filing Thursday in the docket. "Unless we eliminate the gatekeeper system, we will forever be just talking about how to improve markets for independent and diverse programmers," he said. Writers Guild of America, West similarly pointed to set-tops in its filing posted Thursday, saying a set-top market "where consumers have real choice and can easily access television and online programming through one interface and limitations on MVPD restrictive contracting practices would enhance competition and make it easier for independent programming to reach the public."