Bundling Also to Be in Coming Indie, Diverse Programming NPRM
Prohibiting “unconditional” most-favored-nation (MFN) provisions and types of “unreasonable” alternative distribution method (ADM) provisions would be the focus of the independent and diverse programming rulemaking notice on the FCC's September meeting agenda, but the proposal also will invite comments on program bundling, an FCC official told us. Chairman Tom Wheeler's announcement Thursday that he was proposing for consideration rules limiting ADM and MFN use (see 1609080083) left some buoyed. That ADMs and MFNs also were singled out as conditions in regulatory approval of Charter Communications' buying Time Warner Cable and Bright House Networks (see 1604250039) "signals ... the importance of these," Public Knowledge Policy Fellow John Gasparini told us Friday.
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The FCC official told us the NPRM also would seek comment on whether some ADM provisions should be deemed presumptively reasonable, or whether bright line rules should expressly prohibit certain ADM provisions. The official said the FCC is interested in ADM provisions that could threaten the survival of independent programmers by heavily impeding their ability to get broader access or distribution, such as requiring extensively long or indefinite licensing of content. The draft includes a tentative conclusion that the FCC would limit provisions that restrict licensing to other content providers such as online video distributors by deeming such provisions unreasonable, the official said. The NPRM also would seek comment on whether to adopt ADM bright line rules at all, the FCC official said. It would seek comment on how to define unconditional MFN provisions, the agency official said.
The NPRM also would seek comment on additional rules that would advance programming diversity and on bundling practices, though it carries no tentative conclusion on bundling. Advocates of new rules in the indie programming proceeding repeatedly assailed bundling (see 1608290048).
Such provisions are "a real challenge" to programmers and can lead to restraints on distribution through over-the-top platforms, said Common Cause Program Director Todd O'Boyle in an interview. It remains to be seen what policies might flow from the NPRM and what questions, but any movement to curb ADM and MFN provisions likely will be an improvement for indie and diverse programmers, he said. Agreed Gasparini, "The market is very complicated." He said any rules on MFNs and ADMs "may not be the one-stop solution .... but it certainly wouldn't hurt."
The focus on MFN and ADM provisions "is nice, but the big issue is carriage in the first place," said RFD-TV President Patrick Gottsch. With two RFD channels dropped earlier this year and both pay-TV distributors telling him it was due to bundling by major programmers not leaving enough space in their lineups for his content, Gottsch said bundling is a far bigger woe to indie programmers: "What the FCC is proposing is great for anybody who can get carriage."
Broadcasters defended challenges in the indie programming proceeding to the current bundling rules regime (see 1609010031). NAB and multiple broadcasters didn't comment Friday. The kind of pushback the broadcast industry mounts will depend on the substance of what the FCC proposes, Gasparini said. Given their resistance to MFN and ADM provision in the past, he said, "I would be surprised if they were totally on board."