Wetmachine: Harold Feld's Tales of the Sausage Factory

Quick On Cable: Martin and Copps Pull Out A Partial Win By Persuading Adelstein To Meet Them Halfway

Well, I'll have a lot more to say over the next few days. And there were a bunch of very good Orders that came out on other subjects, like Low Power FM and mandatory disclosure requirements for broadcasters. But here's the summary:

1) The Commission acknowledges that data about the 70/70 threshold remains unclear, and will therefore require that all cable operators must report real subscriber numbers, including all MDU subscribers, for 2006 and 2007.

OK, as regular readers will know by now, I think it was clear that cable penetration passed this threshold long ago. But since we at MAP have been asking the FCC to collect real data on this stuff from the cable operators since 2000, I am pleased with the ultimate outcome. Hell, I was telling Steve Effross of NCTA last night that I'd wait on the result to get real data from all cable operators so that we could do this right.

If I'm wrong on penetration, so be it. This is an empirical question and we should solve it through the obvious expedient of telling cable operators to actually report their subscriber numbers. Three cheers for Kevin Martin for having the courage to stand up to the wholly bought cable subsidiaries in the GOP, and three cheers for Michael Copps for pushing for collecting actual data from cable companies for years now.

As for Jonathan Adelstein. _sigh_ Yes, I'm still disappointed. I get that Adelstein doesn't like being in the hot seat, that he thinks Martin is a — if you'll excuse me — martinet who cooks the books, etc. etc. But he is just plain wrong on this one. As noted with copious citations in the MAP filings (see links in comments in previous post) the FCC has always relied on Warrens data and exclusively on Warrens data, which showed cable penetration hovering at pretty damn close to 70%.

And as for the much vaunted Cable 325 Reports that Adelstein and McDowell went on at great length about, I shall refer interested parties to the GAO's analysis, with the lengthy but descriptive title “Data Gathering Weaknesses in FCC's Survey of Information On Factors Underlying Cable Rate Changes.” And, as also mentioned in MAP filings, the FCC's regulatory fees NPRM determined that cable gained 1.5 million subscribers in 2006. If we're going to include all the FCC data, the fact that everyone (including McDowell and Tate) already voted to find that cable gained 1.5 million subscribers in 2006 should be included in the discussion as well.

But, at the end of the day, Adelstein voted to demand the cable companies provide the data and end this debate once and for all. That counts for a lot. Nevertheless, for me on this, Adelstein comes out of this a lot less like Han Solo and a lot more like Hamlet, spending five acts waffling and causing havoc before finally managing to stab the right villain.

As for Tate and McDowell — hardly a surprise. Given how thoroughly the cable guys appear to own the Republicans, the surprise is not that McDowell and Tate went with the cable boys but that Martin actually went ahead and defied them.

2) Leased Access: The Commission adopts a pretty good Order that will lower the rate, require cable operators to be more responsive, and generally force staff to get complaints processed quickly. Surprisingly, it took some convincing to get Adelstein to go along with this one, as the cable operator's last minute complaint that they didn't get enough due process struck a chord. (I love it that industry always discovers due process when they are about to get their comeuppance, but when it's about shafting us the due process concerns go out the window.) Fortunately, Copps and Martin were able to broker a compromise that the FCC will stay operation of the new rate formula until after they process Petitions for Reconsideration. And surprise! Tate and McDowell dissented. McDowell's comments about how leased access doesn't work as an economic model run afoul of the fact that the record contains several examples of programmers that do make a go of it even under the existing abominable rules (such as CaribeVision). But when your “Mr. DeReg Guy” a little thing like facts will not figure into your theorizing.

A minor tweak. The Commission will not apply the new rate to home shopping channels, but rolled that over into a separate rulemaking. Given my general feeling on home shopping channels and the public interest, I can't complain too loudly about this one. I don't think it's terribly needful, but I can live with it.

3) Section 616 Carriage Complaint: The process for independent programmers to file complaints with the Commission was up for major reform. It didn't happen. Score a kill for the cable guys.

That's the quick and dirty. I'll try to have more over the next couple of days. But first I gotta take a little nap. It's been a Hell of a month.

Stay tuned . . . .

posted at 01:40:29 on 11/28/07 by Harold - Category: Cable

Comments

Mike Wassenaar wrote:

Who EXACTLY benefits from reductions in leased access rates on cable systems?

I understand this lowers a theoretical barrier to entry for media producers, but has there been any analysis on who enters into these deals with cable operators?

Anecdotally, I see a lot of info-mercials on leased access across the country, selling diet powders, sleep aids, beauty creams and butt-sizer type exercise machines.

This seems to be an empty concession without a significant public interest benefit - lowering prices for advertisers.

Is there any significant, independent analysis of leased access content?

11/28/07 09:57:16

Harold wrote:

You can go read the record in 07-42. Unsurprisingly, we had a lot of fights about this and on the viability of the model.

The Community Broadcasting Association, which represents low power TV broadcasters, filed that LPTV broadcasters make considerable use of leased access because they do not have must carry rights. A couple of local programmers and ethnic programers, such as CaribeVision, also filed. They argued that they can make a living as advertiser supported programming despite paying for carriage because they target specific and underserved demographics.

The US Conference of Catholic Bishops, which we represented, has stated that they would be interested in using leased access for religious programming, assuming they can afford it.

Finally, you can check out my friends at the Leased Access Programmers Association (LAPA) at http://www.leasedaccess.org

So we see at least a handful of folks making a go of it under the current extremely high prices and lousy working conditions. I think it's reasonable to say “well, if we have a bunch of folks who can make it work for local programming and ethnic programming even under these conditions, imagine what happens if we make it easier for folks to get on?”

As always, the promise of something with potential is difficult to prove. Who benefits from BitTorrent? Only pirates and pornographers? It's now got billions of dollars in legitimate investment, because it had a chance to grow and thrive. And finally, I point out that CONGRESS mandated this. As we argued at the FCC, setting a high price for the express purpose of “throttling” leased access demand is contrary to what Congress intended.

11/28/07 10:21:39

Mike Weisman wrote:

I agree with Harold. Mike, its always difficult to imagine what might happen when we change the ground rules in the US, because this country's media landscape is so distorted and anticompetitive. If the leased access rates are lowered, we will see a much greater participation by foreign language programmers, niche news and cultural programming, and even sports channels (that are not owned by the cable hedgemons) I know this, Mike, because this programming already exists and is on the cable in Canada, in Europe, in the Caribbean, and many other places. Leased access is currently the province of (almost only) advertainment in the US because that is the only model that will work with the anticompetitive rate structure in place. A different rate structure, that leave enough money around to share between the cable platform and program producer, will very likely see some of the channels and programs currently seen elsewhere (TechTV, TV5, Deutsche Welle, Flanders TV, the Soccer Channel, The Sailing Channel (loved it!), the Tennis Channel, Mind and Body TV and many others). The cable hedgemons don't want to see this competition for attention and ad dollars, so they are only too happy to lease to the shopping channnels. But I don't see a lot more shopping channels in the future under this new ruling.

11/28/07 13:05:33

Mike Wassenaar wrote:

I understand and am sympathetic, but I also wonder about the anti-competitive nature of distribution deals in the cable and satellite industry.

For example, Deutsche Welle HAD been seen on community access channels around the country until DW signed a distribution deal with DishTV ending free-to-air distribution of German language services.

For independent producers I work with in the Twin Cities, leased access isn't a realistic option because of the distribution cost...and that's even with the new cap.

12/19/07 19:09:02

Mike Wassenaar wrote:

12/19/07 19:09:42

Mike Wassenaar wrote:

12/19/07 19:10:10

Mike Wassenaar wrote:

I understand and am sympathetic, but I also wonder about the anti-competitive nature of distribution deals in the cable and satellite industry.

For example, Deutsche Welle HAD been seen on community access channels around the country until DW signed a distribution deal with DishTV ending free-to-air distribution of German language services.

For independent producers I work with in the Minnesota, leased access isn't a realistic option because of the distribution cost...and that's even with the new cap.

12/19/07 19:11:00

Harold wrote:

Mike:

There is a separate pending FCC Notice of Proposed Rulemaking that is looking at precisely this issue, the way in which distributors and content producers compell exclusive deals or bundle programming. The situation you describe would be the proper subject of that deal.

In addition, the Section 616 complaint process allows programmers who are compelled to grant exclusivity as a condition of carriage a means of challenging such demands as unlawful.

12/19/07 19:18:04