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FCC Comments regarding the News Corp. Petition for Modification of Conditions

Submission Date: 
05/01/2008

I. INTRODUCTION AND SUMMARY
The Commission should deny News Corp.’s Petition for Modification (“Petition”) based on the following:

  • The Petition shows how News Corp. has blatantly manipulated Commission processes to suppress scrutiny from an issue of decisional significance to the Liberty/DirecTV transaction. For twelve months, while trying to get its deal approved, News Corp. maintained that the conditions were scheduled to remain effective through 2010, and that any consideration of removing the conditions was “irrelevant” and a “waste of Commission resources.” Then, less than two weeks after the Commission consented to the transaction, News Corp. changed its story and sought removal of conditions. This lack of candor interfered with consideration of an issue of substantial significance to the Commission’s review of the transaction. The Commission should not reward this misbehavior.
  • The conditions continue to have substantial public interest benefits, including maintaining access to “must have” programming and avoiding disruption of customer viewing patterns. Moreover, there isno countervailing harm to retaining the conditions; all evidence indicates that News Corp.’s businesses have flourished in the past four years.

For these reasons, the Commission should deny the Petition and maintain the News Corp./DirecTV conditions for their full term. If the Commission does not summarily deny the Petition for the above reasons, it should defer any decision until it completes its current program access rulemaking (“Program Access FNPRM”).1 In that proceeding, the Commission and others have raised questions whether similar constraints should be imposed on the exercise of market power in a broader range of programming and retransmission consent transactions. To avoid substantial disruption to the marketplace from repeatedly altering the terms of transacting with Fox, the Commission should wait until concluding the Program Access FNPRM, then consider the Petition if necessary.

The American Cable Association. ACA represents nearly 1,100 independent cable businesses serving nearly 8 million cable subscribers primarily in smaller markets and rural areas. ACA member systems are located in all 50 states, and in virtually every congressional district. ACA members range from family-run cable businesses serving a single town to multiple system operators that focus on smaller systems and smaller markets. About half of ACA’s members serve less than 1,000 subscribers. All ACA members face the challenges of building, operating, and upgrading broadband networks in lower density markets.

ACA members share a vital interest in this proceeding. ACA members report that the News Corp. conditions have brought a measure of stability to Fox-affiliated retransmission consent and RSN renewals. This has benefited consumers by maintaining access to “must have” programming and avoiding disruption of customer viewing patterns. Withdrawal of these conditions place small and medium-sized cable companies and the consumers they serve at serious risk.

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