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ACA, Independent Cable Programmers Tell FCC To Address Channel Bundling First

Issue Takes Priority Over MFNs, ADMs In The Case Of Smaller Operators And Programmers

PITTSBURGH, Jan. 26, 2017 - The American Cable Association and three independent programmers urged the Federal Communications Commission to address the harms associated with channel bundling, an industry practice where large, powerful programmers require smaller multichannel video programming distributors (MVPD) to clog their systems with unpopular channels in order to carry channels actually desired by consumers.

ACA, MAVTV Motorsports Network, One America News Network and AWE, and RIDE TV argued that channel bundling should take precedence over two other areas that the FCC had proposed to address; namely, unconditional "most-favored nation" (MFN) clauses and unreasonable alternative distribution method (ADM) provisions.

"The FCC's proposed regulations of unconditional MFN and unreasonable ADM provisions can represent positive steps towards improving the availability of independent programming.  The diversity interests identified by the FCC, however, cannot be meaningfully protected without regulations addressing the unreasonable bundling practices of large programmers.  ACA urges the FCC to include regulations limiting forced bundling by programmers in the rules adopted through this proceeding," ACA President and CEO Matthew M. Polka said.

Putting channel bundling in context, ACA and the programmers said large programmers force small cable operators to carry numerous channels they would not carry otherwise.   For example, a small cable operator that wants to get the must-have programming from nine of the largest media groups-Disney/ESPN, Fox, Comcast/NBCU, Turner, Viacom, AETN, AMC, Discovery, and Scripps-through the National Cable Television Cooperative buying group must carry 65 channels at a minimum.

ACA's comments came in response to an FCC Notice of Proposed Rulemaking entitled "Promoting the Availability of Diverse and Independent Sources of Video Programming."

To the extent the FCC decides to act on MFNs and ADMs, ACA and the programmers suggested the following steps be taken into consideration:

 

  • The FCC should restrict large MVPDs only from entering into unconditional MFNs with all "video programming vendors." Unconditional MFNs between large MVPDs and large programmers preclude carriage of independent programmers every bit as much as those forced upon independent programmers themselves;
  • The FCC should also examine unconditional MFNs demanded by broadcasters. These too can operate to preclude carriage of independent programmers; and
  • If the FCC is going to restrict "unreasonable" ADMs, it should also specify certain practices as presumptively reasonable. For example, the FCC should identify as presumptively reasonable short-term restrictions on distributing programming for free online and conditional "MFN-like" rate protections for MVPDs against rates charged for online distribution.

About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America.  Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business.  For more information, visit http://www.americancable.org/

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