Cable operators ignore intent of Congress with blessing of FCC's Media Bureau to drive leased access out of existence
- Category: FCC Information
- Published on Friday, 10 January 2014 09:03
- Hits: 3757
At the beginning of 'leased access' FCC was concerned cable operators would have financial incentives to place the programming on channels that offered them nowhere near the same marketing opportunity as the operator.
From our association files we find that in 1992—Congress responds unequivocally to the FCC’s request in the 1992 Cable Act, and directs FCC to promulgate rules within 180 days of the Act’s passage, establishing maximum reasonable rates that a cable operator may charge such leased access programmers.
“The principle reason for (the) deficiency (in leased access programming) is that the (1984) Cable Act empowered cable operators to establish the price and conditions for use of leased access channels… The Committee is concerned that cable operators have financial incentives to refuse leased access channel capacity to programmers whose services may compete with services already carried on the cable system, especially when the cable operator has a financial interest in the programming services it carries”. LAPA note…This was prior to the time operators began making serious income from ‘ad inserts’. Now with ad insert income plus commercial sales on local origination channels, including photo-display channels, cable operator definitely have a financial stake in NOT allowing LAPers ‘live’ feeds to enable them to truly compete with the cable operator’s own interest. H.R. Rep. No 628, 102nd Cong., 2nd Sess. 39 (1992)
The Senate Commerce Committee largely agreed. As the basis for its support of new leased access regulatory authority, the Committee cited its concern that a cable operator’s market power may be used to the detriment not only of consumers, but also of competing programmers. S. Rep. No 92, 102nd Cong.1st Sess. 23 (1991). Leased access was intended “to remedy market power in the cable industy.” Specifically, leased access was a “safety valve for programmers who may be denied access (or) given access on unfavorable terms. S.Rep. #92,
Based on a 2008 order by the Media Bureau that refused to even recognize language in the rules regarding placement cable operators were given free range to place leased access on digital tiers as long as the channel had more than 50% of the system subscribers.
Here's the rule: Sec.76.Error! Hyperlink reference not valid.Commercial leased access terms and conditions.
(a)(1) Cable operators shall place leased access programmers that request
access to a tier actually used by most subscribers on any tier that has a
subscriber penetration of more than 50 percent, unless there are technical
or other compelling reasons for denying access to such tiers.
Note the rule does not say it is to be placed on channels with only more than 50 percent but instead specifically says MOST subscribers use on any tier with more than 50 percent.
Leased access was created by an act of Congress long before cable discovered they could generate massive amounts of revenue by selling local 'ad inserts' in network channels. Today, a large degree of a systems income comes from ad sales and/or selling time for infomercials. Cable ad sales is the most serious competition local leased access programmers have for local business advertising, the main source of funding for the locally focused, locally produced TV shows aired by LAPers (Leased Access Programmers).
Today many sites have their ad sales personnel manage leased access the ultimate in having the fox guard the henhouse.
Additionally by moving leased access to digital tiers, sites have cost LAPers serious income due to many local businesses not wanting to purchase advertising on channels that don't reach the majority of subscribers.In fact one cable operator, Charter, wrote a local subscriber at Lake of the Ozarks saying:
We appreciate you taking the time to contact us with your concern about Lake TV.
On April 17, more than 90 percent of the channels in Charter services areas in Missouri and Illinois were reassigned in order to group channels by genre, (making it easier for customers to find similar programming), 6 channels were upgraded to a digital format and 28 new HD channels were added. Lake TV was assigned channel 90 from 24.
(Unrelated comment deleted)
As you can see, this cable executive, Jerry Stelle, Manager of Advanced Media & Alternative Revenue, responsible for maximizing the systems ad revenues, was thoughtful enough to provide a name and number for their ad sales rep--the competition to the LAPer for local ad business.
But does the Media Bureau care?Apparently not.
Due the FCC Commissioners care?Who knows?There is strong reason to suspect those career levelemployees in the Media Bureau go to great lengths to keep the chairman and/or commissioners from knowing how they've aided cable in ignoring the wishes of Congress.
Big government likes big business.The small businesses like leased access programmers be damned. I wonder how much members of Congress would appreciate knowing yet another federal agency seems to have no respect for them?
We have 10 guests and no members online