Claiming that the competitive landscape is shifting, small cable operators
want new federal rules that would require direct-broadcast satellite carriers to
allow small cable MSOs to distribute programming carried on DBS systems.
The American Cable Association -- which represents 900 small cable operators
serving 7.5 million subscribers -- floated that proposal in comments filed
Monday at the Federal Communications Commission.
Coupled with the first proposal, the ACA said the FCC should require large
cable MSOs with programming interests to continue to sell their networks to
small cable operators but not to the two big DBS firms, EchoStar Communications
Corp. and DirecTV Inc.
Under FCC rules, cable operators that own satellite-delivered networks must
sell them to other cable operators and DBS competitors. The must-sell
requirement expires Oct. 5 unless it is extended by the FCC, which is reviewing
the issue.
In a statement, ACA president Matt Polka said because EchoStar and DirecTV
are planning to merge to form one of the largest pay TV distributors, with at
least 14.9 million subscribers, the merged DBS firm would not need federal help
in gaining access to cable-affiliated programming.
'As the dominant [pay TV distributor], particularly in rural markets,
EchoStar/DirecTV no longer needs protection of the prohibition. This position
simply recognizes the fact that [EchoStar chairman and CEO] Charlie Ergen and
the EchoTV conglomerate don't need help to compete in any market,' Polka
said.
It was unclear what impact forcing DBS carriers to sell their programming
networks to cable operators would have.
DirecTV is not affiliated with any programmer.
EchoStar plans to affiliate with Vivendi Universal in a $1.5 billion deal in
which Vivendi would acquire 10 percent of EchoStar and 5 percent of
EchoStar-DirecTV if those companies merged.
Vivendi plans to create five programming channels for EchoStar's platform.
However, the companies agreed that EchoStar would not have exclusive access to
that programming, EchoStar spokesman Marc Lumpkin said.
In interviews Monday, Polka and ACA attorney Christopher Cinnamon said their
proposals to extend program-access rules to DBS were not geared to
DBS-affiliated programming since there isn't any yet.
Instead, they said, they wanted the FCC to address EchoStar's and DirecTV's
refusal to allow small cable operators to distribute local TV signals and
distant network signals carried by those DBS firms.
They said they also want the FCC to consider forcing the National Football
League and DirecTV to make the 'NFL Sunday Ticket' package of out-of-market
football games available to small cable operators.
Polka said that although the FCC might not have legal authority to impose new
program-access rules on DBS, the agency could change the program-access playing
field through the imposition of conditions on the EchoStar-DirecTV
merger.
