More than likely on Oct. 5, 2012 current Program Access Rules will get the boot. It is no secret that the FCC decided, not only review, but probably drop the long-standing rules established in 1992 to make cable operators comply with selling vertically owned programming to its competitors. The agency initiated a rule-making on March 20, 2012 to get comments and feedback on whether those rules, now 20 years old and renewed twice, are not needed anymore to curb perceived abuses in competitive behavior.
Abuses no longer seem to be an issue as competition in service provider markets are thriving with the likes of DirecTV and others, including Over-The-Top competitors are competing with cable operators quite well. Comcast, the largest video provider in the US is currently held to independent rules established by the FCC as concessions to approve a Comcast/NBC Universal merger. Is this enough independent oversight to make an even playing field to insure competition in the video market?
FCC commissioner, Julius Genachowski probably knows the votes to continue regulating the cable industry on outdated principles of vertical integration just does not have any relevance in today’s economy. It is a good signal for business economics that older regulations are being reviewed and those which signal insignificance will be discarded as having served their initial purpose. Surprisingly, this move coming from a Democratic Administration indicates intelligence and forethought in keeping up with changing dynamics of vertically integrated markets.
There are those who remain skeptical of cable operators as owners of regional sports programming. Competitors like Verizon and DirecTV and US Telecom have concerns with the regional issue, saying that these channels could be withheld from mainstream competitors to gain a competitive advantage regionally. That concern translates to gaining a national advantage by region, where sports programming is highly profitable with strong viewership.
Businesses want less regulation to deal with, obviously, and the FCC seems confident that these type issues can be handled on a case-by-case basis. Making this a true statement seems easy enough, however, if a lack of regulation permits abuses by usurping complaints, making it difficult for a competitor to get quick relief, nothing is accomplished. To end regulation, the FCC must streamline the complaint process to deal with anticompetitive behavior quickly and decisively. Appeals can drag through the court system slowly, irreparably hurting a competitor’s market position.
A case in point, the Bloomberg Vs. Comcast News Channel Neighbor-hooding rule established by the FCC as a result of a Comcast-NBCUniversal merger. Concessions in the merger agreement required Comcast to neighborhood competitor news channels if it neighbor-hooded other like channels. This case has dragged on for a year requiring endless litigation from both parties. While channel realignment is not an easy process the original agreement was upheld by the FCC in a recent decision, both quick and expeditiously.
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