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FCC wants to get rid of key cable programming rule

December 15, 2009 |  4:32 pm

Talk about good timing.

The Federal Communications Commission is pushing to change an arcane but important rule that benefits the cable industry at a time when the nation's biggest cable operator may be wary of putting up a huge fight.

If we try to explain what the rule is, our heads will explode. Instead, we will explain what the rule allows and then explain why.

In Philadelphia, Comcast owns a sports channel that carries the local teams. That channel is available to Comcast subscribers but not to anyone who subscribes to satellite broadcasters DirecTV or Dish. In San Diego, Cox owns a channel on its cable system that carries the Padres that you can't get if you subscribe to AT&T's U-Verse. In New York, Cablevision doesn't let Verizon or AT&T carry some versions of its sports channels.

Although the FCC has rules -- known as program access -- that prohibit cable operators that own programming from refusing to sell their networks to competing distributors, these particular channels have an exemption known as the terrestrial loophole. In a nutshell, the channels mentioned above are not national but local, and hence distributed on landlines and not through satellites. As pretty much all the channels that meet the conditions of the loophole are local sports channels and such channels are hugely popular, this regulation is very important to the cable industry.

But with Comcast in the process of trying to acquire control of NBC Universal and with regulators, lawmakers and consumer activists already voicing concern about what the marriage of the cable and broadband giant with the big programmer could mean for competition, it can't really go guns blazing at the FCC to keep the loophole intact. Cablevision and the National Cable & Telecommunications Assn. issued statements in support of the loophole, but Comcast is staying silent for now.

DirecTV has come out in support of gutting the loophole. Of course, DirecTV has exclusive content of its own in the form of the NFL Sunday Ticket package. The cable industry would love to have that. Maybe if the FCC gets rid of the loophole, DirecTV will tell the NFL to let everyone have access to Sunday Ticket. Yes, I'm laughing as I type this.

Phone companies AT&T and Verizon want the government to get rid of the loophole too and yet at the same time are against the FCC making rules regarding network neutrality on the Internet.

"The idea that the nation's two largest phone companies, AT&T and Verizon, need a regulatory bailout is absurd," said Cablevision.

The FCC is expected to make a decision on whether the loophole stays sometime early next year. The loophole is part of the commission's much bigger program access rules that Comcast and Cablevision are fighting in court to have thrown out. 

-- Joe Flint

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