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August 12, 2011

Communications Providers Struggle With New FCC Rule

By Susan J. Campbell, TMCnet Contributing Editor

In the drive for rich, multimedia content consumption, communications providers are trying to determine the best way to manage the increased demand on their networks, while also satisfying the needs of a wide subscriber base. When the FCC (News - Alert) gets involved, the dynamics can be challenging. 

This recent article in the Newsfactor Business Report highlighted that the Federal Communications Commission (FCC) has introduced a new rule that will prevent cable-TV and other communications providesr from removing video content that has been produced by independent program vendors, as a way to secure leverage in contract disputes. 

This rule aims to deliver benefits to consumers by creating a healthy environment for competition and diversity within the video distribution and programmingmarket. This FCC order provides the specific requirements and procedures by which the agency will consider requests from communications providers to issue a temporary freeze on price, terms and other conditions regarding existing contracts. 

The Media Access Project, a consumer-advocacy organization, had a positive reaction to this new procedure. Media Access Policy Director Andrew Jay Schwartzman shared in the report that it will promote diversity in cable-TV offerings to ensure that independent cable channels have a chance at getting the carriage needed on large cable systems. 

Some communications providers offer extensions on a month-to-month basis after their carriage contracts have ended. The challenge is that there is still an ongoing uncertainty that has had negative consequences for vendors. And, as communications providers on the cable side are more likely to be content producers themselves, there is always more incentive to favor their own content over that of an independent producer. 

FCC Commissioner Michael Copps (News - Alert) noted that modernizing these rules has proven essential to ensure that consumers have the ability to view a variety of diverse programming at a cost that is the lowest possible, which can hopefully foster more independent production. 

The FCC previously had a complaint process in place to resolve such issues; a process that was criticized by communications providers as being slow, unfair and impractical. The new deadlines for taking action on program-carriage compliances are expected to offer a greater element of predictability to programmers and operators waiting on a decision. 

The new standstill policy is being adamantly opposed by the U.S. cable industry as these communications providers believe it shows little regard for the limits of the agency authority in the situation, or constitutional rights. They all tend to see it as a disturbing lack of appreciation on the potential effects of government intervention on the marketplace and its consumers. 

"We are profoundly disappointed not only in what the FCC did but how they did it," said National Cable & Telecommunications Association (NCTA (News - Alert)) CEO Michael Powell, in the Newsfactor Business Report. "Regrettably, we must now explore other avenues for redress." 

What will this new rule mean for the future of communications providers? We will likely continue to see opposition and further action.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.

Susan J. Campbell is a contributing editor for TMCnet and has also written for To read more of Susan’s articles, please visit her columnist page.

Edited by Jamie Epstein

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