On January 20, the FCC released the First Report and Order in MB Docket No. 07-198 (Program Access R&O) establishing procedures for pay-TV providers to obtain “must have” television programming from competitors. Among other things, the new rules apply to cable operators that have withheld from competitors terrestrially delivered regional sports networks, thus closing the so-called “terrestrial loophole” that has long frustrated satellite providers and other competitive video providers.

Section 628(c)(2) of the Communications Act requires the Commission to adopt regulations prohibiting cable operators or affiliates from engaging in unfair acts involving cable-affiliated programming that is delivered to cable operators via satellite link. Until now, cable operators have been able to escape this requirement (and thus withhold valuable content from competitors) if the programming was delivered to the cable operator via fiber or other terrestrial connection rather than via satellite.

The new Program Access R&O concludes that the FCC has authority under Section 628(b) of the Communications Act to take action if a cable operator engages in unfair acts with respect to terrestrially delivered, cable-affiliated programming that significantly hinder a multichannel video programming distributor from providing cable-owned programming to consumers. To address specific complaints about cable operators withholding certain valuable sports programming, the Program Access R&O adopts a rebuttable presumption that an unfair act involving a terrestrially delivered, cable-affiliated regional sports network triggers Commission oversight under Section 628(b). Complainants may pursue program access claims similar to the claims they previously have been able to pursue for satellite-delivered, cable-affiliated programming.

Because claims involving terrestrial programming require an additional factual inquiry regarding whether the unfair act “significantly hinders the complainant from providing satellite cable programming to consumers,” the Commission plans to allow additional time to present rebuttal information. The Public Notice accompanying the Program Access R&O notes that several complaints already are before it alleging that cable operators are withholding terrestrially delivered regional sports networks. Each of those complaints must still be considered by the FCC, but complainants may decide either to pursue their claims as filed or, should they want to invoke the added protections contained in the Program Access R&O, may file a supplemental filing alleging that the defendant has engaged in an unfair act after the effective date of the new rules.

The Commission passed the item 4-1, with Commissioner McDowell voicing concerns that Section 628(b) does not authorize the FCC to regulate programming delivered over terrestrial links.