FCC to hear disputes on channel access

Cable, satellite and phone companies largely try to win video customers by offering different services and prices — not so much different channels.

But that could change depending on how the new Federal Communications Commission, under Chairman Julius Genachowski, deals with several cases that raise the question: How much leeway should vertically integrated cable operators — those that also own channels — have to help themselves and hurt the competition?

"This is important," says Andrew Jay Schwartzman of Media Access Project, a public interest law firm. "Cable companies have maintained a tight lock on preferred programming."

Verizon last week asked the FCC to change that in a case involving Cablevision.

Verizon says it needs the high-definition version of Cablevision's MSG regional sports channel, which has New York Knicks basketball and New York Rangers hockey games.

Although it offers MSG in standard definition, for sports fans, "a service lacking their teams games in HD is not a meaningful choice," Verizon said in its complaint.

AT&T makes a similar argument in a challenge to Cox Communications' refusal to provide San Diego Padres games.

The phone companies say that Congress wanted to promote competition in a 1992 law that requires vertically integrated cable companies to offer their channels to rivals.

But that law only applies to channels sent to distributors via satellite, using the public airwaves.

"The FCC on more than one occasion has said it does not have jurisdiction" over channels distributed via private wire lines, says Burt Braverman, a lawyer at Davis Wright Tremaine.

That's how MSG-HD is distributed.

Cable operators also say they deserve to benefit from investments they've made to buy or build popular local channels.

Competition from satellite and phone companies is intensifying. And "The idea that a phone company more than 10 times our size would need a regulatory bailout is absurd," Cablevision said in a statement.

While video distributors slug things out, independent channels are waiting to see what the FCC does with a challenge to cable raised by WealthTV, an HD channel that focuses on affluent lifestyles.

It asked for help saying that Comcast, Time Warner Cable, Cox and Bright House Networks refused to carry WealthTV in order to help Mojo HD, a service that the cable companies own. (It is now a video-on-demand offering.)

The cable operators say that the channels were distinct, and they didn't favor one over the other because of ownership.

Last week, the FCC's Enforcement Bureau sided with the cable operators. The case now goes to an administrative law judge who'll recommend to the FCC how it should vote.

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