Update 1/21/10: Cablevision Systems issued a statement disagreeing with the FCC decision, but also saying the company is "pleased
that the FCC recognized the value of Cablevision's local programming strategy and investments. Verizon and AT&T will not receive an FCC bailout that will allow them to capture News 12, MSG Varsity and other programming that we have developed for our customers." The statement added that Cablevision is satisfied that the FCC's complaint process allows the company to defend itself as telcos allege anti-competitive behavior.
Also, it appears that the FCC decision will apply only to local sports content, and not to local news content.
Original post: The Federal Communications Commission ruled by a 4-1 vote Wednesday, Jan. 20 that a loophole that has allowed cable TV companies to keep telco TV operators and other competitors from offering their local content is unfair. Though cable TV firms by federal law are supposed to allow competitors fair access to their local sports and informational channels, they frequently have kept those competitors from gaining access by leaning on legal fine-print that allows them to deny access if the content doesn't travel over a satellite feed.
Verizon Communications and AT&T (the latter with help from the Connecticut Attorney General) both have attacked cable companies within the last year over specific instances in which they were denied local sports content. After the telcos complained, the U.S. Department of Justice said it would look at the matter.
The FCC decision may be seen as a bit of a surprise because some observers have questioned the agency's legal power to rule on the issue. Also, the FCC has been busily trying to meet its obligation to formulate a national broadband plan, and the issue of content exclusivity, while increasingly controversial, would appear to be less of a priority.
The FCC's vote is the second regulatory knock against content exclusivity within the last week. In France last week, a competition council said last week that France Telecom's Orange should not be allowed to lock up exclusive deals for sports programming.
Expect the cable TV industry to fight the FCC ruling.
- The Wall Street Journal has this story
Orange's content strategy was dealt a regulatory blow
The Dept. of Justice said it would examine cable content practices
Verizon complained about Cablevision programming practices
We predicted telcos would launch their own local channels. Maybe not