FCC Proposes Rules To Increase Availability Of Diverse And Independent Progamming To Consumers

The Federal Communications Commission issued a Notice of Proposed Rulemaking to foster consumer choice and access to diverse programming on television.

The proposed rules may prohibit the use of certain clauses in pay TV programming distribution contracts that impede carriage of independent and diverse programming. Specifically, the proposed rules would prevent pay TV providers from including so-called “unconditional” most favored nation (MFN) and “unreasonable” alternative distribution method (ADM) clauses in their contracts with independent programmers. An “unconditional” MFN clause entitles a pay TV provider to receive favorable contract terms that a programmer has given to another programming distributor, without requiring the pay TV provider to assume any corresponding obligations from the other distribution agreement. An ADM clause generally prohibits or limits a programmer from putting its programming on alternative video distribution platforms, such as online platforms. The FCC seeks comment on the specific kinds of ADM clauses that it should prohibit as unreasonable.

The proposed rules are a result of the input received from an inquiry the FCC opened into the state of diversity in the video programming market. The FCC held two workshops on the issue to examine the state of the video marketplace, challenges faced by distributors of video programming, and marketplace obstacles that affect the provision of independent and diverse programming to consumers.

Chairman Wheeler, Commissioners Clyburn and Rosenworcel approving. Commissioners Pai and O’Rielly dissenting.