The top cable companies in the US have agreed to offer customers a “family-friendly” pay-TV offering as early as the first quarter of next year, but signalled that any attempt by the government to impose new legislation on the industry to combat concerns about indecency would face a tough legal challenge.
Time Warner, Comcast and other cable operators agreed to create a family tier - a package of channels aimed strictly at a so-called family audience - following an intense campaign in Congress and by Kevin Martin, the chairman of the Federal Communications Commission, to compel the industry to adopt tougher self-regulatory guidelines.
Kyle McSlarrow, chief executive of the National Cable and Telecommunications Association, said in a hearing before Congress on Monday that many cable groups intended to offer a family tier, but that the decision was rife with complications because of existing contractual agreements between cable operators and content providers.
Mr McSlarrow said the decision by some cable companies to offer a family tier would lead to some “very serious negotiations” between cable operators and programmers, and hinted that the move by operators to take on such a difficult task should lead Congress to take proposed legislative fixes “off the table”.
The cable industry’s decision to capitulate to the demands of the FCC and Congress in spite of those contractual difficulties underscores how vulnerable the industry is to Washington lawmakers and regulators.
Mr Martin’s recent call for cable operators to adopt self-regulatory measures to help parents cope with programming that he said too often pushed the “bounds of decency” has coincided with his ongoing regulatory review of a separate but crucial deal for the industry’s two largest players: the joint takeover of Adelphia by Time Warner and Comcast.
People close to the cable industry have denied speculation that Mr Martin has implied behind closed doors that approval of the merger would hinge on whether cable groups acted on his concerns on indecency. But they acknowledge that they are aware of the Adelphia issue as they move forward on plans to create family-tier programming.
Mr Martin last week did not rule out imposing a condition on the Adelphia merger that would force Comcast and Time Warner to adopt a family-friendly tier. The FCC chairman said after a commission meeting on Friday that his investigation of the deal, which has surpassed the FCC’s standard 180-day review period, was not far along enough to consider possible conditions.
Blair Levin, an analyst at Stifel Nicolaus in Washington, said he believed the cable move would “at least indirectly” help Comcast and Time Warner in connection to the Adelphia deal.
Both Mr McSlarrow and Jack Valenti, a veteran of the entertainment industry, on Monday peppered their remarks before Congress with frequent references to the constitutional right to free speech, alluding to what would likely be a fierce legal showdown before the Supreme Court if regulators or lawmakers moved ahead with plans to impose new laws on the cable industry.
Additional reporting by Aline van Duyn