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Cable Television:
Does Leased Access Mean Least Access?

by Donna N. Lampert

I. Introduction

In the past year, much ado has been made about cable television. Congress has debated a flurry of different bills governing a variety of aspects of cable regulation,2 and the Federal Communications Commission (FCC) issued a major new report to Congress discussing cable's role in the video marketplace and various options for altering the regulatory treatment of cable under the Cable Act of 1984.3

The recent attention to cable has been generated by several sources, including growing consumer dissatisfaction with cable service and rising cable prices,4 pressure from the telephone companies to be allowed into the video services market,5 complaints from cable's competitors about access to cable programming,6 increased interest on the part of the local franchising authorities (mostly cities, towns, and counties) in regulating cable operators as many franchises are coming up for renewal,7 and concern from broadcasters about access to cable facilities.8 Depending on whom one asks, one hears that cable is beautifully fulfilling its potential, that it is stymied from fulfilling its potential due to excessive regulation, or that is abusive because it is woefully underregulated.

At present, cable television reaches roughly 60 percent of all American television households and will undoubtedly reach two-thirds by the end of this decade.9 For those homes, cable is the broadband highway into the home for, with exceptions so rare as to be negligible, cable is a monopoly video provider. All over-the-air television signals and cable services (basic and premium) are provided at the discretion of the cable operator.10 If an operator decides not to carry a cable program or local broadcast station, those homes are denied it. If a large multi-system operator (MSO) decides not to carry a program service, that program service can be seriously hindered.

From a First Amendment perspective, which values a diversity of information sources,11 cable television is a nightmare. The Cable Act did attempt to address this fundamental shortcoming of the cable regulatory scheme in several ways. The principal way was the commercial leased channel requirement, which obligates cable operators with 55 channels or more to make available 15 percent of their channels for commercial use, and operators with 36 channels or more to make available 10 percent of their channels for commercial use by "persons unaffiliated with the operator."12 The Cable Act also provides that local franchise authorities may require cable operators to make available public, educational and governmental (PEG) access channels.13 The cable operator is prohibited from exercising any editorial control over the programming offered on both types of access channels.

These attempts at access, however, have proven to be flawed. PEG access channels are not universally required (the franchiser may concede them to the cable operator in return for other concessions). Where they do exist, their use is limited to not-for-profit video programming. Most significantly, when it comes to commercial leased access, the bargaining leverage is entirely with the monopoly cable operator. As a result, the leased access provisions of the Cable Act have wholly failed to serve their intended purpose.

The difficulty of gaining access to the single video gateway into the majority of American homes is today one of the most serious issues for policymakers concerned with cable regulation. Effective access would help alleviate some or the negative impact of compounded integration in the cable industry, including the problem of "vertical integration" of MSOs and their programmers, by spurring the introduction of new programming sources. Most importantly, it would go a long way towards setting cable on sounder First Amendment footing. This paper will examine the promises and failures of the leased access concept, and offer some suggestions as to how leased access can be made more effective. A view from the cable industry is also presented.