Citizens Against Government Waste (CAGW), Taxpayers Protection Alliance and the Center for Individual Freedom (CFIF) are sending out "Dear Legislator" letters letting Congress know that while they still think it needs to do more reforming of retrans, the groups support the "first step" of eliminating the broadcast exclusivity rules.

FCC chairman Tom Wheeler in August circulated an order that would eliminate the syndicated exclusivity and network non-duplication rules that prevent MVPDs, except in a few specific circumstances, from importing duplicative distant TV station signals into local markets.

In their letters, the groups suggest the rules are a government thumb on the scale for broadcasters that the FCC needs to remove.

"We believe that the federal government should not be in the business of picking winners and losers or tilting the playing field in any industry," CFIC said in its letter.

"While CAGW would support additional retransmission-consent reforms similar to those included in the Next-Generation Television Marketplace Act introduced in 2012 by Rep. Steve Scalise (R-La.), Chairman Wheeler’s proposal is a first good step toward modernizing the rules that regulate the video marketplace" CAGW told legislators in its letter.

Cable operators support eliminating the rules, calling them an unnecessary regulatory backstop to private contracts, which can still protect exclusivity and localism, while broadcasters are pushing back hard, saying eliminating the rules threatens localism and their business model.

The war of words between cable operators and broadcasters (and the government) over carriage and exclusivity issues continued apace Thursday, with the American Cable Association responding to the National Association of Broadcasters, which invoked ACA in its response to an FCC blog on exclusivity rules.

Following FCC Media Bureau Chief Bill Lake's blog calling for an end to the syndicated exclusivity and network nonduplication rules, which FCC Chairman Tom Wheeler has proposed, the National Association of Broadcasters fired back Wednesday (Sept. 23) in a blog by NAB executive Rick Kaplan (https://nabroadcasters.wordpress.com/author/rickaplan/). He said Lake was trying to rewrite history with a fatally flawed attempt to defend the chairman and reverse "the palpable lack of enthusiasm for the Chairman’s plan."

He also, almost as a throwaway line at the end, said that "even the American Cable Association (ACA) only supports the change insofar as it leads to the Commission outlawing exclusive broadcaster arrangements altogether."

ACA begged to differ, and said so in a statement Thursday.

“ACA believes is it important to point out that NAB mistakes ACA’s position in its blog -- namely, that the FCC should outlaw exclusivity arrangements entered into through private contract altogether," said ACA President Matthew Polka. "ACA’s position has always been that should the FCC repeal the exclusivity rules, it should seek to protect traditionally offered out-of-market stations, like significantly viewed stations, at the same time, and does not need to limit other types of exclusivity arrangements."

Polka took his criticism a step further. "Such a blatant mistake warrants policymakers who read the NAB blog to fact-check all of NAB’s claims in the blog to make sure they are not also mischaracterized.” 

“Facts are stubborn things," said NAB spokesperson Dennis Wharton. "Instead of engaging in doublespeak, if ACA simply reviewed the record it would realize that it or its lawyers absolutely have asked the Commission to bar all forms of exclusivity contracts. ACA is either suffering from short-term memory loss or presenting disingenuous arguments to the Commission.”

Broadcasters are pulling out all the stops in their effort to prevent the FCC from eliminating the syndicated exclusivity and network non-duplication rules.

In a filing at the FCC Tuesday (Sept. 15), the National Association of Broadcasters reminded the commission of a GAO report from earlier this year concluding that there could be harmful consequences if the FCC removed the rules without also eliminating the compulsory license that excludes cable and satellite operators from having to negotiate for the content within broadcast signals (the retrans negotiation is for the value of the TV signal as a one-stop delivery system for news and entertainment programming).

The NAB pointed to an April GAO report that concluded the exclusivity rules are part of "a broader broadcasting industry legal and regulatory framework, including must-carry, retransmission consent and compulsory copyrights."

The GAO drew no conclusions about consequences brought up by both cable and broadcasters for the report, saying that [t]he effects of eliminating the exclusivity rules are uncertain, because the outcome depends on whether related laws and rules are changed and how industry participants respond."

But one result of eliminating the rules, the GAO said, could be to reduce station investment in content, including local news -- something broadcasters told the GAO could happen. It added that if copyright law was amended in "certain ways" -- one way would be to eliminate the compulsory license -- that would allow the NFL or broadcast networks, for example, to ensure that retrans agreements excluded distant signal importation of certain content -- unless of course the FCC decided in its separate retrans good-faith review that such exclusivity was not in good faith.

The NAB said the GAO report provided "yet more evidence that the Commission should decline to act in a piecemeal fashion by eliminating its program exclusivity rules applicable to cable operators, but should defer to Congress, the only entity capable of addressing the entire framework as a whole."  

While FCC chairman Tom Wheeler has proposed eliminating the rules, circulating an order to that effect last month, one commissioner aide has said a yes vote is not a slam dunk, while another said they were still taking meetings.

"We urge the commission to reject the current proposal to eliminate its exclusivity rules applicable to cable operators while they still have the right under their compulsory license to import programming contained in distant broadcast signals at government-set, below market rates," the NAB said.

Since Congress could likely not take such action on the compulsory license for months, if it succeeded at all, the FCC would likely have to hold off on approving the order until sometime next year. Then again, the chairman might not get the three votes he needs.

The GAO has also been asked by Congress to study the compulsory license and report by June 4, 2016, on that and any related administrative actions, which would arguably include syndex and network non-duplication.

The FCC has scheduled a vote at its Sept. 17 meeting on the order, circulated Aug. 12, allowing broadcasters to put contest rules online, rather than having to put them on air in tiny screen type or rapid-fire oral descriptions on radio, but a proposed framework for third-party access to sensitive information in the Charter/Time Warner Cable remains in limbo even though it has three votes to approve.

That is according to a tentative agenda for that meeting. It has support from both Democrats and Republicans, so passage should not be a problem. The contest rules item was one of a series of Media Bureau items circulated by the chairman for a vote several weeks ago.

Expected to be voted before that meeting is an item launching a review of the definition of retransmission consent good faith negotiations, which has to begin by Sept. 4 per a congressional deadline.

It is not clear when the chairman's proposal to eliminate syndicated exclusivity and network nonduplication rules will be voted, or the proposed new protective orders for sensitive information in the FCC's review of the proposed Charter/Time Warner Cable merger will become official.

The latter already has three Democratic votes, but does not become official until all the commissioners have voted it, which they have not, an FCC spokesperson confirmed. Eventually if will become approved de facto, but the other commissioners have three weeks from the time the deciding vote has been cast to vote the item and can get an additional extension from the chairman.

The chairman has said the clock won't start vetting the deal, and more importantly, the comment cycle for public input won't begin, until the orders are voted.