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Broadcasters Fight Retrans Flank Attack

To the FCC, it’s a periodic review of the commission’s media ownership rules. To broadcasters, it’s the start of another battle to protect a retrans stream that flows with new revenue.

Broadcasters are attempting to keep the retransmission consent process from being collateral damage in the FCC’s latest review. At stake are potentially billions of new dollars that cable operators say come at the expense of cable’s customers and operators’ bottom lines. And critics of broadcasters’ increasing calls for cash for their signals are using the media ownership rule review to press their case.

If broadcasters needed proof of a flank attack, they got it from the National Cable & Telecommunications Association, which does not typically weigh in on media ownership issues affecting broadcasting. But in this case, it broke precedent due to what it called the “interplay” between ownership and the retrans regime. The NCTA asked the FCC to ban local marketing agreements and shared service agreements that allow broadcasters to negotiate retrans deals for more than one station in a market.

The FCC’s authority over retransmission consent negotiations is limited to ensuring that they are conducted “in good faith,” but cable operators are looking to leverage the commission’s greater purview over media ownership to get at retrans.

“The Commission should also ensure, through its ownership restrictions, that retransmission consent stations do not act collectively to enhance their market power,” said the NCTA in a statement.

Separately, a new coalition formed by Time Warner and the American Cable Association lobbied the commission for retrans “fixes.” Time Warner, not mincing any words, has called the joint operating and marketing agreements “sham trusts” that circumvent the rules, with the FCC partly to blame through its own lax enforcement.

This activity comes against the backdrop of the high-profile retrans negotiation between Disney/ABC and Time Warner, whose deals for cable and TV station carriage expire at the end of the month.

The National Association of Broadcasters argued in its comments at the commission that local marketing agreements were in common use when the FCC adopted the “good faith” requirement for retrans negotiations, but that neither it nor Congress placed any limits on the number of markets or systems that could be included in a single negotiation.

“It’s obvious that our cable friends are grasping at straws to help tilt government in their favor on retransmission consent,” NAB President Gordon Smith told B&C. “But it’s a real stretch to link retrans to media ownership rules. We’re hopeful policymakers will avoid picking retrans winners and losers, and will allow free market negotiations between two parties to proceed without government interference.”

It is unclear when the FCC will weigh in on media ownership. A federal court is considering challenges to the agency’s last media ownership rule change in 2008, when it loosened but did not lift the ban on newspaper-broadcast cross-ownership. Even as the FCC is defending the change, it declares it may come up with a different answer this time.

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