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Fate of Exclusivity Rules Unclear

WASHINGTON — Broadcasters appear to be getting some traction in their effort to head off Federal Communication Commission chairman Tom Wheeler’s proposal to eliminate the agency’s syndicated exclusivity and network nonduplication rules.

They are doing so by tying those rules to the compulsory copyright license, which allows pay TV providers to deliver the syndicated and network content on broadcast stations without separately negotiating for it.

FCC sources signal the commissioners are still vetting the arguments, including not getting rid of the rules without Congress also scrapping the compulsory license; that the item may not get voted on anytime soon; and that a “yes” vote is far from a slam dunk. At press time, there were not enough votes, according to a source familiar with the item’s status.

Wheeler in early August circulated an order that would get rid of the rules, which prevent pay TV providers from importing duplicative syndicated or network programming into local TV markets via out-of-market stations. Cable operators have been pushing for their elimination so they could potentially offer alternatives during retransmission-consent impasses or blackouts, saying those regulations were another thumb on the scale for broadcasters in those negotiations.

In a blog post, Wheeler said: “In this item, the Commission takes its thumb off the scales and leaves the scope of such exclusivity to be decided by the parties, as we did in the Sports Blackout Order last year. In so doing, the Commission would take 50-year old rules off our books that have been rendered unnecessary by today’s marketplace.”

Since then, broadcasters have been fighting back hard, flying in from across the country — arranged by the National Association of Broadcasters — to make their case, backed by the Motion Picture Association of America, whose members include some co-owned studio arms of big broadcasters.

The FCC’s Media Bureau was pushing back last week, which appeared to confirm that the chairman still had some convincing to do.

In what one former top FCC official called an unusual step, FCC Media Bureau chief Bill Lake took to the blogosphere last week to argue that the linkage between the exclusivity rules and the compulsory license was overblown. One FCC source said they thought that step signaled the item was in some trouble, saying there was a definite lack of enthusiasm for it.