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FCC Collects Reply Comments on Retrans Review

Reply comments were coming in Monday, June 27, on the FCC's retransmission consent rule review.

The comments will mostly be restating initial objections, support and suggestions for the FCC's planned tweaking of its rules on broadcast/cable negotiations of payment over station signal carriage, as well as replying to the arguments on the other side.

For its part, the American Television Alliance, which includes major cable operators, satellite operators and others, is telling the FCC how many diverse groups are lineup up behind reform. "Pay-TV providers, consumer groups, elected officials, sports fans and public interest groups across the political spectrum are all calling for reform, while broadcasters sit alone in the dark supporting the broken status quo," said ATVA in characterizing their comments. "With six retrans blackouts already this year, the FCC clearly must eliminate market-distorting rules and protect consumers."

Broadcasters argue that the retrans system is working fine, that blackouts are rare, and that contentious negotiations are a result of broadcasters finally able to seek cash commensurate with their value to cable operators.

The FCC has proposed giving both sides clearer guidance of the definition of good-faith negotiations, which the FCC is empowered to enforce.

FCC Chairman Julius Genachowski has indicated that the commission's authority is limited to that enforcement, and that he is not looking to insert the commission into marketplace negotiations. Cable operators argue the FCC is already inserted into the process via must-carry rules and syndicated exclusivity and network nonduplication rules.

The FCC has proposed doing away with two out of three of those rules (not must carry), giving cable operators an alternative signal to negotiate carriage with if it can't strike a deal with an in-market affiliate. But broadcasters have argued that would wreak havoc with their business model.

In its brief reply comments, Media Access Project wanted to make sure that the issue was not reduced to little more than a spat between those two sides over leverage in financial disputes.

MAP, which argues that the FCC does need to step in, said that the consumer is the intended beneficiary of the system, and that it was not in the consumers' interest either for broadcasters to withhold programming or to use their exclusive license to spectrum to increase the cost of programming to cable ops and the public.

MAP also agrees with the American Cable Association, also a member of the ATVA, that shared services agreements and local marketing agreements have been abused to give stations undue leverage in retrans negotiations.

ACA didn't mince words in its reply comments, saying the FCC needed to step in to prevent collusion and price fixing.

The FCC voted unanimously March 3 to launch the retrans rulemaking. The Notice of Proposed Rulemaking essentially asked for a lot of questions and comments on proposed changes. FCC Chairman Julius Genachowski said at that March 3 meeting that those would require statutory change. It FCC proposals issue from the starting point that the FCC does not have the authority to mandate carriage or arbitration. Broadcasters agree, while cable operators argue that power can be found in its power to enforce good faith bargaining.

Other issues raised in the NPR< include the impact of early termination fees on the ability to switch providers to avoid blackouts, whether networks should be allowed to negotiate retrans for affiliates, and whether a station should be able to negotiate for a station it operates under a joint services agreement.