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FCC Finally Tackling Retransmission Regime

WASHINGTON — The Federal Communications Commission has launched its review of the definition of “good faith” bargaining in retransmission-consent negotiations, and this time it looks like the effort could result in some changes.

The last retransmission-consent review docket, under chairman Tom Wheeler’s predecessor, Julius Genachowski, had languished for years. Wheeler lit a fire under it in March with an order to eliminate broadcast-exclusivity rules, one of the tentative proposals in that earlier docket.

Wheeler’s March order was teamed with an order to prohibit joint retransmissionconsent negotiations, in which stations team up and negotiate as one with a local cable operator.

At press time the FCC had not voted on that exclusivity rules order, circulated last month by the chairman, but it was expected to have enough votes to pass.

While this time around the FCC was under a congressional mandate — included in the STELAR satellite legislation — to review retransmission consent, that mandate appears to dovetail with Wheeler’s tough talk about protecting viewers and could be a venue for him to get to such related issues as blackouts, standstills and access to online content.

As far back as his confirmation hearing in 2013, Wheeler was signaling that he thought consumers were being held hostage to business disputes and pledged the FCC would take up the retrans issue.

The FCC was directed to look at its totality of circumstances test as one of two elements in its good-faith bargaining test, the other being nine per se violations. But the notice also seeks comment as to whether the agency should expand that list.

The National Association of Broadcasters said last week it thought the FCC was going beyond what Congress had intended. But commenters on the cable side had already been suggesting additional per se violations and the FCC appeared ready to listen.

In fact, the notice of proposed rulemaking, which asks a lot of questions but comes to no tentative conclusions, reads like a laundry list of issues offered up by the American Television Alliance (ATVA), the cable and satellite industry’s primary voice in calling for major retrans reforms.

That was not lost on the ATVA. “Today’s action by the FCC is a step forward for all of those consumers and the millions more who have been victimized by broadcaster blackouts for far too long,” the group said in a statement.

Those questions include whether the bad-faith definition should include blackouts or third-party negotiators (networks negotiating for their affiliates, for example) or blocking online access to TV programming during impasses or bundling TV stations with affiliated networks, all things cable and satellite ops have suggested should be violations.

If those all sound like bad faith on the part of broadcasters, that is because, as the FCC points out, “most of the alleged bad-faith practices discussed in this NPRM are attributed by commenting parties to broadcasters.”

The NPRM does not conclude that restricting online access is a bad-faith practice, but its text raises questions such as this: “Should causing consumers harm to enhance negotiating leverage generally be a factor that we should consider as evidence of bad faith under the totality of the circumstances test?”

That certainly sounds like the “consumers held hostage to disputes” scenario the chairman clearly does not like.

Commenters will get 90 days to weigh in after the item is published in the Federal Register, which means the FCC likely won’t take any action until at least early 2016.