WASHINGTON — The Federal Communications Commission’s congressionally mandated review of the “totality of circumstances” definition of good-faith retransmission-consent negotiations has helped rekindle the fiery rhetoric from cable operators and broadcasters in a long-fought war over blackouts and pricing.
Broadcasters have charged cable operators with “manufacturing” disputes over carriage of their stations to get the FCC to step in, while cable operators have said the negotiations process is broken and needs fixing.
Per language in the STELAR satellite-reauthorization bill — itself a way to accommodate some cable critics of the retransmission-consent regime without holding up that must-pass legislation last year — the FCC is gathering string on what should constitute fair, or unfair, negotiations.
NAB CALLS OUT PAY TV FIRMS
In a meeting with FCC Media Bureau chief Bill Lake — the bureau is motor-manning the retransmission review — National Association of Broadcasters executives said that while most retransmission negotiations are “seamless,” there are “some in the pay TV industry” who “appear to have developed a strategy of manufacturing retransmission consent disputes to spur the government to regulate more heavily in this arena.” The trade group did not name names.
The NAB signaled that the FCC should not be surprised if there is an “uptick” in disputes as it considers the good-faith review.
At the meeting, NAB was particularly concerned about the possibility the FCC could scrap the network nonduplication and syndicated exclusivity (syndex) rules, something the agency at least contemplated in opening an inquiry under former FCC chairman Julius Genachowski.
Those rules prevent cable operators from importing distant or out-of-market channels that air syndicated or network programming available on local stations with which cable companies are negotiating retransmission agreements. Cable operators have long considered those rules to be a thumb on the scale in favor of broadcasters.
Broadcasters have argued — and did again in the meeting with Lake — that they are a “counterweight” to the compulsory copyright license that relieves cable companies from needing to negotiate for the underlying content on a station. Retransmission involves a station’s signal, which is treated as separate from the content.
The NAB said flatly that if the FCC made it easier for MSOs to import out-of-market signals, that would lead to more disruptions. (NAB does not use the term blackout.)
In a slide show included in the meeting, the NAB put it plainly, even saying it would need to enlist its audience in the fight: “Broadcasters will be forced to hold out and engage local viewers to stop the importation of distant signals.”
Cable operators have argued that allowing MVPDs the option to import out-of-market signals could lead to lower retransmission fees, and that would benefit consumers.
The NAB had a response to the price argument: “If cable truly believes that eliminating exclusivity will help them lower rates, then the FCC should ensure that any cost savings go to consumers and not cable operators.”
ATVA MEMBERS DELIVER NUMBERS
The American Television Alliance was not about to let the NAB’s arguments go unchallenged.
ATVA members include pay TV provider and others seeking retransmission-rule changes. They were out in force for their own meeting with Lake.
In something of a full-court press, according to the ex parte filing, among those present were representatives of the National Cable & Telecommunications Association, American Cable Association, US Telecom, Dish Network, Time Warner Cable and DirecTV.
They told Lake that a retransmission overhaul was necessary because the rules “are not strong enough to combat the variety of ways that a broadcaster can exercise its leverage to extract higher fees and force blackouts.”
Defining a Fair Shake
Pay TV providers in the American Television Alliance want the FCC to, at the very least, consider making the following actions evidence of bad-faith negotiations:
1. Blocking online access to their content during an impasse.
2. Bundling “cable network, non-broadcast programming, multicast programming, duplicative stations, or a significantly viewed station” in a retransmission negotiation.
3. Withholding a signal during a “top-rated marquee event,” defined as a “television program for which the most recent telecast of that event or comparable programming received a nationwide Live + Same Day U.S Rating of 7.00 or greater on the Persons 2-plus demographic by Nielsen.”
4. Preventing a pay TV provider from importing out-of-market signals during impasses.
5. Allowing a network to negotiate or have approval rights over a retransmission deal.
6. Terms such as broadcasters requiring a set-top for each set in a home or other restrictions on equipment.
7. Demanding per-subscriber payments that include non-video customers or customers getting TV stations off-air.
Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.
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