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FCC Order Would Ax Syndex, Network Non-Duplication Rules

In a big win for cable operators, FCC chairman Tom Wheeler is circulating an order eliminating the network non-duplication and syndicated exclusivity rules, which means those protections from importation of duplicative network and syndicated programming into local TV markets by pay TV providers would have to be struck contractually rather than prohibited by the FCC.

FCC officials speaking not for attribution framed it as removing "unnecessary and outdated rules."

Broadcasters have fought hard to preserve those rules saying they were at the heart of localism, while cable operators have said they were an unnecessary thumb on the scales for broadcasters in program negotiations and prevented them from importing programming during retrans blackouts.

Chairman Wheeler seemed clearly in the cable camp in blogging about the order.

"These rules prevent an MVPD from providing subscribers an out-of-market broadcast station, for example, when a retransmission consent dispute results in a local station being dropped from carriage," he 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.”

The item, being circulated to the other commissioners Wednesday (Aug. 12), dovetails with another item just circulated launching the FCC's review of good faith retrans negotiations.

The FCC had initially raised the spectra of excising the network non-duplication and syndex rules under then chairman Julius Genachowski. The FCC under Wheeler then proposed getting rid of them in a further notice of proposed rulemaking attached to a report and order on retrans back in March 2014. The item being circulated is responsive to that further notice.

The National Association of Broadcasters earlier this year challenged the FCC's silence, in its over-the-top video redefinition item, on how the network non-duplication and syndicated exclusivity rules would apply, which it said is essential to the concept of localism.

It got its answer Wednesday, which is that the chairman doesn't think they should apply to any MVPDs.

That was only one of five Media Bureau items circulated Aug. 12. The others were one on AM radio revitalization; an order allowing contest rules to be placed online rather than have to be delivered orally, usually in unintelligible rapid fire, or visually in small print, on-air; a DBS market modification notice of proposed rulemaking to allow satellite operators to add or delete communities in an effort to address the orphan counties issue.

The chairman outlined all the items in his blog post.