Skip to main content

Free State Panelists Free to Hammer Retrans

Cable and satellite operators, an activist, an
academic, and a former FCC official took turns taking aim at the must-carry
retransmission consent regime Thursday at a Free State Foundation forum in Washington -- there was no
broadcaster on the panel.

general thrust of the attacks was that the rules were monopoly based rules
tailored to a market that doesn't exist.

Cable & Telecommunications Association President Michael Powell freely
admitted that the cable business in 1992, when the Cable Act and its rate regs
and retrans regime was adopted, was a monopoly with 98% of the MVPD market. But
that was before DBS and the Internet and phone video, he pointed out. Powell
said, as he has before, that the Act was also meant to protect the broadcast
model as an inherent public trust and social compact, a judgment that was made
when over-the-air viewership was close to 70%. Now that audience is more like
14% over-the-air only, he pointed out. He said there can be a debate on whether
to continue to protect broadcasters, but that what isn't debatable is that the
rules should continue to be justified on the basis of a monopoly market.

Media Bureau Chief Donna Gregg said that retrans/must-carry was adopted with
teh best of intentions, but that it had not proved to be consumer-friendly. She
said the rules have caused viewer "outrage" over blackouts. She also
took aim at network nonduplication and syndicated exclusivity rules as a
"questionable set of regulations." She said it led to
"deprivation of channels" for consumers. 

Sohn, president of Public Knowledge was on the same page. "Consumers are
held hostage by retrans fights and blackouts, she said. She also said that
while getting rid of the regs was preferable, alternatively the FCC should keep
stations on during retrans disputes and mandate outside arbitration, the latter
which she said the FCC has the authority to do, although the commission has
said it doesn't. Sohn thinks the FCC is reading that authority too narrowly.
She called syndicated exclusivity, distant-signal protections and sports
blackout rules decades-old regulatory nonsense that kept viewers from watching
the TV stations they want to watch.

suggested there was some talk in Congress about introducing legislation clarifying
that the FCC has the authority to mandate arbitration.

Warner Cable SVP Steven Teplitz called retrans/must carry the "poster
child" for "what happens when you get it wrong" and the harm
regulation can cause. He said government had inserted itself between MVPDs and
broadcasters that have caused blackouts and rate increases, both ot which he
said harm

Fuller, VP at DirecTV, said that back in 1992 retrans/must carry might have
made sense when the negotiation was between two monopolies, broadcasting and
cable, but now broadcasting, still a monopoly protected by the government, gets
to play a range of MVDPs against each other, leading to higher prices. She said
it was one of the few times when more competition leads to higher prices.

person with the most power over the issue was the most circumspect. Bill Lake, current Media Bureau
chief, called it a "very odd regime" of regulated negotiations. But,
he said, "that's the regime we have and we try to thread that needle. And
while the FCC has taken no action on a proposed rulemaking now going on a
couple of years old, he insisted the proceeding was not dead. "We
continue to look at it  and to watch events in the marketplace. " But
he also repeated that the FCC has concluded it does not have the authority for
some of the remedies, like mandating arbitration.

panelists had different ideas of what vehicles could be used to update the regs
they said were outdated. Most pointed to the Satellite Television Extension and
Localism Act (STELA) as a way to address the issue of giving TV viewers station
options, though Sohn said she did not expect the reauthorization to be
"larded" with extras.

reform was another option; with the suggestion by Commissioner Ajit Pai and
others that Congress could extend the forbearance authority it has to lift
outdated telecom regs to the video space.

said outside forces such as a decision in the Aereo TV case or Cablevision's
challenge of bundled programming could also be one of those vehicles. Powell
said that with everything else on its plate, he did not see a major rewrite of
communications law this year.