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McDowell: FCC Should "Think Twice" Before Wading into Retrans

FCC Commissioner Robert McDowell said June 25 he thought the commission should "think twice" before stepping
into the retransmission consent fray.

That came in a speech to the Virginia Association of Broadcasters Friday in Virginia Beach, Va.

Broadcasters have argued that the system is working just fine. Cable operators have argued that it favors
broadcasters, who are increasingly asking for more money for their signals, and that those fee increases translate to consumers paying more at the multichannel video pump, as it were.

"In my view, the Commission should think twice before taking any action that may interfere with private contracts regarding the carriage of broadcast programming by multichannel video programming distributors," he said. "Among my concerns is our statutory authority in this area. Section 325 of the Communications Act explicitly directs us to act only to preserve "good faith" in the bargaining process, and does not require any particular outcome. The statute also plainly states that merely asking for more money does not constitute bad faith."

McDowell said it is unclear what the impact of fees on cable prices is. Broadcasters argue that there is no direct correlation, while cable operators say that it obviously does. McDowell cited a study that found that only a third of a consumer's cable bill was driven by programming costs, and only 2% of that by the cost of TV station signals.

He said he would welcome guidance from Congress and in the meantime was meeting with his legal team and
interested parties on the issue. Given that some petitions are asking for a Notice of Proposed Rulemaking,
he said he doubted he had heard the last about the issue.

McDowell also said he was "interested in exploring" possibly transferring some of broadcasters spectrum to
wireless so long as it is "truly voluntary." He said he was eager to hear arguments on both sides, and said the FCC has "a way to go" before anything can happen.

But he pointed out that movement was underway, including the engineering forum at the FCC Friday with
broadcasters to hammer out some of the technical issues with reclaiming spectrum, and repacking and sharing
what remained.

The FCC's timetable is to issue a rulemaking on reclamation within the next three months. He called on his audience to weigh in with "hard facts and data" on the issue, and also said he thought the commission should look seriously at ways under current law for broadcasters to make more spectrum available to wireless broadband by leasing it.