NAB: GAO Study Supports Keeping Exclusivity Rules

Broadcasters are pulling out all the stops in their effort to prevent the FCC from eliminating the syndicated exclusivity and network non-duplication rules.

In a filing at the FCC Tuesday (Sept. 15), the National Association of Broadcasters reminded the commission of a GAO report from earlier this year concluding that there could be harmful consequences if the FCC removed the rules without also eliminating the compulsory license that excludes cable and satellite operators from having to negotiate for the content within broadcast signals (the retrans negotiation is for the value of the TV signal as a one-stop delivery system for news and entertainment programming).

The NAB pointed to an April GAO report that concluded the exclusivity rules are part of "a broader broadcasting industry legal and regulatory framework, including must-carry, retransmission consent and compulsory copyrights."

The GAO drew no conclusions about consequences brought up by both cable and broadcasters for the report, saying that [t]he effects of eliminating the exclusivity rules are uncertain, because the outcome depends on whether related laws and rules are changed and how industry participants respond."

But one result of eliminating the rules, the GAO said, could be to reduce station investment in content, including local news -- something broadcasters told the GAO could happen. It added that if copyright law was amended in "certain ways" -- one way would be to eliminate the compulsory license -- that would allow the NFL or broadcast networks, for example, to ensure that retrans agreements excluded distant signal importation of certain content -- unless of course the FCC decided in its separate retrans good-faith review that such exclusivity was not in good faith.

The NAB said the GAO report provided "yet more evidence that the Commission should decline to act in a piecemeal fashion by eliminating its program exclusivity rules applicable to cable operators, but should defer to Congress, the only entity capable of addressing the entire framework as a whole."  

While FCC chairman Tom Wheeler has proposed eliminating the rules, circulating an order to that effect last month, one commissioner aide has said a yes vote is not a slam dunk, while another said they were still taking meetings.

"We urge the commission to reject the current proposal to eliminate its exclusivity rules applicable to cable operators while they still have the right under their compulsory license to import programming contained in distant broadcast signals at government-set, below market rates," the NAB said.

Since Congress could likely not take such action on the compulsory license for months, if it succeeded at all, the FCC would likely have to hold off on approving the order until sometime next year. Then again, the chairman might not get the three votes he needs.

The GAO has also been asked by Congress to study the compulsory license and report by June 4, 2016, on that and any related administrative actions, which would arguably include syndex and network non-duplication.

John Eggerton

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.