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Retrans Could Be in GOP Crosshairs

When broadcasters dream big of a perfect world, it is usually one where deregulatory Republicans make up the majority in Congress. But if signs out of the Senate and House communications oversight committees are any indication, the next Congress could prove to be something nightmarish.

Sources say the Senate Commerce Committee is considering holding a hearing on the bill sponsored by Republican James DeMint (DS. C.) that would remove media ownership rules—which broadcasters would not mind—but would also scrap the must-carry/retrans regime. That would mirror the House Republican staffer view that those regulations represent government intervention in an otherwise free market.

If Republicans take back the Senate this November, DeMint could replace Jay Rockefeller (D-W.Va.) as chair of the committee. Either way, reg reform will likely be on the agenda in the next Congress.

Broadcasters do not appear too concerned about the DeMint effort, given the lack of cosponsors in the Senate, or for a House version introduced by Rep. Steve Scalise (RS. C.). But House Republicans have already shown they have the stomach for Federal Communications Commission reform, passing a bill out of the full House earlier this year. Then two weeks ago, they signaled virtually all regs should be on the table.

Republican staffers, in a memo in advance of a “future of video” hearing, were making all the right noises about the FCC not stepping into retrans negotiations to force broadcasters to keep providing their signals to cable operators during impasses, or mandating outside arbiters. Broadcasters have been making those arguments to the FCC to counter cable arguments that the FCC does need to step in.

But the Republicans were just getting warmed up, and next took aim at the must-carry regime. In their words, it put a government thumb on the scale through must-buy and basic carriage mandates that require cable operators to offer must-carry stations on the basic tier, and require subscribers to buy a tier with those channels before they can then get the premium networks they want.

In the House hearing that followed, both Republicans and Democrats indicated there was reason to revisit some 20-year-old communications regulations: namely, the retrans/must-carry system that was created by the Cable Act of 1992.

Subcommittee chairman Greg Walden (R-Ore.) said the current communications regs are from a bygone era. He then said there were two options: Start scrapping cable, satellite and broadcast regulations; or expand current regulations to cover new media. And Walden made it clear what his choice was. “I, for one, do not believe we should be expanding video regulations,” he said. Even Broadcasters appeared to add some fuel to the ! re when Hearst TV President David Barrett agreed with one legislator that blackouts were not fair to consumers, no matter how infrequent they were—cable operators have been pushing the FCC to mandate carriage during disputes.

The National Association of Broadcasters— Barrett was speaking for the group—followed up with a clari! cation that what he was saying was that it was not fair to consumers “that some pay TV providers are manufacturing a fake crisis and resisting paying a fair price for our most-watched programming.”

The American Television Alliance, the cable and telco-backed retrans reform coalition, was not letting the comment go without trying to capitalize on it. “We appreciate the broadcasters’ acknowledgement that consumers have been used as pawns,” it said following Barett’s testimony. “We assume the NAB will immediately advise its members to stop using blackouts and blackout threats as a negotiating tactics. This should put an end to blackouts moving forward. “

The FCC under chairman Julius Genachowski has not shown any interest in expanding the FCC’s role in retrans. During high-profile impasses over the past couple of years—Fox vs. Cablevision in 2010, for instance—when the FCC was under pressure from Congress to step in, Genachowski pointed to what he called the commission’s limited authority in the area. The commission did open an inquiry. It proposed providing better definitions of negotiating good faith, and shook the big stick of suspending exclusivity rules during impasses. But the agency has taken no action in more than a year.

That said, Genachowski has also indicated he was OK with Congress stepping in to clarify its view of the process. And he may just get that view.

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