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Retrans Review Revs Up

WASHINGTON — Federal Communications Commission chairman Tom Wheeler has launched the congressionally mandated review of the retransmission- consent regime, specifically looking at how to define good-faith negotiations between cable operators and broadcasters.

There is already a list of per se violations, but the FCC also is allowed to look at the “totality of circumstances” for things beyond those objective criteria that could translate to not negotiating in good faith. Issues under consideration include blackouts, program pricing (bundling) and access to TV-station programming online.

ANOTHER WAY

Arguably, Wheeler has tipped his hand about the need to take action to reduce retransmission impasses. While the good-faith review will take months, the chairman circulated an order that could eliminate the broadcast exclusivity rules.

The main groups fighting the retransmission PR wars have been the American Television Association for the cable side and TVfreedom in the broadcasters’ corner.

The rhetoric got even more heated with the FCC’s approaching Sept. 4 deadline for launching the review, but the basic issue remains the same: Broadcasters say they are just making up for lost time in finally negotiating closer to full value for their TV signals, while cable operators say broadcasters are using their government-aided must-carry and retransmission-consent leverage to raise prices that are ultimately passed on to consumers.

In a letter to the FCC, ATVA member Cablevision Systems called for big changes. For one, the cable operator asked the FCC to free subscribers from the must-buy tier requirement in systems with effective competition.

“The commission should ask how it could plausibly serve the public interest to require Spanish-language households to purchase English-language broadcast channels as a condition of purchasing Spanish-language programming,” Cablevision said.

In addition to prohibiting tier-placement requirements, Cablevision wants the FCC to prohibit retransmission negotiations that tie stations to affiliated cable programming networks. And it wants the agency to enforce those on existing contracts, finding any such current terms to be per se violations of good faith.

The National Association of Broadcasters told the commission that retransmission-consent fees are not even close to a leading factor in the cost of consumer bills, let alone programming costs.

It said if the FCC wants to look at the “totality of circumstances” related to retrans negotiations, it should focus on pay TV problems, which it said included, but were not limited to, “dismal customer service, overcharging consumers, sky-high equipment fees and questionable billing practices.” Billing practices in other realms have also been an issue on Wheeler’s radar.

Mediacom Communications senior vice president Joseph Young — Mediacom is also a member of ATVA — borrowed from a broadcast-TV staple to stick it to the other side in his own letter to the commission.

“In an episode of the original Star Trek TV series, Mr. Spock remarked that ‘nowhere am I so desperately needed as among a shipload of illogical humans,’ ” Young wrote. “Nowhere, that is, except in a room full of broadcast-industry lobbyists relying on assorted logical fallacies to defend the status quo for retransmission consent.”

TVfreedom spokesman Robert Kenny provided Multichannel News with the broadcaster case. “A fair and balanced approach regarding future programming disputes requires that the FCC scrutinize pay TV providers that manufacture TV blackouts that, in effect, disrupt customers’ access to valued broadcast TV content,” Kenny said.

GETTING LOBBYING LICKS IN

Cable operators and broadcasters have beaten a path to the FCC’s door recently to put in their two cents before the FCC adds its voice to the debate — not that it is under a congressional mandate to take any specific action, only to review its definition of good faith.

The review was added to the STELAR bill when it became clear that the legislation would not pass with a major retransmission remake baked into it.

But major retrans reform could be in the offing at the FCC if the chairman concludes it would serve consumer interests, particularly if he decides to use the review to address issues like over-the-top access, cable pricing or channel bundling, all of which Wheeler is on the record as having concerns about.