Broadcasters, Cable Spar over Retrans

Representatives of the broadcast and cable industries have filed comments with the FCC in connection with the commission’s latest foray into retransmission consent rules.

The FCC is proposing to update retransmission consent rules in response to recent skirmishes between broadcasters and cable companies over fees broadcasters charge to carry their content over cable systems. Cablevision, New York City’s regional cable operator, in particular, battled with Fox over carrying network programming in late 2010. The cable company, in comments filed last week, said that the commission should update the “good faith standard” in retransmission negotiations, in light of the changing pay TV marketplace.

“With the increase of competition among MVPDs, the economic conditions on which the retransmission consent rules were premised have changed,” Cablevision told the FCC. “Indeed, it is now the subscribers of MVPDs who need protection to ensure that local broadcasters continue to offer their programming to MVPDs under reasonable rates and conditions.”

Cablevision asked the commission to require broadcasters to charge “non-discriminatory” and “transparent” rates to cable operators without requiring them to carry additional ancillary cable networks. This would result in greater certainty in negotiations, less disruption to programming and, additionally, is within the commission’s authority.

“By updating the rules to reflect current market conditions and to re-establish the balance in retransmission consent negotiations that Congress intended, Cablevision’s proposal would result in speedier, reasonable retransmission consent agreements that appropriately reflect the value of a broadcaster in a local market and ensure that consumers have an opportunity to share the benefits of the more favorable retransmission consent deals that will flow from the proposed regulatory changes,” Cablevision said.

Broadcasters, which have become more aggressive in retrans negotiations in recent years, urged the commission to take a hands off approach, advocating a market-based scenario. In comments filed with the FCC, the NAB noted that the commission has limited authority in establishing retrans negotiation rules and that consumer disruptions over retrans battles have only resulted in only one hundredth of one percent (0.01) of annual television viewing hours since 2006.

“In recognition of this limited authority and the competitive nature of the retransmission consent marketplace, the Commission should not make significant changes to its current rules governing retransmission consent, including its good faith negotiation standard,” NAB said.

The few changes the NAB does advocate include:

  • •Expanding the FCC’s notice requirements to non-cable MVPDs to help consumers make “educated decisions” if they are impacted by a breakdown in negotiations;
  • •Ensure that consumers don’t get penalized by early termination fees if they choose to switch to another carrier during a retrans impasse, and
  • •Allow broadcasters access to information about ownership and operations of MPVDs to facilitate retrans elections and communications.

NAB also criticized several proposed changes to the rules, including the prohibition of joint negotiations by broadcasters from different owners, noting that there is no legal or public policy basis to the proposed change and that “no credible evidence has been provided to suggest that joint negotiations by broadcasters result in delays or other complications warranting intervention in the retransmission consent marketplace.” It also said that “government-mandated” negotiations are beyond the scope of the FCC’s authority, and urged the commission to retain network nonduplication and syndicated program exclusivity rules for retrans consent.