E&C Majority Staffers: Time to Revisit Must-Carry/Retrans Regs

Majority memo tees up issues for June 27 future of video hearing

By John Eggerton -- Broadcasting & Cable, 6/26/2012 8:40:15 AM

Republican staffers on the House Energy & Commerce Committee's Communications Subcommittee signaled in their memo on the June 27 Future of Video hearing that that future should be a deregulatory one, including that if Congress rethinks any regs, they should be must-carry/retrans and program access rules.

"The Communications Act is woefully out of step with the state of competition and technology in video distribution and programming," they write, according to a copy of the memo teeing up issues that could be addressed at the hearing.

That means, they argue, that retransmission consent deals between MVPDs and broadcasters and program carriage deals between MVPDs and programmers "are best left arranged by the respective parties and their viewers, free from regulatory intervention."

That would be good news for broadcasters not looking for the government to step in and mandate carriage or arbitration during impasses. "Both sides should be able to withhold valuable assets," the staffers say, otherwise no "true negotiation can take place."

The alternative, they say, is the "risky" proposition of asking regulators to weigh the relative value of programming and carriage.

But before broadcasters start breaking out the champagne, the committee suggests the government's thumb is already on the scale to the "detriment" of pay TV providers through regulations like must-carry with its basic tier and must-buy requirements that require cable operators to put must-carry stations on the most widely viewed tier and prevents subscribers from buying premium channels without also having to buy that basic tier, which "limit shelf space that might otherwise be available for non-broadcast programming." Broadcasters have no interest in either the FCC or Congress deep-sixing those requirements given the increasing revenue of cash for carriage.

Then there are the program access conditions that restrict the rates, terms and conditions on vertically integrated cable operators and programmers. The staffers say that if any provisions should be revisited, it is these retrans- and carriage-related regulations given the changes in the competitive marketplace and technology since they were adopted.

They also suggest that network nonduplication and syndicated exclusivity rules limit the ability of cable and satellite operators to negotiate free of government, but add that those should not be revisited or revamped unless it is done it concert with reviewing the compulsory copyright license, which, in turn, limits the ability of programmers to negotiate individually for programming rights. Most broadcasters are not looking for network nondupe and syndex not go away, arguing those underpin their business models.

Also on the list of possible topics for discussion is satellite TV reauthorization, the networks' legal battle with Dish over the Hopper recording and ad skipping service and the FCC's request for comment on the definition of MVPD and whether over-the-top providers should be included. "[T]his proceeding may have far-reaching consequences for the future of video," they said. The staffers did not weigh in on way or the other on either of those, simply framing the issues.

The hearing is the second in a series of hearings on the future of audio, video and technology that Subcommittee Chairman Greg Walden has planned.