FCC's Lake Downplays Blanket License/Exclusivity Link

Says contracts can protect those rights without FCC backstop

FCC Media Bureau Chief Bill Lake took to the FCC's blog Tuesday (Sept. 22) to argue that it was time to eliminate the syndicated exclusivity and network nonduplications rules.

FCC Chairman Tom Wheeler has already circulated an order doing just that, though it has not yet been voted.

Lake responded to arguments that the rules should not be lifted, if at all, until Congress removes the compulsory license that allows

MPVDs to pay a blanket license for TV station programming rather than have to negotiate it individually (MPVD's have to negotiate for carriage of the TV signal [retrans] but not the underlying syndicated and network programming carried on them).

Broadcasters have been storming the commission from all across the country to make that point.

Lake said that the supposed inextricable link between the exclusivity rules and the compulsory license did not exist and it was time for the FCC to "end its intrusion into this aspect of the commercial marketplace and leave it to TV networks, syndicators, and broadcast stations to implement the exclusive distribution rights that they choose to create."

"Networks, syndicators, and broadcast stations that choose to create exclusive distribution rights may effectively safeguard those rights through privately negotiated affiliation and syndication agreements," he said. "They will continue to have this right in the absence of our exclusivity rules.  It is thus wrong to suggest that, in the absence of the exclusivity rules, the compulsory copyright licenses would allow MVPDs “to abrogate exclusive licenses negotiated by broadcasters in the marketplace.”

The FCC last year eliminated the sports blackout rules that backstopped contractual blackouts of games, saying the government should not be doing that kind of backstopping. Lake suggested the exclusivity rules are similarly unnecessary, particularly given the advent of the must-carry/retrans regime.

"When the network non-duplication and syndicated exclusivity rules for cable were adopted in 1965 and 1972," said Lake, "and when the cable compulsory license was later created, the Communications Act did not require cable operators to get a broadcast station’s consent to carry its signal, either locally or in a distant market in which another broadcaster had obtained exclusive distribution rights for the same programming. Thus, the exclusivity rules were viewed as necessary to prevent a cable operator from importing an out-of-market station carrying duplicative programming. That situation changed dramatically with passage of the 1992 Cable Act. That law for the first time forbade cable operators from retransmitting the signals of a broadcast station without its consent. Today, the Communications Act forbids all MVPDs – cable and satellite alike – from retransmitting the signal of a broadcast station without the broadcaster’s permission."

"Chairman Wheeler appears to be on a singular crusade to eliminate exclusivity rules that serve an important part of the overall localism landscape," National Association of Braoadcasters spokesman Dennis Wharton said. "Neither he nor his Media Bureau Chief Bill Lake have identified any consumer benefit to eliminating the rules. And just last year Congress included broadcast exclusivity protections in the DBS context in satellite TV legislation. We're hopeful other FCC members will reject this government giveaway to Big Cable."