Retrans Could Be in GOP Crosshairs

A major deregulation engine gathers steam on Capitol Hill

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

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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