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Affiliates to FCC: Leave Good Faith Test Alone - Broadcasting & Cable

Affiliates to FCC: Leave Good Faith Test Alone

Say retrans is healthy, vibrant and functioning
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The Big Four broadcast network affiliates are in agreement with the National Association of Broadcasters that the FCC should take a light touch, actually a hands-off approach, in its review of what constitutes good faith retransmission consent negotiations.

That came in comments to the FCC on whether it should add any new elements to its "totality of circumstances" test for good faith bargaining.

The FCC was required by Congress to open the inquiry, but broadcasters say that does not compel it to make any changes if it concludes, as broadcasters argue, that the "vibrant and functioning" regime is working as it ought to.

Pay-TV operators have been pushing for major changes, saying broadcasters have undue leverage and are using it to extract usurious fees under threat of blackouts. But what they see as a flawed and broken system broadcasters label a healthy contentiousness that indicates a competitive market, not a broken one.

They say that 99% of the time a deal is done without even the threat of what MVPDs call a blackout and the affiliates call a "disruption" or "interruption" of service.

In seeking that hands-off approach, the affiliate associations said the FCC should not dictate economic terms of retrans deals in the "guise" of measuring good faith.

"Understandably, MVPDs would prefer to pay less for the privilege of retransmitting and reselling local broadcast station signals—and, by the same token, local broadcasters would prefer to pay less for the marquee programming contained in their signals and less for the cost of talent, labor, and equipment necessary to broadcast that programming," they told the commission. "But Congress has determined, and rightly so, that all of those costs are best regulated by market forces—not by the Commission."

Affiliates of ABC, CBS, Fox and NBC ticked off the reasons why some changes posed by the FCC and pushed by cable ops and others were out of bounds.

The proposal that retrans agreements not be allowed to expire on the eve of marquee events? "Impossible to administer," say the affils.

Getting rid of syndicated exclusivity and network nonduplication rules? Contractual restrictions on importing out-of-market programming "must be respected."

Compelling online carriage of TV station signals during impasses? The FCC's authority does not trump copyright law.

Bottom line, say the affiliates to the FCC about proposals to make any changes to the totality of circumstances test:  Change nothing.

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