Whether or not CBS and Time Warner Cable have resolved their dispute by the time this issue of B&C goes to press, their thorny battle has put an additional spotlight on the retransmission consent issue in Washington, though that light is unlikely in the near term to kindle into regulatory or legislative heat.
One big X factor: The new leadership coming soon to the FCC, which could determine whether the agency deviates from its traditional hands-off approach to retrans deals.
So far, it has held pretty much to form. Republican commissioner Ajit Pai has shown no interest in getting the FCC into the dispute. Acting chairwoman and senior Democrat Mignon Clyburn threatened to take appropriate action if CBS and TWC did not come to a deal soon, but she had not gone beyond that statement at presstime or elaborated on what those actions might be. An FCC rep said the commission was engaged “at the highest levels with the respective parties and working to bring the impasse to an end for consumers and viewers in the affected markets.”
As the former head of the National Cable & Telecommunications Association, FCC chairman nominee Tom Wheeler is used to pushing the cable side of the argument, which is that retrans is not a level marketplace negotiation because of must-carry requirements, basic tier carriage requirements, network non-duplication and syndicated exclusivity protections that cable operators have long argued are a thumb on the scale for broadcasters.
If Wheeler decides to push, he could have an ally in commissioner Jessica Rosenworcel.
“Consumers are caught in the crossfire, collateral damage in the dispute between these two companies,” Rosenworcel said after the FCC’s August public meeting. “Enough: If the parties can’t reach resolution, the FCC should use its ‘good faith’ authority under the law to help bring an end to this disagreement— and prevent long blackouts like this from happening again.”
According to an FCC source, for the commission to use its good faith authority, one of the sides has to file a formal complaint. Neither TWC nor CBS had done so at presstime according to the source. The good faith authority is based on several operative issues—namely, the parties to a retrans negotiation:
1. Cannot refuse to negotiate.
2. Must appoint a negotiating representative with authority to bargain.
3. Must agree to meet at reasonable times and locations and not unduly delay the negotiations.
4. May not offer just a single, unilateral proposal.
5. Must provide considered reasons for rejecting any aspects of the offer.
6. Are prohibited from entering into an agreement with any party conditioned upon denying retransmission consent to another party.
7. Must execute a written retransmission consent agreement setting forth the full agreement.
Under chairman Julius Genachowski, the FCC in March 2011 proposed providing even more guidance on the question of what constitutes good-faith negotiations, which the FCC is empowered to ensure, and to require improved notice to consumers in advance of blackouts. That is the most likely scenario for action out of the FCC. It also proposed eliminating network non-duplication and syndicated exclusivity protections during retrans impasses, but that would be a nuclear option for broadcasters.