Exclusive: Mediacom Asks FCC to Limit Retrans Blackouts - Broadcasting & Cable

Exclusive: Mediacom Asks FCC to Limit Retrans Blackouts

Says they should be tied to broadcast reach
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Mediacom is filing a petition with the FCC Tuesday asking it to prevent blackouts during retransmission consent disputes for any station that does not reach 90% of its market over-the-air or via the Web, which Mediacom suggests is most stations in its market and in the country.

What Mediacom wants most is some action out of the FCC on what it calls the "growing crisis" in retransmission consent and in response to various petitions and inquiries on the subject dating back years. Without some action to rein in retrans prices and blackouts, Mediacom says, all but the largest cable operators will have to:

• "Cease carrying broadcast stations that elect retransmission consent.
• "Get out of the video business altogether, which will necessarily require broadband customers to bear a larger share of network costs.
• "Raise the price of retail PayTV service to a level that is unaffordable for tens of millions of consumers."

In a letter to FCC chairman Tom Wheeler, Mediacom CEO Rocco Commisso pulled no punches, saying the FCC has engaged in a pattern of "malign neglect" when it comes to retrans disputes, which adversely affect consumers. Commisso points out that the FCC found authority to regulate broadband — under Title II, which Commisso and Mediacom strongly oppose — yet it can't find the authority to address retrans.

"Last year, you voiced concern because retransmission consent fees had grown 8,600 percent between 2005 and 2012. However, the Commission has done nothing to slow the drain on consumer pocketbooks," he said, according to a copy of the letter. The FCC, said Commisso, “has ignored Congress’ unambiguously expressed intent to ensure that retransmission consent does not lead to blackouts or significantly increased costs to consumers."

“The reality is that millions of Americans cannot receive a quality off-air signal,” Commisso said, and “our new petition does nothing more than ask the FCC to ensure that broadcasters keep their part of the bargain and further the congressional goal of promoting universal availability of free broadcast television.”

"Mediacom proposes that the Commission amend its rules to condition a broadcast television station’s license renewal on the station’s certification that it will not terminate an MVPD’s carriage of the station’s signal upon the expiration of a retransmission consent agreement if the station is not accessible via over-the-air reception or Internet streaming to at least 90 percent of the homes in its local market served by the MVPD," the petition reads, according to a copy obtained by B&C.

"We serve primarily small towns and cities outside of the primary cities within most DMAs," said a Mediacom spokesperson.

"Off-air reception is actually a fairly big problem for the areas we serve. It is not something the Commission has focused on in recent years because 85%-90% of Americans get their broadcast signal through a cable, phone or satellite provider. With the increase in blackouts, consumers may need to turn back to over-the-air reception as an option."

Commisso signaled the FCC needed to be more hands-on in its approach.

"A refusal to become involved in specific disputes combined with an unwillingness to adopt corrective regulations add up to a do-nothing policy," he said in his letter to Wheeler. "I recently asked to meet with you during a blackout imposed by a broadcaster, only to have your staff tell me that your policy is to refrain from meeting with the parties to an ongoing retrans dispute. To my mind, that is a singularly misguided policy because you are refusing to get involved at the very time when consumers most need your help."

Commisso signaled that if the FCC does not act to rein in price increases, it could move companies like his away from offering traditional video product.

"Cable One in their proxy statement — they just went public — said they want to deemphasize video product. We may do the same thing, and other companies like us may do the same thing, which would mean less competition."

Commisso has been sounding the alarm about retrans for over a decade. He pointed out to Wheeler that there were no fewer than four open rulemakings relative to the TV marketplace that have not been acted on.

And while Commisso suggested that record indicated the latest Mediacom petition was a futile effort, the company was going to try again in the interests of getting the FCC to do something.

Commisso says in no other American industry, regulated or unregulated, have prices doubled every two or three years And while he asked Wheeler to act on the various petitions, he also said the FCC did not have to wait to take immediate action. He said his lawyers advised him the FCC could do all the following immediately:

1. "Eliminate network exclusivity.
2. "Require a cost-based justification for discriminatory retrans prices and terms, and mandate rate transparency so that distributors and consumers alike can make more informed decisions.
3. "Acknowledge that the voluminous records in pending retrans-related proceedings demonstrate that changes are needed and that the Commission has the requisite authority. 
4. "Start the required good faith rule review without further delay and commit to propose within 120 days specific rule changes that will make a meaningful difference.
5. "Use your 'bully pulpit' to urge both broadcasters and MVPDs to accept a moratorium on broadcast blackouts and a 10% ceiling on price increases for renewals, pending the outcome of the good faith negotiation rulemaking proceeding."

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