FCC To Issue NPRM On Retrans

Media Bureau chief Lake expected to announce move Wednesday
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The FCC plans to issue a Notice of Proposed Rulemaking on retransmission consent negotiations, according to sources inside and outside the FCC.

FCC Media Bureau Chief Bill Lake is expected to announce the move at a Media Institute luncheon speech in Washington Wednesday (Dec. 8).

Industry souces were suggesting it would likely be a narrowly targeted propisal focused on better defining what constitutes good faith bargaining.

FCC Chairman Julius Genachowski has made it clear he does not think the FCC has sufficient tools to protect consumers from the fallout of retrans impasses, but he has also looked to Congress for help.

FCC Chairman Julius Genachowski last month endorsed a congressional review of retransmission consent rules, suggesting changes could include mandatory mediation and binding arbitration.

Time Warner and others sought a rulemaking to "fix" the retrans process, including instituting arbitration for impasses and standstill agreements to keep TV station signals on in the interim, as well as to get a better handle on what constitutes good faith bargaining.

The FCC has been under some pressure from Capitol Hill to weigh in in the wake of high-profile retrans fights between, among others, Fox and Time Warner, Fox and Cablevision and Cablevision and Disney that had legislators at the local, state, and federal level all calling for the parties to settle their dispute without signal losses to constituents.

Senator John Kerry (D-Mass.), chairman of the Senate Communications Subcommittee, has drafted a bill that would impose fines for bad faith bargaining and allow for standstill agreements and the FCC as mediator, but not arbitrator, of complaints. He held a hearing on retrans last month.

Genachowski said in a letter to Kerry that "under the present system, the FCC has very few tools with which to protect consumers' interests in the retransmission consent process....Current law does not give the agency the tools necessary to prevent service disruptions. Accordingly, I agree that it is time for Congress to revisit the current retransmission law and assess whether changes in the marketplace call for new tools to strike the appropriate balance of private negotiations and consumer protection. Such tools might include, for example, mandatory mediation and binding arbitration, which could prevent the kind of unfortunate stalemate that now exists between Cablevision and Fox," he said.

The FCC is now empowered to enforce good faith bargaining, but the commission has been pushed to better define up front what constitutes bad faith.

Also signed on to that Time Warner Petition seeking a retrans NPRM (which was filed last March, are American Cable Association, Bright House Networks, Cablevision, Charter Communications, DirecTV, DISH, Insight Communications, Mediacom Communications, the Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASCO), Public Knowledge, Suddenlink Communications and Verizon, as well as New America Foundation.

Cable operators and others banded together to form the American Television Alliance to "reform" what they say is a broken retrans system skewed in favor of broadcasters. Those broadcasters have been just as adamant that the system needs not government intervention and is working as it ought to, which is that broadcasters are increasingly seeking and getting cash for their valuable signals.

Cable operators have been framing the issue as one of consumer welfare, pointing to the signal outages that threaten must-have sports and other programming, while broadcasters say such outages are rare and do not justify a government thumb on the scale of what they say is a marketplace negotiation. Pointing to must-carry rules, syndicated exclusivity and other government rules, cable operators say it is hardly a free marketplace.

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