FCC Launches Retrans Negotiation Review

Congressionally mandated review will look at ‘totality of circumstances’
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The FCC has launched its review of the definition of good faith retransmission consent negotiations.

The STELAR satellite license reauthorization legislation compelled the commission to open a rulemaking by Sept. 4 looking at the "totality of circumstances" test for how it defines those good faith negotiations.

It is just the beginning of the review, so the FCC has a lot of questions, but no tentative conclusions yet, according to an FCC official.

The FCC's good-faith negotiations oversight is under a two-part test. The first is a list of per se violations, while the second is the "totality of circumstances" test so that meeting all the per se objective standards still leaves room for a finding of bad faith.

Cable operators have plenty of ideas on what other factors should trigger a not in good faith finding, including blackouts, blocking access to online content, bundling of TV station signals with affiliated cable nets, and relying on "outdated" FCC exclusivity rules.

Look for the FCC to tee up those issues and more in the item.

FCC chairman Tom Wheeler has already proposed addressing the exclusivity rule issue, circulating an order Wednesday that would eliminate the network nonduplication and syndicated exclusivity rules, which prevent cable ops and other MVPDs from importing alternative sources of that programming during blackouts.

“The retransmission consent system is broken and the FCC must take action to protect consumers from broadcaster blackouts and broadcaster abuses," said Trent Duffy, spokesman for the American Television Alliance, which represents cable and satellite operators and others pushing for major retrans reform. "Broadcaster blackouts are wreaking havoc for consumers across the country and TV fans are paying more and more for ‘free’ channels.  The FCC must update its rules to prevent consumers from being exploited by the broadcast industry’s outrageous brass-knuckle tactics."

Broadcasters have been arguing that the retrans system is not broken, so does not need fixing, but given that Congress has mandated it, they argue the FCC should focus on pay TV practices.

Robert Kenny, spokesman for TVfreedom.org, which has been waging its own campaign against a retrans overhaul, counters: “A fair and balanced approach regarding future programming disputes requires that the FCC scrutinize pay-TV providers that manufacture TV blackouts that, in effect, disrupt customers’ access to valued broadcast TV content,” he said. “In reality, local TV programming costs amount to just a small fraction of pay-TV subscriber charges and the public interest would be best served if federal regulators were to focus on policies that address the full gamut of monthly fees.”

"We think much of this proceeding will feature the pay TV industry trying to distract the FCC from the most obvious feature of pay TV providers, and that is the consistently deplorable customer service they provide," said National Association of Broadcasters spokesman Dennis Wharton. "If there is a place for the government to step in, it’s to protect consumers from story-after-story of consumer exploitation by pay TV companies.”

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