FCC Leaves Retrans, Exclusivity As-Is

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In a victory for broadcasters, the FCC has decided not to make any changes to its retransmission-consent or exclusivity rules or other regulations related to the carriage of broadcast stations on cable and satellite, including limiting what broadcasters can receive in compensation from cable and others.

But the FCC, and more specifically Chairman Kevin Martin, who issued the report on behalf of the commission--went ever further.

The FCC said that if Congress ever decided to step in to limit how much broadcasters could receive for their signals, it should grant full digital multicast must-carry rights at the same time to help spur the DTV transition.

"Since the Commission’s decision to deny broadcasters the ability to assert dual and multicast must-carry, broadcasters have begun using their retransmission consent negotiations to negotiate carriage of their digital signals, thus furthering the digital transition by increasing the number of households with access to digital signals," the FCC said in its report to Congress released Monday. 

"If broadcasters are limited in their ability to accept in-kind compensation, they should be granted full carriage rights for their digital broadcast signals, including all free over-the-air digital multicast streams," the FCC concluded.

The commission was reviewing the rules at the request of Congress related to that body's reauthorization of the 2004 Satellite Home Viewer Extension and Reauthorization Act (SHVERA).

Various multichannel video programming distributors (MVPDs), including cable, satellite and telco companies, had asked for major changes to retrans consent rules and the elimination of network non-duplication, syndicated exclusivity and sports blackout rules. Those rules limit what broadcast programming a multichannel video provider can carry, depending on whether it duplicates other copyrighted material or programs for which a broadcasters has an exclusive deal.

Since SHVERA deals with the rules of the road for satellite programming carriage, the FCC confined itself to issues of whether the current rules "impeded cable operator's ability to compete with DBS," and concluded there were no revisions needed "at this time."

Cable and satellite commenters argued that the various rules in question adversely impacted their market power vis-a-vis broadcasterrs, including who had the upper hand in retransmission consent negotiations, but the FCC said those questions were outside the scope of its review.

The companies argued that broadcasters use their retrans power to secure carriage of affiliated non-broadcast networks (say ABC Family along with ABC Network), and that the price of retrans deals affects the prices they have to charge subscribers.

Among the remedies they offered were finding such linked deals anti-competitive, mandating some form of arbitration, or forcing broacasters to un-link retrans from carriage of national and regional nets.

The report did concede there might be some untoward linkage that went "beyond what Congress envisioned." That gave one MVPD commenter hope. "We were very happy to see the linkage argumenter recognized," he told B&C, "but not happy at all with respect to multicast must-carry."

Broadcasters argued that they did not have undue market power and that other costs, not retrans payments, were driving up cable prices.

Matt Polka, president of the American Cable Association, which was one of the commenters, say a bright spot in the report's suggestion that it might be appropriate to rethink the 1,000 benchmark definition for the small cable operators that are excluded from the rules--ACA thinks that number should be higher.

ACA has a separate petition to reconsider the rules pending at the FCC, and saw the report as a signal that such proceedings were a more appropriate venue than the SHVERA report.As to the suggestion of a trade off of retrans for multicasting must-carry, he said that reflected Chairman Kevin Martin's desire to encourage digital carriage and was "something that we would explore with our board and our members."

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