PK Pushes FCC To Find, Flex Its Retrans Muscle - Broadcasting & Cable

PK Pushes FCC To Find, Flex Its Retrans Muscle

Want commission to regulate rates, mandate broadcasters keep supplying signals to MVPDs during disputes
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Public Knowledge, joined by the New America Foundation and
The Benton Foundation, have written the FCC urging it to weigh in to
the retrans issue with all the power they argue the FCC already has at its
disposal, including possibly regulating the rates broadcasters are increasingly
charging for their TV station signals and mandating they keep supplying their
signals to MVPDs during disputes.

They also reiterate their argument for mandatory arbitration
of disputes when talks break down.

In a letter to FCC Chairman Julius Genachowski, they thank
him for signaling that the FCC will open a rulemaking on retrans, and say while
the FCC's current rules and "actions" have been insufficient to
protect the public, its power to rectify that is not.

They emphasize that the commission has more authority than
it has been exercising, a point cable operators have been making (PK and New
America joined Time Warner Cable, Cablevision, satellite companies and others
in petitioning the FCC to open the rulemaking).

They say the mandate to enforce good faith negotiations and
the responsibility to regulate cable rates combine to give it plenty of
power.

The FCC has been reluctant to step into the middle of
negotiations, despite calls from some MVPD's to take a more active role.

The commission, under some pressure from Congress, has
signaled that it plans to clarify what constitutes good faith negotiations, or
the lack of them. But it could go further in what has been termed a broad
proposal/inquiry.

"If some of our broadcast rules are thought to
interfere with market negotiations," Media Bureau Chief Bill Lake said in
announcing the planned rulemaking proposal last month
,
"we may want to look at those rules."

Cable operators have suggested that syndicated exclusivity, non-duplication and
must-carry, and other rules are thumbs on the scale for broadcasters that
reduce MVPD leverage in the marketplace, though Lake did not elaborate on
just what rules the FCC might look at.

Public Knowledge and company point out in their letter that
the FCC has found only one violation of good faith bargaining in the past
decade, and had never enforced any penalty on such conduct, but rather
mandatory resumption of talks.

"The Commission has not used the regulations it already
has to protect the public when negotiations break down, despite its statutory
obligation to protect consumers," they wrote. "While it is certainly
likely that the Commission would prefer forfeiture authority of greater amounts
to have a more pronounced impact on these negotiations, failure to use the
authority at all sends a debilitating message to parties that might otherwise
choose to comply with their good faith obligation.

"In declining to regulate retransmission consent rates
in 1993, the Commission explained that the record at that time provided no
evidence that retransmission consent negotiations would have a significant
effect on consumer rates for the basic cable service tier. Seventeen years
later, however, the Commission has been presented with ample evidence that
abuse of the retransmission consent regime adversely impacts rates for the
basic service tier," they said. "

FCC Chairman Julius Genachowski, in backing a congressional
review of retrans, said he believed the FCC's powers were limited.

"Under the present system, the FCC has very few tools
with which to protect consumers' interests in the retransmission consent
process," he wrote in an October letter to
to Senate Communications Subcommittee Chairman John Kerry (D-Mass.), who had
proposed legislation to revamp the system (he backed off that effort after the
FCC announced it would propose the rulemaking). "Congress granted the FCC
limited ability to encourage agreement by ensuring that the parties negotiate
in good faith," Genachowski said. "But current law does not give
the agency the tools necessary to prevent service disruptions."

The groups disagree. "The Commission is invested with
"enormous discretion" to regulate broadcasters according to its conception of
the public interest," they told the chairman. "The Commission would
be well-justified to rely on these provisions to conclude that broadcast
signals should be carried on in interim basis while retransmission consent is
being negotiated."

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