The ugly retransmission consent fight between broadcast and cable operators, including broadcast affiliates of NBC and the National Cable & Telecommunications Association (whose largest member is Comcast) is playing out very publicly in the FCC’s good-faith negotiations docket.
That tension has also spotlighted a thorny issue facing FCC chairman Tom Wheeler. He has long professed his commission is not in the business of regulating online content, but has as clearly signaled it’s in the business of regulating access to that content to insure the goods flow freely, so to speak.
Witness the FCC’s recent “inquiry” into zero-rating data plans that exclude some online video from data usage thresholds.
In filings with the FCC, the NCTA has argued that withholding TV station content from the Web during retrans disputes should be considered bad faith negotiations and prohibited by the commission. NCTA says there is no justification for blocking that access to get leverage in a negotiation over unrelated cable carriage of a TV station’s over-the-air signals. In fact, that was the sole focus of its reply comments to the FCC last week.
NCTA is challenging the FCC’s Open Internet rules in court, but it noted in the filing that those rules prevent cable operators from using “similar” blocking of broadcast or non-broadcast Internet content.
The cable trade group says that the FCC has sufficient authority to rule that online blocking as a negotiating tactic is out of bounds.
The National Association of Broadcasters argues that such a rule would be tantamount to mandating that broadcasters tie the rights of their broadcast and online content, which bundling in other circumstances—retrans deals linking cable and broadcast programming—cable operators oppose. “What [multichannel video programming distributors] seek is, essentially, a government-mandated tying rule,” said the NAB, “demanding that broadcasters authorize the distribution of their programming on all platforms whenever they consent to retransmission of their signals.”
But the NCTA says broadcasters are missing the point. “NCTA is not suggesting that broadcasters must distribute any of their content online, much less that they distribute it for free,” the group told the FCC. “But where a broadcaster is already making its content available online to the general public, with or without charge, including to the Internet customers of a cable operator (in which case the broadcaster obviously has already obtained the rights to do so), it is a violation of good faith for the broadcaster to block those customers’ access to such content.”
MPAA Adds Its Weight
Weighing in on the side of broadcasters and against NCTA is the Motion Picture Association of America, complicating the picture since one of its members is Universal, which, like NBC, is owned by Comcast.
MPAA put a spotlight on the internecine divide itself, pointing out that not only Universal but Disney, Paramount, Sony, Twentieth Century Fox and Warner Bros. are all also members of NCTA. MPAA, for one, definitely sees adding online to good faith as getting into content regs, calling it a “direct regulation of content providers” in violation of the First Amendment.
The FCC is under no obligation to change or expand the elements of its “totality of circumstances” test for retrans negotiations, which are things that might be out of bounds, or to add to its list of de facto violations.
But after Congress said it had to at least look into doing so, the commission raised a number of issues it said it wanted input on, including blocking online access. Retrans players are making sure the FCC gets that input.
The battle lines are clear in the ongoing retrans fight, with broadcasters and cable operators lining up to give the FCC an earful:
Sinclair Broadcasting: “The FCC should shun new constraints on broadcasters in retransmission negotiations that have been tailored by their MVPD advocates to depress retransmission fees for broadcasters and that risks driving high-quality programming off of broadcast platforms and onto pay-TV platforms.
Media General: “The hyperbolic cries of crisis and unsupported claims of consumer protection from the MVPD industry are nothing but pretext for government intervention, artificially reduced retransmission consent fees and a boost to their bottom line.”
Cablevision: “Broadcasters are using their government-granted leverage to force consumers to pay for broadcast-affiliated programming that they do not want, and are subjecting consumers to more and more frequent blackouts and ever-increasing fees to cover the cost of retransmission consent.“
Time Warner Cable: “Commission action is urgently needed to curb broadcasters’ brinkmanship tactics that result in blackouts and unreasonably drive up retransmission fees for MVPDs and their customers.”