Retrans Revamp Hits Hard

Broadcasters hit back, saying one-sided effort fails to address true market failures
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The Senate Commerce Committee isn’t giving broadcasters the month of August off.

There’s a chance the committee floated the “Local Choice” retrans remake proposal as a compromise to prevent blackouts while “empowering” TV stations and consumers. But it landed like a lead balloon on broadcasters, who see it as being aimed at the wrong target.

The plan would be a radical remake of the relationship among broadcasters, multichannel video programming distributors and viewers (see below).

Sen. Jay Rockefeller (D-W.Va.), who heads the committee, is retiring at the end of the year, and has signaled he wants to use the reauthorization of the Satellite Television Extension and Localism Act (STELA) to adopt video reforms.

The Local Choice plan aims to end retrans blackouts and help consumers control cable bill prices, but it only provides price transparency and choice over TV stations, not the cable channels that make up the majority of cable bills.

Cable operators represented by the American Television Alliance hailed the proposal as “a solid bipartisan compromise and a real win for consumers,” saying it would give consumers “great choice” and transparency and would end retrans blackouts.

But TVFreedom.org, whose members include the network affiliate associations and the National Association of Broadcasters, will be pushing back hard. “This last minute proposal by Senators Rockefeller and [John] Thune [(R-S.D.)] fails to address cable and satellite TV’s deceptive billing practices, excessive equipment rental fees and surprise charges fueled by market failures,” TVFreedom.org spokesman Robert Kenny said last week.

Kenny added that if the proposal were about real reform, it would have been billed as a video choice plan that applied price transparency and choice to all the platforms delivering content to consumers, including cable, satellite and the Internet.

The committee will take up the proposal in September when it is scheduled to begin work on its version of a new satellite bill, so broadcasters will need to make their voices heard before then.

FCC SHOWS FOX SOME ’LIKE’

The FCC has not been on broadcasters’ holiday gift list for a while now, with the industry concerned about how the incentive auction is being handled and how TV station sales are being vetted and approved, or not approved, absent sharing arrangement unwinding.

But last week, the Media Bureau approved the renewal of Fox’s WWOR Secaucus, a station whose license had been in dispute going back to at least 2007. A number of complaints led to the long delay, ranging from WWOR being a New York station in New Jersey clothing, to it being run by owners whose phone hacking scandal in Britain a couple of years back meant they were not qualified to be licensees, to the station filing the wrong info.

The bureau ultimately said the Fox station met its obligation by “airing programming that is responsive to the issues of concern to its community, in this case Northern New Jersey.”

As for filing inaccurate info: “We find that any confusion created by Fox’s filing was unintentional, and harmless error.”

Fox did not get all it wanted. The company has been for years trying to convert its temporary waiver to own WWOR and WNYW and the New York Post to a permanent one. But the FCC did extend yet another temporary waiver until after its next quadrennial review, which means at least another couple of years.

One broadcast attorney admitted surprise at the FCC’s move, but added that it may have been done to clear the decks. FCC chairman Tom Wheeler is trying to move through an ever-widening clog of items that have been in the pipeline since before he came aboard.

‘CHOICE’ CUTS

Under the Senate Commerce Committee-floated plan, cable operators would become collection agents for viewer payments to TV broadcasters. Here’s how the process would work:

A TV station would price its channel to consumers— which could be adjusted annually. It would have to be the same for all multichannel video programming distributor subscribers in a market. MVPDs could not mark up the price, so cable ops would make no money from the channels, though they would be responsible for collecting the fee from subs and turning it over to broadcasters.

MVPDs can decide which, if any, local TV station signals they want to pay for and receive.

MVPDs cannot require their subscribers to purchase non-broadcast channels in order to get a broadcast channel.

TV stations can still elect must-carry, which means an MVPD must offer them on the basic tier—though broadcasters then do not get paid for the signal.

The Senate Commerce Committee isn’t giving broadcasters the month of August off.

There’s a chance the committee floated the “Local Choice” retrans remake proposal as a compromise to prevent blackouts while “empowering” TV stations and consumers. But it landed like a lead balloon on broadcasters, who see it as being aimed at the wrong target.

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