Studios to FCC: Hands Off Syndex/Nondupe...For Now

Say it would remove needed counterweight to compulsory licenses
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The Motion Picture Association of America has asked the FCC not eliminate the syndicated exclusivity and network nonduplication rules until and unless Congress eliminates the compulsory licenses that allow cable operators to carry distant and local TV station content without negotiating separately with content providers--like those studios.

"]T]e FCC should not go forward with its proposal to eliminate the rules," MPAA said Friday.

According to a letter to the chairman and commissioners dated Sept. 10, MPAA said that rather than taking the government's finger off the scale of negotiations, as FCC Chairman Tom wheeler suggested eliminating the rules would do, it would instead "remove an essential counterbalance to the government-created compulsory copyright licenses, jeopardizing the ability of program suppliers to provide viewers with robust and diverse programming."

Broadcasters, some of whom are co-owned with those MPAA studio members, have been arguing the same thing.

MPAA also said that excising the rules would counter Congress' assessment in the STELAR satellite bill that the FCC needed to gather additional info before taking action on the exclusivity rules.

The FCC commissioners are being asked by the chairman to vote on the measure, but Congress would be unlikely to tackle the compulsory license without months of debate, so effectively MPAA is asking the FCC to stand down for now, as have broadcasters.

"Granting local broadcast stations geographic exclusivity generates the advertising revenue that helps fund the production and acquisition of innovative programming. Absent assurances that duplicative programming won’t fracture its audience—and thus its advertising revenues—a local broadcast station is far less likely to invest in high-value content or take a risk on anything other than mass appeal programming," said MPAA.

The exclusivity rules essentially backstop contractual exclusivity, which is why Wheeler suggested they were a government thumb on the scale, similar to the sports blackout rules-which backstopped contractual sports broadcast exclusivity--that the FCC jettisoned unanimously last year.

But MPAA suggested there is a difference.

"Ordinarily, program suppliers could efficiently provide assurances about duplicative programming purely through enforcement of contractually negotiated copyright licenses in the marketplace.," it said. "By granting cable and satellite providers a statutory copyright license, however, the government restricts the ability of content providers to manage distribution through private contract. The network non-duplication and syndicated exclusivity rules mitigate some of that market impact by returning to broadcast programming suppliers some of the discretion over distribution of their content that the statutory licenses take away."

MPAA also says getting rid of the rules would be premature since the GAO has been asked by Congress to study the compulsory license and report by June 4, 2016 on that and any related administrative actions, which it says the FCC proposal would fall under.

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