Retrans NPRM Questions Pay-TV, Broadcast Practices; Some See as Balanced
The draft FCC rulemaking notice on retransmission consent asks questions about the practices of both pay-TV providers and broadcasters, the sides sparring over whether rules need to be updated, said commission and industry officials. The questions deal with subjects such as pay-TV providers’ notices to subscribers about possible carriage blackouts, and broadcast practices in negotiating retrans deals, FCC officials said. Some broadcast officials said they would prefer the item not ask about their industry’s retrans practices, or even to have a notice at all, and several pay-TV executives said they would prefer that the draft (CD Feb 14 p6) not say the commission doesn’t have authority to order interim carriage or arbitration in cases in which good faith is lacking.
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But parties on both sides said they probably can live with the rulemaking, from what they've heard of the draft. In general it seems to balance the questions that broadcasters and subscription-video providers have raised at the commission about the other side’s practices, said broadcast and cable lawyers and executives. “It is my understanding that they do appear to be taking each side’s proposed areas of inquiry very seriously,” said lawyer Barbara Esbin of Cinnamon Mueller, which represents small cable operators.
Small cable operators and new entrants to the pay-TV market are asked about in the draft, FCC officials said. The Media Bureau rulemaking notice, which Chairman Julius Genachowski has tentatively scheduled to be voted on at the commission’s March 3 meeting, asks whether those players are forced by broadcasters to accept deals on less favorable terms than larger subscription-video providers if they want to carry the terrestrial programming, commission officials said. They said the draft also asks whether all pay-TV providers -- including DBS and telco TV, not just cable as now -- must notify video subscribers at least 30 days before channel lineup changes. The rulemaking also asks how to balance the need of subscribers to know about a possible blackout with avoiding the risk of confusing or falsely alarming them, commission officials said.
The draft asks what could constitute an unreasonable delay in starting talks for a new contract, FCC officials said. That’s an issue that could affect either side in retrans deals. The draft also asks about broadcast industry practices’ affect on retrans, commission officials said. The practices include the use of shared-sales, local marketing and other agreements involving two or more TV stations in a market to negotiate retrans contracts, they said. The practices also include broadcast networks’ negotiating deals on behalf of affiliates, the FCC officials said. A bureau spokeswoman declined to comment.
"The draft is definitely favoring the broadcasters” in that it is said to conclude, as Genachowski has publicly stated, that the commission lacks authority to order carriage when talks have lacked good faith, a cable industry executive said. “All of the other feedback we received suggests the commission is willing to consider a broad range of solutions and ideas to reforming the retransmission consent regime,” the executive added. So “in that sense, I do think” that the rulemaking “will be balanced,” he said. Another cable industry official agreed.
The item asks about matters that pay-TV companies and stations alike would rather not be further regulated, a broadcast lawyer said. Cable would prefer not to have “enhanced notification” of subscribers, and “broadcasters would certainly prefer not to open questions about in-market arrangements” or about rules barring the duplication in a market of programming from a network, the lawyer said. The real question, the attorney added, is “not that there is a tit for tat in the item, but whether it asks reasonable questions which relate to something the FCC could or would contemplate doing.”