Pay TV May Not Win Many Changes To Retrans NPRM
Cable, DBS and telcos’ desire for changes to a draft retransmission consent rulemaking may not be fulfilled entirely when the notice is voted on at Thursday’s FCC meeting. Agency officials said wholesale or substantive changes to the notice are unlikely. Commissioners hadn’t formally proposed any changes by midday Monday, FCC officials said. Some pay-TV executives had said they would like the forthcoming notice not to tentatively conclude that the agency can’t force carriage or require arbitration when a TV station is blacked out on a subscription-video system. The draft before commissioners reaches the tentative conclusion that the commission can’t (CD Feb 22 p5).
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FCC members are discussing informally with their aides possible changes to the draft from the Media Bureau, agency officials said. They said changes may include expanding part of the rulemaking to specifically seek comment on the conclusion that the commission doesn’t have statutory authority to get TV stations back onto pay-TV systems when a contract impasse leads to a carriage blackout. The changes may not include removing the draft language that the commission can’t act, agency officials said.
Bureau officials have seemed not to want to remove that tentative conclusion, because the FCC has said publicly that it doesn’t have the statutory tools, including under the 1992 Cable Act, to impose carriage, said a media executive. Chairman Julius Genachowski said as much in a letter to Sen. John Kerry, D-Mass. It’s “still possible the FCC might leave open the question of its authority to halt a signal blackout during a retrans dispute,” analyst Paul Gallant of MF Global wrote investors Monday. “We believe there are discussions occurring among the Chairman and Commissioners that could lead the agency to pull back from that firm conclusion and instead seek comment on the issue.” A bureau spokeswoman declined to comment.
Pay-TV companies lobbied last week for a retrans draft that doesn’t foreclose the commission from acting when it finds good faith lacking in carriage talks. The agency “has uncommonly broad authority under Section 325” of the Communications Act to govern TV stations’ exercise of retrans rights, Time Warner Cable executives told Commissioner Robert McDowell and aides to Genachowski and Commissioner Meredith Baker during meetings, said an ex parte filing by the company. “Together with the Commission’s broad public interest authority over broadcast licensees under Section 309 of the Act and the Commission’s ancillary authority under Sections 4(i) and 303(r), this Section 325 mandate empowers the Commission to take whatever remedial actions are necessary to protect consumers from abuses of the retransmission consent process, including by establishing arbitration or other dispute-resolution processes and interim carriage obligations."
The NAB said it’s important to keep the notice “focused on issues that may be within the scope of the Commission’s authority, rather than focusing on well-settled legal issues such as the Commission’s lack of authority to mandate carriage in the absence of broadcasters’ consent or to require negotiating parties involuntarily to submit to arbitration.” It too cited Section 325, but with a different interpretation than Time Warner Cable. The section prevents pay-TV companies from retransmitting a station’s signal without the broadcaster’s permission, the association said. “As the Commission has repeatedly held, the statutory regime governing retransmission consent does not authorize the adoption of rules requiring broadcasters to make their signals available to multichannel video programming distributors,” even “on an interim basis,” NAB said its executives told aides to Commissioner Michael Copps and McDowell during phone calls Wednesday. The NAB and Time Warner Cable filings were posted Friday to docket 10-71.
After the FCC had said it generally can’t intercede in blackouts, with the forthcoming notice “they're finally acknowledging there is a problem and they are going to try to make some changes,” said a spokesman for the American Television Alliance. Members include AT&T, Cablevision, CenturyLink, both DBS companies, Time Warner Cable, Verizon and USTelecom. Even if the item tentatively says the commission can’t mandate carriage or arbitration, “we're thrilled that this is going forward in the first place,” the alliance spokesman said: “It’s a great start” and “the game is on, there is a rulemaking, we have a chance to change these rules.”