MVPDs Want FCC to Bar Networks from Striking Retrans Deals for Affiliates
The FCC should forbid broadcast networks from signing retransmission consent deals on behalf of affiliated stations they don’t own, several multichannel video programming distributors said in comments (CD May 30 p12) on changing retrans rules. The American Cable Association, several cable operators and DirecTV were among the MVPD interests making that argument, as the last of the comments were posted Tuesday in docket 10-71. Many broadcasters said the commission shouldn’t find good-faith negotiating rules were broken just because affiliates let networks strike retrans deals.
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Cable industry officials told us the filings show the commission should act to change retrans rules. An NAB spokesman disagreed. “Despite the rhetoric, nothing in the comments suggest a need for the FCC to inject itself in free market negotiations that have resulted in a success rate of 99.9 percent,” he said: “Broadcasters deserve fair compensation for delivering on a daily basis the most popular programming on pay-TV platforms.” The NCTA didn’t file comments on the commission rulemaking, since members have different views on retrans, a spokesman said. Comcast earlier this year bought control of NBCUniversal, owner of the NBC and Telemundo broadcast networks.
"The network/affiliate relationship should remain in large part a private contractual matter,” said the owners of 114 TV stations. “The Commission should not permit MVPDs to use this proceeding to interfere with private negotiations between broadcast television networks and their affiliated stations.” Each of the Big Four networks has different relationships with affiliates, said Barrington Broadcasting, Gannett, Raycom Media, the Washington Post Co.’s TV unit and several other companies. They said arrangements between affiliates and networks involve “complicated rights issues."
The FCC should adopt rules to “prevent all forms of network interference in the exercise of retransmission consent,” three mid-sized cable operators said jointly, citing the 1992 Cable Act. “Both the legislative history of Section 325(b) and contemporaneous statements by broadcasters urging the enactment of that provision make clear that retransmission consent was intended to give individual broadcast licensees, not the national networks, control over the use of a station’s signal and that retransmission consent revenues were not meant to subsidize network programming.” Insight Communications, Mediacom and Suddenlink signed the filing. They said that in materials the NAB gave members of Congress, urging legislation to allow stations to charge for pay-TV carriage, the NAB “expressly stated” retrans is “`not a ‘network TV’ issue” and the networks “will not play a role in negotiations between local stations and local cable systems."
"The FCC received a clear signal” in retrans comments that the rules need changing from groups saying they represent consumers, rural residents and minorities and groups generally seeking deregulation, said a spokesman for the American TV Alliance. Its members include the two major DBS companies, two largest telcos and others seeking retrans rule changes. “We are looking forward to the FCC making meaningful changes that make this a free market and protect consumers,” the spokesman said. “We hope to see that change soon, but getting it right is just as critical."
ACA President Matt Polka also is “hopeful the commission will act,” though it’s hard to say exactly when an order will be voted on, he said. Replies in the proceeding are due June 27.
"Broadcasters are the only ones saying keep things the same,” and the unity of views in other filings shows “there is a demonstrated public interest that the FCC should act upon,” Polka said. “I do expect stations to go dark, certainly the high stakes brinkmanship to occur” later this year, when most retrans deals are up for renewal, Polka said. “I'm very impressed to see the number of consumer groups that have filed separately” seeking changes to retrans, he added. ACA is a member of ATA.
Network-run talks hurt the retrans process, five rural telco groups said jointly. “There is no question that a network’s exercise of an approval right hinders the negotiation process and should be considered a per se violation of the requirement to negotiate in good faith,” said the Independent Telephone and Telecommunications Alliance, NTCA, Western Telecom Alliance and others: “Each station should be required to do its own negotiating."
Dish Network wants the FCC to update its definition of good faith and further clarify the “totality of circumstances test.” DirecTV wants the agency to rule that it’s a per se violation of good faith “for a broadcaster to withhold retransmission consent from a satellite carrier without granting that carrier a temporary waiver permitting the importation of same-network distant signals throughout the market until a carriage agreement has been reached,” the company said. It said deauthorizing carriage during sweeps weeks or just before marquee events and giving a network the right to negotiate a station’s agreements should also be found unreasonable.