DBS Market Modification Rules Debated
FCC efforts to ensure satellite companies and broadcast stations negotiate in good faith aren't a government requirement that such stations have no leverage in negotiating carriage terms and conditions with satellite carriers, the NAB said of proposed rules for "orphan counties" that sit in one state but are considered part of TV designated market areas primarily based in a different state. The way satellite has operated for years “has proven noncontroversial,” but broadcasters are pushing “a far more intrusive regime,” DirecTV said in reply comments on the FCC review of Section 102 of the Satellite Television Extension and Localism Act Reauthorization (STELAR) Act of 2014. The FCC is required to approve new DBS market modification rules by September. While changing the market modification rule has broad support, how to go about doing that remains a sticking point (see 1505140054).
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Broadcasters could readily get market modifications, and DirecTV would be happy to carry their signals “but only where its spot beams permit,” the company said in its response posted Friday in docket 15-71. What broadcasters want has several major flaws, DirecTV said. If the spot beam on which it carries a station's signal doesn't extend to the area where a station wants coverage, “DIRECT TV has no good options available to it." Even using another spot beam, in the unlikely event that beam even had room for the station's programming, "would entail patently unacceptable tradeoffs," DirecTV said. And the analysis DirecTV would have to provide to broadcasters about service coverage "involves some of DIRECTV’s most highly confidential information about its satellite performance, levels of intra-system interference, and service assumptions," the company said. DirecTV did concede that using counties as the basis of market modifications, instead of ZIP codes, as it itself earlier had proposed, is acceptable.
The FCC should shoot down DBS proposals that would put particularly big hurdles before broadcasters wanting market changes, such as forcing such broadcasters to provider more information for market modifications than they must provide when dealing with cable companies, Virginia Broadcasting Corp. said in its response. “DISH Network … proposed in its comments that DBS operators be permitted to self-certify that carriage of a station is technically or economically infeasible, without providing supporting information,” the licensee of WVIR-TV Charlottesville said. “That approach is unreasonable and should be rejected. Otherwise, broadcasters will be completely at the mercy of DBS operators who oppose market modifications, largely defeating the purpose of the STELAR statute, if not rendering it a nullity.” The idea that broadcasters looking to add a market show evidence of viewer demand also is "far beyond what is required in the cable context and should not be adopted," Virginia Broadcasting said.
Satellite companies "cannot lawfully obtain a 'free pass' to carry retransmission consent stations without negotiating the prices, terms and conditions of such consent," the NAB said in response to previous Dish Network comments about stations that go for retransmission consent after a market modification.
Giving viewers more access to broadcast signals originating from the state in which they live is one goal of STELAR, but there are others, NCTA said in its response. The FCC also needs to look at how other commission rules might affect an out-of-market station, such as network non-duplication rules possibly leading to a station having to black out much of its broadcast day. “Mandating such partial carriage is likely to frustrate, rather than benefit, cable customers,” NCTA said.
Dish worries about retransmission fees were brought up more than once in reply comments. While Dish has argued that a DBS system shouldn't have to pay retransmission consent fees when a station’s market is modified, the NAB said, “As DISH is well aware, no satellite carrier is or can be ‘required’ to pay retransmission consent fees. DISH’s proposal that the commission somehow ensure that it does ‘not have to pay additional retransmission consent fees’ is exactly the sort of governmental intrusion into the transmission consent negotiation process that the Commission previously has determined is contrary to Congressional intent and beyond the scope of its statutory authority.” Dish’s hypothetical about having to pay retransmission fees to two affiliates of the same network “is misplaced,” Virginia Broadcasting said.