Compulsory License Not Inextricably Tied to Exclusivity Rules, ACA Says

move to ax the syndicated exclusivity and network nonduplication rules shouldn't and can't be done while the compulsory license remains (see 1509100049). "It is in no way 'unthinkable'" for the FCC to end or modify the exclusivity rules while compulsory license stands, ACA said, pointing to 1980, when the FCC ended the syndicated exclusivity rules. Pointing to a subsequent U.S. Court of Appeals for the 2nd Circuit ruling, ACA said "the suggestion that the Copyright Act created a mandate for the retention of the program exclusivity rules is groundless." Any pointing to the 1971 Consensus Agreement on cable carriage of broadcast signals is "disingenuous," ACA said, because broadcasters were agitating for years for changes and amendments that resulted in being granted retransmission consent rights in 1992. Getting rid of compulsory license repeal "would subject cable to full copyright liability while simultaneously imposing on the industry existing duplicative copyright surrogates in the form of retransmission consent and broadcast exclusivity. Repeal of the compulsory license also would create a conflict between the Copyright Act and the Communications Act's must carry requirements." Meanwhile, NAB in a separate filing to be posted in 10-71 attacked previous ACA arguments that ending the exclusivity rules needs to be paired with a prohibition on network interference into affiliates' out-of-market retransmission consent negotiations (see 1509140042). "Their proposal would wildly exacerbate the very problem they are purportedly seeking to solve," NAB said, saying the ACA proposal is proof the cable industry's main motivation is to limit broadcasters' ability to negotiate with program suppliers for local market exclusivity, with the end goal being the ability to import broadcast signals from local markets anywhere "with no restriction or recourse." That would "eviscerate localism, substantially depress the market value of syndicated and network programming, and increase consumer confusion and frustration," NAB said. Exclusivity contracts eliminate the free-rider problem of out-of-market TV stations and multichannel video programming distributors taking advantage of local TV station and network investments, NAB said. Any ban on exclusive broadcaster/program supplier contracts interferes with contract rights and "runs contrary to well-established economic thinking on the benefits of exclusive arrangements," it said. "Rather than impose intrusive, legally-questionable and economically inefficient limitations on the ability of broadcasters and program suppliers to contract for exclusive distribution of content, the Commission should simply keep the existing rules in place," NAB said. "They impose no costs on consumers or the Commission."