New FCC Look at Indies on MVPDs Could Refocus on Carriage
Issues from the retransmission consent regime and carriage agreement contractual terms such as most-favored nation (MFN) clauses could be the focus of a forthcoming FCC proceeding on carriage headwinds faced by independent programmers. Chairwoman Jessica Rosenworcel has said the agency would look into carriage issues, commonly called hurdles by programmers and allies, and the effect of streaming on the video market (see 2111180047). NCTA didn't comment Friday.
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The agency hasn't made much progress on carriage and there's a need to look at the issues "with fresh eyes," Commissioner Brendan Carr said at a Media Institute talk last week (see 2112090046). Former Commissioner Mignon Clyburn, who spearheaded the FCC's 2016 look at indie programmer carriage, emailed that she's hopeful the agency goes further than it did previously. "When it comes to media ownership, the marketplace is neither a reflection of the rich American mosaic nor is it open for business when innovative entrepreneurs seek opportunities," she said. Rosenworcel's office didn't comment Friday.
The proceeding will likely involve carriage agreement contractual clauses such as MFN and alternative distribution method (ADM), said Public Knowledge Legal Director John Bergmayer. Such items were also a focus when the FCC looked in depth at the issue five years ago (see 1602180044). He said PK will be active in whatever proceeding the FCC undertakes, remaking and updating arguments and urging a tightening of existing program carriage and access rules. He said programmers are often reluctant to complain about specific MVPDs, but a proceeding could provide some cover.
Being carried by MVPDs remains a priority, and EWTN Global Catholic Network wants to make sure it also has opportunities for alternative modes of distribution, said Vice President-Marketing Chris Wegemer. "If the souls happen to be watching on a different platform, we would like to make ourselves available there," he said, citing its being on Roku and Amazon Fire. He said the carriage environment was particularly difficult when EWTN started in 1981, with cable systems far more limited in how many channels they could accommodate. "We just had to persuade, cable operator by cable operator," he said. Today, EWTN is carried by numerous MVPDs, but it's not necessarily available across their entire footprints, Wegemer said. He said EWTN continues to seek wider distribution, and also carriage of its Spanish language El Canal Catolico.
Wegemer said EWTN hopes an FCC proceeding would aim for "just a level playing field" for programmers. He said that's instead of indies having to compete against bundled networks, particularly bundled programming from big programmers offering financial incentives to distributors.
Ovation TV is carried by several major MVPDs -- "without them we wouldn't have a business," said Executive Vice President-Content Distribution John Malkin. Inability to get on some others "has been very frustrating," he said. Ovation has popular arts and entertainment programming and seeks "extremely reasonable" license fees, but a variety of MVPDs give chilly reception, he said. He said it's typically told the issue boils down to costs, with MVPDs complaining about retrans rates rising rapidly, and that in turn cutting into their ability to take on additional expenses. "Of course they can afford us," he said. "The amount of money they would have to spend [for Ovation] is a rounding error" for a big national or regional MVPD. Malkin said revising the retrans rules regime, if it helped alleviate some cost inflation distributors are facing, could have a ripple effect on making them more willing to try indie programmers.
The carriage challenges haven't changed much since the agency last examined things, with MVPDs complaining that sports network licensing fees and broadcast retrans fees leave them without the cash to add new networks, said Up Entertainment Executive Vice President-Content Distribution Hal Rosenberg. "That's a hard pill to take." That's especially so given the dearth elsewhere of positive programming and African American lifestyle programming that Up offers, and the low cost of carrying Up, he said. Rosenberg said MVPDs also cited contractual obligations that adding Up would require adding another channel from a big programmer. He said virtual MVPDs are a particular focus for Up, and some are taking similar stances as traditional MVPDs. He said it has good relationships with the MVPDs that do carry Up, but others are typically difficult.
Along with looking at how retrans affects the economics of paying for indie channels, the FCC should look at onerous contractual provisions that can be a barrier to market entry such as MFNs and ADMs, said Up General Counsel Reta Peery. She said ADM terms in some instances have become less problematic in recent years.