Video Distributors Continue Assault on Blackout Rebate NPRM Authority

Video distributor and programmer disagreements over who is at fault in failed retrans talks are irrelevant to consumers, as the harm to subscribers is the same, locality interests including Fairfax County, Virginia, Boston and the National Association of Telecommunications Officers and Advisors said. They said cable operators complaining that the cost of rebates falls on them can negotiate to have programmers reimburse them for rebates in the event of a blackout, or they can agree to split the costs. The Colorado Communications and Utility Alliance urged against preempting state and local laws except in circumstances where those laws offer less protection than is provided under federal law. "By preserving local authority, the Commission can ensure that channel blackouts impacting smaller or more isolated markets receive adequate attention while preserving the Commission’s role in addressing blackouts that impact consumers across multiple states or media markets," it said.

NAB was dismissive of MVPDs' implementation complaints. "t's too hard to do, so can you just let us keep all the money?" it said, tongue in cheek. It also challenged the idea that blackouts from failed retrans consent talks are on the rise or commonplace.

Multiple critics challenged the FCC's authority. Such rebates "cannot reasonably be considered within the Commission’s jurisdiction to establish certain 'customer service standards,'" Verizon said. It said the rocketing costs of programming shows that programmers already have significant leverage in carriage talks, and the FCC "should not place its thumb on the scale to further advantage the side that has dramatically increased prices." Rebates will only exacerbate the problem of blackouts due to failed retrans talks, it said. Dish Network reiterated its call for retrans revisions, which Verizon backed. USTelecom said forcing MVPDs to provide rebates is rate regulation, which the law prohibits.

NCTA pushed back on the idea of state and local governments being able to apply rebate requirements to cable service. "A patchwork of state and local regulations would be unduly burdensome and would make it more difficult for cable operators -- who operate on a franchise-by-franchise basis -- to compete with nationwide DBS providers and online video distributors," NCTA said. It scoffed at the idea MVPDs would create retrans impasses just to build policy momentum behind retrans changes.

DirecTV questioned the FCC's suggestion that the commission has ancillary jurisdiction over direct broadcast satellite the same way it can regulate cable rebates and early-termination fees. Pointing to the rebates proceeding and the all-in video pricing order adopted in March (see 2403140050), DirecTV representatives told Media Bureau and Office of General Counsel staffers that traditional video providers, such as cable and DBS, are losing subscribers to streaming "precisely because such providers are able to provide programming to subscribers with fewer hindrances and often at lower costs."

While blackouts are a consumer annoyance, the FCC's framing of the issue oversimplifies retrans talks "and mischaracterizes consumers’ agency in subscribing to and using multichannel-video-programming distributors," the International Center for Law & Economics said. The commission is proposing "unworkable and arbitrary rules." With rebates potentially being as small as a few cents, the cost to the FCC, cable and DBS operators "would be many times greater than the amount of rebates provided to consumers," it added.

Affiliates associations of the Big Four broadcasters used the proceeding to reiterate their call that virtual MVPDs be subject to retrans consent rules the same as traditional MVPDs (see 2204220049).