[opendtv] Analysis: KNOW THE RULES OF THE RETRANS GAME
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Sat, 10 Mar 2007 09:42:35 -0500
http://www.tvnewsday.com/articles/2007/03/09/daily.3/
Legal Memo by Michael D. Berg
KNOW THE RULES OF THE RETRANS GAME
TVNEWSDAY, Mar. 9, 8:09 AM ET
If it's retransmission consent gold you seek, make sure you
understand your rights and the FCC regs governing negotiations.
By Michael D. Berg
After 14 years on the books, retransmission consent is sure grabbing
headlines now.
Story continues after the ad
Last week, Belo and Cox announced a down-to-the-deadline agreement
covering 1.4 million cable subscribers, and nine unnamed operators
agreed to pay CBS cash for consent-a long-standing cable taboo.
Last month Sinclair and Mediacom reached an agreement, apparently
involving cash, that restored 24 stations to 700,000 Mediacom
subscribers. The deal was reached only after the FCC denied
Mediacom's request to compel Sinclair's interim consent in January.
In the last few days CBS, LIN TV and other broadcasters have been
vocal about their intent to seek cash from the largest cable
operators when current retrans agreements expire.
Retrans consent also plays an important role in the run-up to the
Feb. 17, 2009, DTV transition. Between now and then, stations
broadcasting in analog and digital-now all but a few-can get must
carry only for their analog signal. The companion digital signal can
be carried only through a retrans agreement.
Also under current law, stations that go all-digital on or before the
transition date can get must carry for their main digital signal, but
not for multicast subchannels. They need retransmission consent.
Against this backdrop, here is a snapshot of FCC rules on retrans
negotiations and agreements. Like good wine, the rules have gained
complexity and appreciation with age. The two main ones are the
retrans rule and the good faith rule.
The retrans rule (Section 76.64)-In the 1992 Cable Act, Congress
created a new property right for broadcasters in their TV signal with
regard to cable and other multichannel video program distributors
(MVPDs) including satellite and now telephone companies.
The rule implements that right by prohibiting MVPDs from
retransmitting commercial TV broadcast signals without the express
written authority of the originating station unless the station has
elected must carry.
For the first time in the long history of broadcasting and cable, the
rule required operators to get stations' permission before carrying
their signals.
For must carry, FCC rules dictate the terms of carriage and require
no written agreement. Payment for must carry, or for must carry
channel position, is prohibited.
In contrast, under retrans almost everything-including who pays what
kind of compensation to whom-is negotiable, and a written agreement
is required.
Under the rule, written retrans agreements:
* May not be exclusive (i.e., the station may not limit its carriage
to one MVPD, and the operator may not agree to exclude other TV
signals).
* Must specify the extent of consent granted (i.e., for the entire
signal or any portion of it). This applies to analog and digital
signals.
The retrans rule requires stations to choose between retrans and must
carry every three years. Current elections were made by Oct. 1, 2005,
and apply to calendar years 2006-2008. The next election is Oct. 1,
2008, and covers 2009-11.
New TV stations, and stations that go all-digital and return their
analog spectrum, must make their initial election during the period
from 60 days before to 30 days after the start of new or digital-only
broadcasting. Those elections take effect 90 days after being made.
The term of agreements-when they expire-is negotiable, and can be
longer or shorter than the three-year election periods. That is one
reason why some retrans agreements are expiring now, in the middle of
an election cycle, and creating headlines.
Another reason is that sometimes operators and stations cannot agree
on details in the three months between the October elections and the
start of the three years they cover (Jan. 1, 2006). As a result,
existing agreements are extended, often more than once, by mutual
consent while negotiations continue.
Extensions should be written and signed. Both operator and station
have incentives to avoid gaps in consent. During them, carriage by
the operator is prohibited.
In some instances now, such as the recent Sinclair/Mediacom dispute,
the broadcaster may decide to allow consent to expire to hasten
negotiations.
The good faith rule (Section 76.65)-This rule requires both sides to
negotiate in good faith. (Incredibly, when Congress first required
the rule in 2000, the obligation fell only on TV stations. Not until
August 2005 was good faith applied to MVPDs as the "reciprocal
bargaining obligation.")
How can a rule define good faith? In the case of retrans, in two
ways: by specific standards (a list of "don'ts") or by the context
("totality of the circumstances").
Either party violates good faith by refusing to negotiate retrans,
name a representative with authority to bind the negotiator, meet at
reasonable times and locations, put forth more than one unilateral
proposal or sign a written agreement containing the parties' full
understanding.
Other violations are failing to answer, including reasons for
rejection of a proposal by the other side, and agreeing that either
negotiating party will not have a retrans agreement with another TV
station or MVPD, which also violates the retrans rule.
In addition, a station or operator can try to show that the other
party failed to deal in good faith based on the totality of the
circumstances surrounding the negotiations.
Enforcement of the good faith rule is complaint driven. An unhappy
party must file a complaint within one year of the alleged violation,
of the signing of the agreement or of notifying the alleged violator
of the intent to complain.
A separate FCC rule, modeled on the above rules, applies to DBS. For
telco MVPDs like AT&T and Verizon, the FCC has not ruled on their
regulatory status, but they carry stations under retrans agreements.
The rules are the framework for retrans negotiations. What happens
within that framework is making news. For business and legal reasons,
all TV companies should follow retrans developments and focus on
carriage strategy surrounding the digital transition date.
This columns on TV law and regulation by Michael D. Berg, a veteran
Washington, D.C. communications lawyer and the principal in the Law
Office of Michael D. Berg, appears monthly. He is also the co-author
of FCC Lobbying: A Handbook of Insider Tips and Practical Advice. He
can be reached at mberg@xxxxxxxxxxxxxxxxxx or 202-298-2539.
Note: This article provides general guidance only and is not a
substitute for individualized legal advice
----------------------------------------------------------------------
You can UNSUBSCRIBE from the OpenDTV list in two ways:
- Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org
- By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word
unsubscribe in the subject line.
Other related posts:
- » [opendtv] Analysis: KNOW THE RULES OF THE RETRANS GAME
