[opendtv] FCC Retrans Proposal Includes Elimination of Non-Dupe Rule

From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
Date: Thu, 3 Mar 2011 19:53:44 -0600
http://www.tvtechnology.com/article/114832

FCC Retrans Proposal Includes Elimination of Non-Dupe Rule
03.03.2011.

WASHINGTON: The Federal Communications Commission today approved a proposal to 
reform retransmission rules. The five commissioners voted unanimously in favor 
of a Notice of Proposed Rulemaking "to consider possible amendments" to current 
rules governing how TV stations and cable operators hammer out carriage 
agreements.

Among other things, the commission proposes to do away with the network 
non-duplication and syndication exclusivity rules. This would allow cable 
operators to carry an out-of-market TV station should an in-market affiliate 
pull its signal in a retransmission stand-off. Currently, stations can assert 
non-duplication rights by sending notifications to cable operators within 60 
days of a network affiliate agreement.

The proposal also seeks feedback on what constitutes "good-faith" negotiations, 
as retrans parties are now required to conduct. It also seeks comment on 
informing the public when service disruptions may arise from an impasse. The 
commission said it would also seek comment on "any other revisions or additions 
to its rules that would improve the retransmission consent negotiation process 
and help protect consumers from service disruptions."

The commission noted that the proposed rulemaking reflects the statutory 
framework established by Congress, but also "expresses the FCC's view that it 
doesn't have the authority to require broadcast television stations to provide 
their signals to pay television providers or to require binding arbitration."

That comment is key, according to John Hane is an attorney with Pillsbury 
Winthrop Shaw Pittman LLP in Washington.

"The FCC meeting confirmed what everyone already knows--that the FCC can't 
order carriage of broadcast stations without their consent," he said. "The 
clear message to cable and satellite providers is, don't expect the FCC to bail 
you out when your negotiating strategy isn't working. All five commissioners 
voted to take a look at the negotiating rules, but I didn't detect much genuine 
enthusiasm for more government intervention in private business negotiations."

The Communications Act requires pay TV operators to obtain a television 
station's consent before carrying that station's signals, and to negotiate in 
"good faith." The rules have been in effect since 1992, long before the advent 
of HDTV, which instigated much of the discord now surrounding retrans 
negotiations. When cable operators started charging extra for HD tiers, 
broadcasters held out for a piece of the action. For years, cable operators 
paid monthly, per-subscriber fees to cable-only networks, but not to broadcast 
TV stations.

Network-affiliated stations now regularly negotiate for these sub fees, 
sometimes pulling their signals when talks reach a stand-off. Such was the case 
last fall when Fox stations were pulled from Cablevision systems for 15 days. 
Cablevision's footprint covers much of metropolitan New York, giving the 
stalemate a particularly high profile. Lawmakers called for retrans reform, and 
the FCC soon signaled its compliance, and today's NRPM was the result.

Gordon Smith, chief of the National Association of Broadcasters, offered this 
reaction:

"NAB is pleased the FCC correctly concluded that the marketplace is best 
equipped to negotiate private business contracts, and that it lacks authority 
to impose the heavy-handed government tools that pay-TV providers desire. . . 
In more than 99 out of 100 retransmission consent negotiations, agreements are 
concluded successfully and invisibly."

The American Cable Association, which has been bulldogging for retrans reform, 
also gave the FCC props, but in this case, for taking up the issue at all.

"For many years, ACA has been in the vanguard by warning that retransmission 
consent is a badly outdated system that inflicts serious economic harm on 
consumers served by independent cable operators put on the defensive by the 
aggressive cash demands of market-dominant TV stations," said ACA chief Matt 
Polka in a statement. "ACA commends the FCC for agreeing that the time has come 
to give careful consideration to new TV station carriage rules."

And finally, Public Knowledge, the consumer affairs think tank that watches the 
TV industry like a hawk. PK legal director, Harold Feld, asserted that the FCC 
could use a bigger hammer.

"We hope that at some point the commission will come to realize it has the 
statutory authority to relieve the consumer distress at being caught in the 
middle of the disputes," he said. "We will make that point again to the 
commission, and hope it will take a more active role than it has in the past in 
bringing some order to the retransmission chaos."

Earlier in the day, Sinclair Broadcast Group quietly reached an retrans 
agreement-in-principle with Comcast, the largest multichannel video provider in 
the United States. (See "Sinclair Cuts Retrans Agreement Hours Before FCC 
Reconsiders Rules")

-- Deborah D. McAdams

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[opendtv] FCC Retrans Proposal Includes Elimination of Non-Dupe Rule

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