FCC To Review Its Retrans Consent Rules

The FCC today released a Notice of Proposed Rulemaking (NPRM) to consider possible amendments to rules concerning retransmission consent negotiations.  The NPRM proposes changes consistent with Congress’ statutory framework for market-based negotiations that are designed to minimize video programming service disruptions to consumers caused by disputes between television stations and pay television services about broadcast program carriage.

The NPRM 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.

The commission said that “the Communications Act requires cable systems and other pay television services to obtain a television station’s ‘retransmission consent’ before carrying the station’s signal. The Act also requires broadcasters and pay television service providers to negotiate retransmission consent agreements in good faith. Since Congress enacted the retransmission consent regime in 1992, there have been significant changes in the video programming marketplace that have contributed to changes in negotiations for retransmission consent.  In light of these changes, the FCC is reexamining its rules.”

Specifically, the NPRM seeks comment on proposals that would:

• Provide more guidance to the negotiating parties on good-faith negotiation requirements.
• Improve notice to consumers in advance of possible service disruptions caused by impasses in retransmission consent negotiations.
• Eliminate the commission’s network non-duplication and syndicated exclusivity rules, which provide a means for parties to enforce certain exclusive contractual rights to network or syndicated programming through the commission rather than through the courts.

The FCC is seeking public 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.

In response to the commission’s announcement, NAB President-CEO Gordon Smith said: “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. We will actively engage in the commission’s new proceeding.

“In more than 99 out of 100 retransmission consent negotiations, agreements are concluded successfully and invisibly. Broadcasters will continue working earnestly to ensure that consumers receive no TV service disruptions, mindful that even the threat of injecting government into a market-based process only incentivizes pay TV providers to game the process.”

Also commenting on the FCC announcement, Matthew Polka, president-CEO of the American Cable Association, said: “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. ACA commends the FCC for agreeing that the time has come to give careful consideration to new TV station carriage rules to ensure they reflect the market as it exists today and that consumers get to realize the benefits of real choice and robust competition.”