Two New Bills Wage War Against Retrans

The Next Generation Television Marketplace Act would repeal compulsory copyright licenses, various mandates on private sector companies and consumers, and FCC broadcast and media ownership rules. And the Video CHOICE Act would, among other things, give the FCC authority to grant interim carriage of a TV station during a retransmission consent negotiation impasse.

Lawmakers Thursday introduced two pieces of legislations that would shake up the law governing the relationship between broadcasters and cable and satellite operators. One would water down broadcasters’ retransmisson consent rights; the other would eliminate them altogether.

Neither is seen as having much chance of becoming law, but they provide an indication of how some lawmakers are thinking, and some elements could survive in other, more viable, legislation.

From Rep. Steve Scalise (R.-La.) and Sen. Jim DeMint (R-S.C.) comes the Next Generation Television Marketplace Act, the more radical of the two measures. It would repeal the compulsory copyright license, must carry, retransmission consent and the broadcast ownership rules.

“Over the last several decades, communications and entertainment technology has become more advanced, while the laws governing the industry have remained relatively unchanged,” Scalise said. “Together, decades-old cable and satellite ‘compulsory copyright’ licenses and ‘retransmission consent’ regulations currently influence many aspects of the broadcast programming consumers watch on TV. The government should not be in the business of picking winners and losers, and the Next Generation Television Marketplace Act ensures that by removing the heavy-hand of government, the market is free to operate in a way that continues to benefit consumers and encourage innovation.”

The second bill, introduced by Reps. Anna G. Eshoo (D-Calif.) and Zoe Lofgren (D-Calif.), strikes at the heart of retransmission consent.

The Video CHOICE (Consumers Have Options in Choosing Entertainment) Act would “eliminate broadcast television blackouts and give consumers greater flexibility to choose the channels they receive each month from their cable, satellite or other pay TV provider,” the sponsors said.

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“During the three months since I released draft legislation — the message from individuals, communications companies and consumer groups has been abundantly clear: our video laws are in need of reform,” Eshoo said in a statement. “My bill would put an end to broadcast television blackouts and ensure consumers aren’t held hostage by a dispute they have no control over. Recurring TV blackouts coupled with the rising cost of broadcast television programming has left consumers frustrated and looking to Congress and the FCC for answers.”

“Internet users and television customers should not be held hostage when business negotiation disputes arise between cable and content providers,” said Lofgren. “It’s unfair to subject consumers to service blackouts or blocked online content. This bill offers the basic consumer protections and choices they should receive in television and online services.”

The Video CHOICE Act has five key provisions:

  • Preventing Broadcast Television Blackouts — Gives the FCC explicit statutory authority to grant interim carriage of a television station during a retransmission consent negotiation impasse.
  • Ensuring Consumer Choice in Cable Programming — Ensures that a consumer can purchase cable television service without subscribing to the broadcast stations electing retransmission consent.
  • Wholesale Unbundling of Broadcast Stations in Retransmission Consent Negotiations — Prohibits a television station engaged in a retransmission consent negotiation from making their owned or affiliated cable programming a condition for receiving broadcast programming.
  • Examination into the Blocking of a Broadcast Station’s Owned or Affiliated Online Content During Retransmission Consent Negotiations — Instructs the FCC to examine whether the blocking of a television station’s owned or affiliated online content during a retransmission consent negotiation constitutes a failure to negotiate in “good faith.”
  • FCC Study of Sports Programming Costs — Calls for an FCC study of programming costs for regional and national sports networks in the top 20 regional sports markets.

Reacting to the bills, NCTA President Michael Powell released a statement that suggests that the NCTA might finally be entering the fray to reduce broadcasters’ retrans clout. To date, it has been sitting out the battle because of large presence of Comcast on its board. Comcast is owner of NBC and the NBC O&Os, among the beneficiaries of retrans.

“The bills introduced today by Reps. Eshoo and Scalise are very different, but each independently highlights what is quickly becoming a growing consensus — namely, that laws enacted over 20 years ago are out of sync with the realities of today’s video marketplace and in many cases serve to inhibit innovation, thwart fair competition, and harm consumers,” Powell said. “In particular, we welcome an examination of a retransmission consent regime that is increasingly fractured and in need of some repair.  We look forward to working with these members, and all members of the committee, as Congress considers responsible reforms.”

NAB President Gordon Smith said broadcasters oppose both bills. “We find it sad that pay TV companies who built their broadband, voice and video businesses on the backs of local TV signals now balk at the notion of paying a fair market rate for the most-watched programming on television…. We will constructively engage with policymakers seeking to improve upon a retransmission consent law that is now working over 99% of the time.”


Comments (21)

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Don Thompson says:

December 12, 2013 at 9:05 pm

Given Powell’s statement, it seems like Time Warner Cable now has more influenced than NAB inside NCTA. It seems Time Warner Cable got to Powell and Comcast and convinced them that it looked ridiculous that Comcast is vetoing any effort to reform retransmission consent.

    Wagner Pereira says:

    December 13, 2013 at 2:44 pm

    What on earth makes you think the NAB EVER had any influence inside the NCTA? TWC has ALWAYS had more influence inside the NCTA than the NAB.

Brian Bussey says:

December 13, 2013 at 9:32 am

these bills will only continue the growth of our caste system for television programming. the free over the air programming will become the ghetto of television ( see the ridiculous sports licensing fee’s cable operators are paying).

Bill Greep says:

December 13, 2013 at 10:09 am

One of these days it will occur to politicians that those who take away free TV will pay a price from their constituents who can’t afford cable or home satellite anymore.

    Nicole Dee says:

    December 14, 2013 at 12:59 pm

    No one is proposing to take away free OTA TV. What they want is an end to the greed of OTA station owners who use retransmission consent. Cable televison(CATV) started out as Community Antenna TV(CATV) where enormous antennas were erected to pick up OTA TV signals in areas where OTA was not normally receivable by homeowners. The received signals were amplified and sent through coaxial cable to subscribers. The revenue concept of free OTA TV was not violated if the broadcasting station could get a reasonably accurate count of viewers in the distant location. Thus you could show increased viewership to advertisers, who might pay more for reaching a larger audience. Instead of working the advertising angle, some OTA station owners wanted the new viewers to directly pay them for the content they could now view. It was much easier to threaten legal and legislative action than to work the ad angle, thus retransmission consent fees were to become a new normal in OTA revenue streams. Blame the station owners for paying enough in bribes to government persons to enable such a situation to be “legal”. Blame the voters who reelect these corporate bought and paid for Representatives and Senators.

Bobbi Proctor says:

December 13, 2013 at 12:14 pm

We could afford payTV, but chose not to pay the $100 a month it would cost to get HDTV service for our HD sets. That’s over $1,000 a year and we decided we have better things to do with the money–college tuition, travel, attending sporting events, etc. When I look through the TV schedule I see very little I want to see that isn’t on local broadcast TV. There are some sporting events that I would watch if we had cable, but I really don’t want to be a couch potato anyway. Besides, the HD signal is better with an antenna.

Jay Miller says:

December 13, 2013 at 12:40 pm

If anyone can do it..These lefties at the FCC are going to screw up the greatest business model of all time . Local TV..and not one of them has ever worked in a station or a real job in their lives for that matter..Just like Obama

    Teri Keene says:

    December 13, 2013 at 8:20 pm

    @ tjxx And you people on the right are busy consolidating everything in the industry, putting qualified people out of work and making TV and radio look like and sound like crap. Just keep on shillin’ for Cheap Channel and SinCrap…

    Nicole Dee says:

    December 14, 2013 at 1:04 pm

    The local OTA stations got greedy and lazy when retransmission consent fees became a legal normal. OTA’s business model was to be supported by advertising revenues. If a cable or satellite pay TV distributor increases your audience size, you try to get more revenue for the ads you sell because of the increased viewership. You should not be engaged in demanding per subscriber fee payments.

Ellen Samrock says:

December 13, 2013 at 12:41 pm

Nobody wants a blackout. The cable ops don’t want it, the stations don’t want it and certainly the public doesn’t want it. It’s in everyone’s best interest to re-negotiate a consent agreement before the existing one runs out. So bills like this are really unnecessary. The problem, if I’m reading the Eshoo bill correctly, is that if a cable provider is recalcitrant come renewal time they can tie up a station’s programming for weeks (if not months) and drag their feet in the negotiations process while enjoying the benefits of the programming. The station has to convince the FCC of bad faith on the part of the cable provider before they can take their signal off the provider’s line-up. It drags an already over-worked FCC into the fray. And the Ensuring Consumer Choice in Cable Programming provision wrongly implies that broadcasters are the reason for why cable bills are so high–a notion fostered by cable companies by breaking out the cost of broadcast stations on their monthly statements. The other bill, totally eliminating retrans agreements and must carry, would effectively end the main reason why most broadcast station owners want to remain such. The drop in revenue would be drastic. These are both bad pieces of proposed legislation.

    Wagner Pereira says:

    December 13, 2013 at 2:43 pm

    I disagree that breaking out OTA broadcast fees on a seperate line ($1.50 last I heard) was a bad deal. In fact, i think it will blow up in Cable’s face. The typical cable bill is $100 and a customer sees a $1.50 charge for Broadcast TV which accounts for 35% of the viewing. The customer should be screaming bloody murder over the $100 at that point.

    Nicole Dee says:

    December 14, 2013 at 1:11 pm

    The cable and satellite companies do not arbitarily block OTA programming when retransmission consent fee disputes go beyond the contract end date. Becasue of contract law they cannot continue to transimit such content without the express consent of the content provider or producer, such as an OTA station. The OTA stations refuse to give such express consent , so the cable operator cannot show the content. Again the problem is greed by OTA station owners. Make ALL OTA, including multicasting subchannels, subject to must carry, and get rid of the retransmission consent fees entirely. No more fee disputes, because there would be no more OTA fees to be disputed.

Don Thompson says:

December 13, 2013 at 7:19 pm

If broadcast TV accounted for 35% of the viewing, the percentage of cable subscribers who took just the broadcast basic tier should a lot higher but it’s not. I think less than 5% fall into that category.

    Nicole Dee says:

    December 14, 2013 at 1:17 pm

    The families with children want expanded child oriented content beyond PBS, so you have demand for Nick Jr and such. You get some niche programming that not every subscriber watches all the time. Thus even in houses that watch a lot of OTA on cable, the basic tier will not do, and they sign up for expanded basic. That is the tier where almost all the content producers would like to mandate to the cable system operators that their programming be placed.

Don Thompson says:

December 13, 2013 at 7:20 pm

Cashcasters have such a high opinion of themselves and their alleged dedication to the public interest, which is often asserted but seldom verified. If NAB decided to come up with a new logo, it should include a TV station executive taking a selfie.

Mary Collin says:

December 13, 2013 at 9:38 pm

I must be missing something, here. We as network affiliates in our 100+ market have been getting 25 to 40 cents per sub from our cable and satellite provider and they are collecting 1.25 from each sub, for each station…where’s the beef?

    Nicole Dee says:

    December 14, 2013 at 1:25 pm

    The beef is that you, OTA broadcasters, are supposed to be entirely supported by advertising revenues. It does not matter if your audience was enlarged by added satellit or cable system operator subscribers. You are supposed to negotiate advertising revenues that reflect the added viewers and keep your operations financially sound. This retransmission nonsense was create from the illogical concept that the original Community Antenna TV(CATV) operators were getting too much revenue from their subscribers. The greedy OTA station owners had no idea of how much it cost to deploy, maintain, repair, and properly service the customers of such a Community Antenna TV service.

    Terry Dreher says:

    December 16, 2013 at 11:16 am

    Dave…correct me if I’m wrong. How much should a cable company charge it’s customers to receive and re-transmit OTA programming, per channel? $1, $2, $5? And how much should the individual station be entitled for the collection of that “fee”? What is a reasonable rate of return for carrying the channel? Double, Triple, 10 times the actual cost of delivery? It can’t possibly cost the cable company any more or less to carry the OTA channel compared to the satellite delivered channel. Remember, Dave, individual stations are no longer paid by their affiliated networks for carrying network programs. Remember, Dave, our dear-leaders in Washington forced every broadcaster to switch to digital transmission. It didn’t matter to our dear-leaders that the general public wasn’t marching on Washington DC demanding that broadcasters transmit digitally. No…it was politicians who demanded the OTA switch to digital so they (the politicians) could sell “the public airwaves” to the highest bidder. Digital TV was nothing more than a power and cash grab from the broadcasters to the pockets of the ruling-class. Yes, cable and satellite companies pay “fees” to the local politicians while broadcasters do not. Does that make it right for the cable/sat company to charge x-amount more to their customers? OTA doesn’t charge any customer who has an antenna. And for those folks, Dave, broadcasters are absolutely advertiser-supported.

Bobbi Proctor says:

December 14, 2013 at 11:24 am

I like the blackouts. While cable subscribers pay a lot and lose some programming we pay nothing and can still watch our favorite network programs in great HDTV.


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