The FCC chairman proposes to eliminate the network non-dupe and syndicated exclusivity rules and to launch a review of the “good faith” provision of the retrans rules — moves that could weaken broadcasters’ leverage in retrans negotiations.
In moves that could undermine broadcasters’ ability to negotiate retransmission consent fees, FCC Chairman Tom Wheeler today proposed to eliminate the agency’s network non-duplication and syndicated exclusivity rules and to review the requirement that parties in retrans negotiations act in “good faith.”
The proposals were circulated for a vote among the other four commissioners.
Wheeler explained the moves on the official FCC blog. The exclusivity rules prevent cable and satellite operators “from providing subscribers an out-of-market broadcast station, for example, when a retransmission consent dispute results in a local station being dropped from carriage.
“In this item, the commission takes its thumb off the scales and leaves the scope of such exclusivity to be decided by the parties…. In so doing, the commission would take 50-year-old rules off our books that have been rendered unnecessary by today’s marketplace.”
Broadcasters have long opposed tampering with the rules. By helping to preserve their local exclusivity to network and syndication programming, they say, the rules strengthen their hand in retrans dealings.
In a statement, NAB EVP Dennis Wharton called them a “lynchpin of the local broadcast business.”
Their elimination would “threaten the vibrancy of our uniquely free and local broadcast system,” he said. “It is curious that the FCC keeps relying on the rationale that it is taking such pro pay-TV actions because the rules are decades old, but refuses to even review or remove broadcast ownership rules that were imposed under market circumstances that clearly no longer exist.”
The review of the “good faith” requirement was mandated by Congress, Wheeler said, noting that some retrans negotiations have led to “stand-offs and temporary blackouts for pay TV customers.”
“The proposed review undertakes a robust examination of practices used by parties in retransmission consent negotiations…. The goal … is to ensure that these negotiations are conducted fairly and in a way that protects consumers,” he added.