Jessell | Let’s Do Away With Anti-Retrans Quinquennials

Of course, we all know that there is nothing more important to the health and well being of TV broadcasting than retransmission consent. This regulatory stand-in for copyright is the means by which the medium raises the revenue it needs to pay for pro sports rights and premium primetime programming.

Without retrans and the $10 billion or so a year it generates, broadcasting would slowly fade away as the newspaper business is doing now.

Yet, this fundamental right to get paid for your product is jeopardized every five years when law that grants satellite TV operators a distant-signal license – the right to offer out-of-market Big Four broadcast signals to homes beyond the reach of the signals of local affiliates – comes up for renewal.

STELAR, the current acronym for the law, expires at the end of this year. As they have in the past when the expiration loomed, the satellite operators are working hard to preserve the distant-signals by renewing the law. Fair enough.

But as they also have in the past when expiration loomed, the operators in league with cable – collectively, the MVPDs – are expected to once again push for add-ons to the law that would undermine retransmission consent. Not fair.

In the past, they successfully attached provisions banning two or more independently owned stations in a market from jointly negotiating for retrans and that require broadcasters and MVPDs to negotiate for retrans in “good faith.”

Although these provisions have had little impact on broadcasters’ ability to negotiate for a fair share of the $30 billion that the MVPDs pay out to programming services each year, their intention to diminish retrans is clear. (As you know, I don’t believe that broadcasters are anywhere close to getting their fair share, but each new round of retrans agreements bring them a little closer.)

We don’t know what MVPDs have in mind this go-round because their champions in Congress, notably Anna Eshoo (D-Calif.) and Steve Scalise (R-La.), have yet to float any language.

But we know that they are cooking up something because the satellite operators are preparing the way by making retrans trouble. After all, you can’t ask Congress to fix a problem if there is no recent evidence of something needing fixing.

This month started with AT&T’s DirecTV dropping all the Nexstar stations after failing to agree on the new retrans price. That was followed by Dish allowing Meredith stations to go dark in 16 markets. And, then, over this past weekend, the CBS O&Os disappeared on DirecTV.

The CBS and Nexstar blackouts are huge. I’m guessing that DirecTV subscribers in at least two thirds of TV markets are looking at blank screens right now. That ground covers a lot of congressional districts.

The speculation is that the MVPDs might try to resurrect their so-called local choice ploy. Rather than charging the MVPDs a wholesale price, broadcasters would set a retail price for their signals, and the MVPDs would make them available to consumers who would decide whether they wanted to pay for one, some or none. In other words, broadcast signals would be a la carte, while the all the basic cable networks would continue to be offered in one big clump as they are now.

Local choice is a terrible idea for broadcasters and consumers and maybe even the MVPDs. It made no sense when the MVPDs first tried to stick it in STELAR in 2014 and it makes no sense now. For a full argument on its vacancy, see communications attorney’s Jack Goodman’s op-ed for TVNewsCheck.

There is also talk the MVPDs would go for a flat-out ban blackouts. From a broadcasters’ perspective, this is the worst. How can they possibly negotiate if the MVPDs face no consequences for failing to reach an agreement? The MVPDs could drag out negotiations ad inifinitum. It’s absurd.

The NAB’s job is clear. They have to kill STELAR. The satellite distant- signal license at its heart is a vestige of a time when the satellite operators did not offer local signals in any markets and millions of homes had to go without broadcasts signals of any kind because they were beyond the reach of cable systems and OTA signals. Today, only 12 small markets are without the ability to receive local broadcast signals via satellite.

Failing to kill STELAR, the NAB has to keep it clean, unsullied by any anti-retrans provisions.

And one other thing: If there is to be another STELAR, it should be permanent. No more expiration dates that give the MVPDs a shot every five years at undermining retrans and sending broadcasting into a fatal tail spin.

If we are going to do this, every broadcaster should tell every congressperson they know, let’s do it once more and be done with it.