ACA: Retrans ‘Good Faith’ Needs Overhaul

The American Cable Association trade group is asking the FCC to adopt the commission’s proposed retransmission consent reforms aimed at curbing what ACA calls “the worst negotiating abuses today.”

These reforms, it says in comments to the commission, “would be an important first step toward improving the environment for retransmission consent negotiations and achieving the goals of both Congress and commission that ‘retransmission consent negotiations be conducted in an atmosphere of honesty, purpose and clarity of process.’ ”

The request came in the FCC’s proceeding to determine whether any of its retrans rules need modification. The FCC launched the proceeding earlier this year at the request of Congress.

The NAB and individual station groups have asked the FCC not to make any changes to the rules. While the National Cable & Telecommunications Association has asked the FCC to ban broadcasters from blocking viewers’ access to their programming online to increase their leverage in retrans negotiations.

“Broadcasters’ unreasonable retransmission consent negotiating practices and demands harm consumers by driving video subscription rates higher,” ACA’s said. “Moreover, because they pressure the margins of cable operators’ video distribution businesses and tie up valuable bandwidth, these demands adversely impact the ability of those operators to invest in high-performance broadband infrastructure and offer high-performance broadband service. Put simply, the commission’s good faith rules have been inadequate to create conditions for retransmission consent ‘negotiations to be conducted in an atmosphere of honesty, purpose and clarity of process’ designed to produce ‘an agreement acceptable to both parties.’ “

“Instead, prices for retransmission consent are soaring with no breaks on growth on the horizon, negotiating practices have led to bloated bundles of programming, and negotiating impasses and consumer blackouts are proliferating. In short, the good faith negotiation rules have failed to protect the public interest from harm.”

ACA’s comments outline what it said are the “highly problematic negotiating practices and proposals” identified by the FCC in setting this process in motion, and asks that the commission “recognize that each of these practices or proposals constitute per se violations of the obligation to negotiate in good faith, or at the very least, as evidence of bad faith under the totality of the circumstances test:

• Bundling of broadcast signals with regional sports networks (or other “must have” programming).

• Refusal of a negotiating party to substantiate its bargaining positions.

• A broadcaster’s blocking of access to online broadcast content they have made freely available online (online blackouts) to gain leverage in its negotiations.

• A broadcaster’s blocking of access to a broadcast signal before or during “marquee events” to gain leverage in its negotiations.

• Third-party interference in retransmission consent negotiations for historically-carried out-of-market stations.

• Demands for carriage of after-acquired broadcast stations or un-launched cable programming networks.

• Discriminatory offers by MVPD- affiliated broadcasters based on vertical effects.”

ACA concluded by saying that adoption of its proposed reforms will improve the environment for retransmission consent negotiations, lessen the likelihood of negotiating impasses, consumer blackouts — both linear and online — and increase the likelihood of retransmission consent fees set at fair market value, and on reasonable terms and conditions that are acceptable to broadcasters and MVPDs alike.