ACA: Retrans ‘Good Faith’ Needs Overhaul

The cable trade group tells the FCC that in the nearly five years since the commission began looking to reform its retransmission consent rules, “two retransmission consent election cycles have come and gone, consumers have experienced 558 blackouts, prices have risen about 40% each year and demands for carriage of other and often unwanted programming have increased. The time for decisive and muscular commission action has arrived.”

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. 

Comments (11)

Leave a Reply

Kristjan Magnusson says:

December 2, 2015 at 9:28 am

Let me get this straight…. I have a product (TV station) that I license to you (cable company) because I think it might help both of us. Over time, you build your business on the strength of MY product, then use the profits of reselling MY product in order to take away my best product offerings (Mon Night Football, March Madness, college bowl games, local sports rights, etc.). I finally wise up, decide that I should charge fair market value for my product, and then you cry foul to the government? It’s called free enterprise. Just as you used MY product to build big profits, I have the right to charge what I deem as a fair value for MY product. If you don’t like the rate, you don’t have to buy it from me.

    kendra campbell says:

    December 2, 2015 at 9:53 am

    1) Your product has a FCC license attached that gives you the right to broadcast a “free” OTA signal to the entire DMA. 2) Your product allows you to generate significant revenue via a commercial glut that grossly exceeds industry standards twenty years ago. 3) You have the right to negotiate retrans. $ in good faith. That requires realistic expectations and compromise.

    Ellen Samrock says:

    December 2, 2015 at 1:15 pm

    A2Ztv–that is the most clear-eyed assessment of the retrans issue I’ve ever read. Bravo. The ACA and its supporters are either out to lunch or patently dishonest or both. Just because broadcasters send out a terrestrial signal free to end users, doesn’t give those end users the right to make money off of it without compensation. That is a copyright violation. Then we have those sob sisters who insist they can do what they want to a television signal because, after all, broadcasters get to use the public airwaves for free. That too is total nonsense. Every year the FCC assesses regulatory fees to ALL television broadcasters that can run into tens of thousands of dollars per station–whether the station makes money or not. On top of that the FCC assesses a yearly supplemental usage fee to any station that broadcasts anything other than a video signal. So the pennies per subscriber cable companies shell out to broadcast television is a bargain when you consider the value they and their subscribers get in return. Despite the whining from the ACA, the system works. Of course, when you have the most corrupt FCC ever with a chairman who is securely in the back pocket of cable companies (and wireless providers) expect the status quo to change and not a change that will favor broadcasters.

    Veronica Serrano Padilla says:

    December 2, 2015 at 1:36 pm

    A2Ztv is correct on many points (aside from the statement about taking away the best products – the networks themselves prostituted themselves out for cable willingly in that regard). But the ACA has points about what it sees as violations of good faith negotiations (whether real or imagined). That’s because the FCC has inserted itself into this “free market” process. If the FCC requires good faith negotiations, then what qualifies as good faith negotiations needs to be well defined. If it were truly a “free market” situation, the FCC would be hands off, much the way it works with cable networks and how they negotiate with MVPDs.

laureen moncrief says:

December 2, 2015 at 3:52 pm

From Broadcasting & Cable today.

“The Big Four affiliate associations have told the FCC to keep its hands off its “totality of circumstances” test….Broadcast retrans payments are only 12.5% of the projected $50.2 billion MVPDS will pay for programming in 2015, they said, while broadcast TV represents a 35% share of total day audience. “The indisputable fact is that local stations are not, as MVPDs would have the Commission believe, charging MVPDs anywhere close to fair market value for the privilege of reselling local broadcast station signals at a profit,” they said.”

    Veronica Serrano Padilla says:

    December 2, 2015 at 5:43 pm

    MVPDs would likely pay broadcasters compensation based on audience share if that applied to all the other cable channels which broadcasters own. But then, ESPN wouldn’t be getting nearly $5 per subscriber per month under that particular scheme. Broadcasters (as always) want to have their cake and eat it too.

Tim Darnell says:

December 2, 2015 at 7:06 pm

Part of the problem is that MVPDs overpaid for cable channels in bundles and underpaid for broadcast signals. In the past several years the broadcast channels have jumped dramatically to try and reach equilibrium, but still has a ways to go. I sympathize for the MVPDs somewhat because this rebalancing caught they by surprise and they are likely having a difficult time trying to reduce the payments for cable channels and bundles to try and counter-balance the increasing fees on the broadcast side. I am sympathetic about some of their complaints, but they employ potentially unfair pressures upon broadcasters too, especially small ones. It is all about leverage. Is it the absence of good faith to use it?

Manuel Morales says:

December 2, 2015 at 9:47 pm

Clear misunderstand of what constitutes “good faith” by both the cable folks and the posters here. Good never has and never should be in any way, shape or form related to price/sub.

Keith ONeal says:

December 2, 2015 at 10:50 pm

To tell the truth, Congress needs to repeal the outdated Cable Satellite Act of 1992 (which introduced retransmission consent) and replace it with a new law more consistent with the current technologies.

    Manuel Morales says:

    December 2, 2015 at 11:42 pm

    No law needed. This can all be handled by contract without the artifical interference high broadcasters and the cable guys crave. I often wonder if both sides crave this interference because their trade/lobby groups have convinced they need it. says:

July 7, 2018 at 11:09 pm

I couldn’t refrain from commenting. Perfectly written!