Big Retrans Win For Broadcasters

FCC Chairman Tom Wheeler has decided that the current “good faith” retransmission consent rules are good enough.

In a blog post today, Wheeler noted that in the STELA Reauthorization Act of 2014, “Congress expressed concern about the harm consumers suffer when negotiations fail and sought-after broadcast programming is blacked out on their pay TV service. STELAR directed the commission to initiate a rulemaking to consider possible revisions to our ‘totality of the circumstances’ test.”

Wheeler said that the review of all the procedures showed that “more rules in this area are not what we need at this point. So, today I announce that we will not proceed at this time to adopt additional rules governing good faith negotiations for retransmission consent.”

However, he added: “this does not mean the FCC will turn a blind eye to disputes. Nor does it mean that Congress couldn’t expand the scope of the commission’s authority in this space.”

Wheeler continued: “There is nothing in the record that suggests that our current totality of the circumstances test, which is intentionally broad, is inadequate to address the negotiating practices of broadcast stations or MVPDs in the marketplace today. Though commenters complained about a variety of negotiating practices, none showed that those practices are the causes of the blackouts that occur. Further, a number of the practices complained of were said to have been engaged in by a single negotiating party or in a small number of negotiations and do not appear to be gaining currency in the marketplace.”

What we need, Wheeler added, “is not more rules, but for both sides in retransmission consent negotiations to take seriously their responsibility to consumers, who expect to watch their preferred broadcast programming without interruption and to receive the subscription TV service for which they pay.

“This isn’t pie in the sky. Many broadcasters and MVPDs take that responsibility seriously and conclude hundreds of retransmission consent deals without interruption. And this process is entirely invisible to their viewers — as it should be.

Wells Fargo analyst Marci Ryvicker was encouraged by the news: “We view this as a positive for the broadcasters and the diversified O&O (owned and operated) stations. While we understand the FCC is still going to watch retrans negotiations carefully, we do think today’s statements remove some uncertainty for these stocks.”

And NAB EVP of Communications Dennis Wharton said: “NAB appreciates the significant work undertaken by Chairman Wheeler and the FCC staff to conduct an exhaustive review of the retransmission consent process, and applauds its conclusion that no new rules are needed. As Chairman Wheeler acknowledges, the vast majority of these negotiations are successfully concluded without incident or impasse. Broadcasters remain fully committed to reaching agreements with pay TV companies in good faith so that consumers can continue to receive our high-quality local content whether over the air or through a pay TV service.”

American Cable Association CEO Matthew M. Polka said: “ACA is shocked and appalled that FCC Chairman Tom Wheeler, who has placed such urgency in reducing consumer confusion in the marketplace, has decided to leave unchanged the retransmission consent regime that a bipartisan Congress asked the agency to review in the Satellite Television Extension and Localism Act Reauthorization Act of 2014. To do so in the face of historic numbers of broadcast blackouts and clear signs of market failure and widespread consumer harm is stunning. The chairman’s decision ignores the plight of millions of consumers served by MVPDs who have repeatedly been victimized by broadcasters’ heavy-handed bargaining tactics, such as pulling signals prior to a marquee event like the Oscars or baseball’s All-Star game.

“In the end,” Polka continue, “the chairman’s decision will serve no purpose other than to perpetuate and most likely escalate negotiating schemes that will result in consumer harm on a colossal scale by ignoring tangible evidence that the retransmission consent regime is broken, outdated, and contributing to the skyrocketing increase in retransmission consent payments and a record number of TV-station initiated signal blackouts.”