FCC Votes To Spike Its Sports Blackout Rule

In a swipe at broadcasters, the FCC voted 5-0 today to eliminate the sports blackout rule — a regulation that has barred cable and satellite TV operations from airing sports events that have been blacked out on a local TV station.

The vote puts the kibosh on agency protection of the NFL’s blackout policy, which has long required TV stations to black out games when a team fails to fill the local stadium.

During a meeting today, the FCC played the vote as a pro-fan, pro-good-government initiative.

“It’s a simple fact: The federal government should not be party to sports teams keeping their fans from viewing the games, period,” said FCC Chairman Tom Wheeler.

But key communications attorneys said that the vote could be seen as yet another step in an agency effort to undermine broadcast programming exclusivity — a linchpin of the broadcast industry’s retransmission consent rights.

In an earlier swat at broadcasting’s retrans negotiating leverage, the FCC voted in March to bar two or more separately owned Top 4 broadcasters in the same market from negotiating retransmission consent deals together.

The FCC has also sought comment on whether to eliminate two agency rules that make it easier for broadcasters to protect the exclusivity of their syndicated and network programming.

Like the sports blackout rule, the syndicated exclusivity and network nonduplication rules effectively bar pay TV operators from importing broadcasting signals into a market with the same programming as local stations.

Without the rules, broadcasters would still be able to protect the exclusivity of their programming, but would have to rely on the courts, instead of the FCC to enforce the protections, adding to the hassle and expense for broadcasters.

“It’s just one more nick in the [broadcasting industry’s] armor,” said one communications attorney, of the FCC’s vote to ax the sports blackout rule.

“It’s increasing the leverage that cable has in retransmission consent to try to bring in out-of-market signals,” added another communications attorney, who asked not to be identified.

The National Cable & Telecommunications Association said in a statement: “We commend the commission’s unanimous decision to eliminate the antiquated sports blackout rule. As the video marketplace continues to evolve and offers consumers more competition and a growing variety of new services, we encourage the FCC to continue its examination of outdated rules that no longer make sense.”

In its order, the FCC said the agency’s blackout rule, which was originally adopted almost 40 years ago, is no longer justified.

When the reg originally went into place, ticket sales were the primary source of revenue for the NFL, and most NFL games failed to sell out, the FCC said. Today, TV revenues have replaced ticket sales as the NFL’s main revenue source, generating about $6 billion a year for the league, the FCC said. The FCC also said that blackouts have become increasingly rare, with only two NFL games blacked out during the last season.

The FCC order also said that the agency’s action was “unlikely” to spur the NFL to move its games from broadcast to pay TV.

“I hope the NFL will seize on this opportunity to repudiate blackouts,” said Wheeler, a Democrat, during the FCC’s meeting.

Added FCC Commissioner Ajit Pai, a Republican: For my part, I hope that the NFL will not respond to today’s vote by digging in its heels. Instead, it should view this decision as an opportunity to revisit the blackout policy … and to adopt a more fan-friendly approach.”