FCC’s Lake: Time For Exclusivity Rules To Go

It doesn’t appear that the broadcasters are getting too far in their campaign to convince FCC Chairman Tom Wheeler to not eliminate the syndicated exclusivity and network non-duplication rules.

Without the rules, broadcasters fear that cable operators will have an easier time importing distant broadcast signals into markets, which would give them a much stronger hand in retransmission consent negotiations.

In a blog post today, FCC Media Bureau Chief Bill Lake reaffirmed the agency’s intention to do away with the rules.

Lake rejected broadcasters’ assertion that the rules are “inextricably linked” to the compulsory copyright license and that, if the rules go, cable and satellite operators will be given “a free ride” to carry broadcast signals without paying for them.

“The asserted inextricable link does not exist — nor does the imagined free ride,” Lake writes. “These advocates ignore major pieces of the intervening history – notably the creation of the retransmission consent regime in the 1992 Cable Act.

“Under our current retransmission consent regime, a distant station must give its consent before its signal may be imported into another station’s local market.  And, in practice, network affiliation and syndication agreements typically prohibit broadcast stations from granting MVPDs retransmission consent for out-of-market carriage of their signals. 

“Networks, syndicators, and broadcast stations that choose to create exclusive distribution rights may effectively safeguard those rights through privately negotiated affiliation and syndication agreements.  They will continue to have this right in the absence of our exclusivity rules.

“It is thus wrong to suggest that, in the absence of the exclusivity rules, the compulsory copyright licenses would allow MVPDs to abrogate exclusive licenses negotiated by broadcasters in the marketplace.

“Nor would MVPDs get a free ride to carry copyrighted material without paying.  MVPDs today pay fees to broadcasters for the right to retransmit their signals, and when networks, syndicators, or content creators license their content to broadcast stations they understand that the content carried on the broadcast signal will be retransmitted by MVPDs, consistent with the agreed-on territorial restrictions.  The transactions necessarily reflect that understanding. 

“The fact that an MVPD pays to retransmit the ‘signal’ of a station does not hide the fact that the payment is the key that unlocks the right to retransmit the content carried on the signal and that the content providers have been paid for inclusion of their programming.”

NAB spokesman Dennis Wharton said Wheeler is on a “singular crusade” to eliminate the rules despite the harm it will do to local broadcasting. “Neither he nor…Lake has identified any consumer benefit to eliminating the rules. And just last year Congress included broadcast exclusivity protections in the DBS context in satellite TV legislation

“We’re hopeful other FCC members will reject this government giveaway to Big Cable.”