Key Lawmakers Fret About Retrans Blackouts

Several federal lawmakers on Tuesday made clear — once again — that they are not happy about consumers losing access to broadcast signals during retransmission consent blackouts.

But no clear consensus emerged during a House judiciary subcommittee hearing on what should be done about the blackouts.

“Our constituents aren’t shy about telling us to do something about problems in the marketplace that deprive them of their favorite shows,” said Rep. Howard Coble (R-N.C.), chairman of the House judiciary subcommittee.

“If it [a blackout] occurs at all, it’s a difficult challenge for many of us who deal with our constituents,” added Rep. Sheila Jackson Lee (D-Texas).

At issue before the subcommittee is whether Congress should reauthorize the Satellite Television Extension and Localism Act, which give satellite TV operators copyright clearance to retransmit distant broadcast signals. The current authorization expires at the end of 2014.

But satellite and cable operators also see the measure as a potential vehicle for watering down the retransmission consent rights of broadcasters.

During the hearing, the operators, as expected, urged lawmakers to revise the retrans law to import distant network signals during retransmission consent stalemates.

In addition, lawmakers were urged to consider a “standstill” arrangement that would let cable operators continue to carry a broadcaster’s programming — under the terms of the elapsed agreement — during retrans consent negotiations.

Under this reform plan, the terms of the new deal would be applied retroactively, with the negotiations ultimately subject to binding arbitration when necessary.

While expressing concern for viewers during the hearing, Coble, who as the subcommittee’s chair will have considerable say about what reforms might be receive serious subcommittee consideration, was careful not to endorse any of the reform proposals.

“As we begin this review of the satellite licenses, one of our goals will be to find solutions to situations where the laws tend to benefit one party over the other,” Coble said.

“Throughout this discussion, our top priority will be to protect the interests of consumers,” he said. “When there’s a dispute and it results in a blackout, consumers are left with no recourse.”

Lee also suggested that Congress may have to step in without specifying how.

“The customers will be calling the satellite company or the cable company and they will not be calling the entity that has the content, and we have to find a balance for that because there are concerns that this will be a growing problem,” she said.

Also during the hearing, Rep. Cedric Richmond (D-La.) warned that lawmakers would be particularly concerned about blackouts during weather disasters and other local emergencies.  “As we mark the anniversary of 9/11, I believe that we all agree that viewers should not be deprived of local information during emergencies, regardless of how negotiations are proceeding.”

During the hearing, Gerard Waldron, a communications attorney testifying on behalf of the National Association of Broadcasters, accused Time Warner Cable, Dish Network and DirecTV — companies that he said  had been involved in 89% of recent retransmission consent “service disruptions — were intentionally using blackouts as a lobbying strategy.

“We see this frankly as a manufactured crisis,” Waldron said. “They are deliberately going and playing a game, and frankly in order to get this committee to pay attention to these issues. We actually think in the vast majority of cases, the system is working.”

A representative for Dish challenged Waldron’s suggestion of a conspiracy. R. Stanton Dodge, Dish EVP-general counsel, said that it was not surprising that Dish, DirecTV and Time Warner Cable have been involved in many of the recent blackouts, because they represent 50% of the marketplace for pay TV.

“So in many ways, Dish, DirecTV and time Warner are the only folks who are able to negotiate effectively with the broadcasters, and thank goodness we’re out there fighting for consumers and lower prices,” he said.

“We, of course, take the view that 100% of the blackouts are caused by four companies — ABC, NBC, CBS and Fox and their affiliates.”

Some of the same issues are expected to be addressed tomorrow during a hearing before the House communications subcommittee, where the ranking Democrat — Rep. Anna Eshoo (D-Calif.) — has introduced draft legislation that would authorize the FCC to “grant interim carriage of a television broadcast station during a retransmission consent negotiation,” according to a press release issued by the congresswoman’s office.

The legislation, opposed by NAB, also would prohibit a TV station “engaged in a retransmission consent negotiation from making their owned or affiliated cable programming a condition for receiving broadcast programming.” In addition, the legislation, opposed by NAB, would allow consumers to buy cable TV service without subscribing to retransmission consent TV stations.