NAB Urges FCC To Reject Retrans Reforms

NAB today urged the FCC to not to make any changes to the rules governing retransmission consent negotiations between TV stations and multichannel video programming distributors (MVPDs), arguing that they are unnecessary and could prove harmful to broadcasters.

“Remarkably,” the NAB said, the FCC has proposed changes to the retrans regime that “favor pay TV operators while virtually ignoring this new video world order. In today’s competitive marketplace,” the NAB said, “broadcasters have every incentive to come to the bargaining table and negotiate in good faith for carriage. Indeed, securing carriage on MVPDs that reach most viewers in the country is essential to stations’ survival.”

Any leverage broadcasters may have in these negotiations, NAB continued, “does not result from market power, but rather from their continuing investments in high-quality content that consumers want to watch and that MVPDs want to use for their own commercial purposes.

“The FCC must encourage such investment in programming, rather than depress it by adopting rules that prevent content creators — specially just one subset of them — from recouping the full value of their investments.”

NAB’s comments continued: “Pay TV providers now have an unprecedented number of options for programming content beyond broadcast channels to offer their subscribers. These MVPDs — which have market capitalizations as much as 200 times larger than the market caps of even some of the biggest local broadcast TV companies — possess significant leverage over most broadcasters in retransmission consent negotiations.”

The pay TV industry’s goal, NAB claims, is not to level the retransmission consent playing field, but rather “to tilt it more in MVPDs’ favor and, ultimately, to enhance their bottom lines. Most of the pro-pay TV proposals offered in the notice have little or nothing to do with good faith negotiating. Instead, they are designed to tie broadcasters’ bargaining hands.

“For example, pay TV companies want the government to go well beyond antitrust law requirements and forbid practices in which they themselves engage in other contexts, to prevent broadcasters from negotiating retransmission agreement s that include the carriage of programming beyond just a single over-the-air channel.

“Apart from the fact that MVPDs are loathe in every other context for the commission to conduct reviews beyond the strictures of antitrust law, this proposal says nothing about whether broadcasters make bona fide offers and engage in timely negotiations — in other words, it has nothing to do with the essence of good faith.”

Finally, NAB said, “and perhaps most importantly, there is no evidence that the pay TV proposals reflected in the notice would, if adopted, actually promote the only stated goal of both Congress and the commission —to reduce the already limited number of service disruptions that result from failed negotiations.

“This is unsurprising — after all, the pay TV operators’ goal in this proceeding is to increase their leverage in retransmission consent negotiations and pay broadcasters less, not to benefit consumers. Indeed, the proposals may lead to additional impasses by limiting arbitrarily the range and type of options that broadcasters may raise during negotiations.”

In addition to the above objections, NAB said, the FCC lacks authority to draft rules that Congress expressly declined to approve when it renewed satellite TV legislation last year.

At press time, NCTA and the American Cable Association had not yet filed their comments.