New Retrans Attack Targets Multicasting

Broadcasters could be barred from affiliating with two or more of the Big 4 TV networks and multicasting the signals, under a new retransmission consent reform proposal being pitched by the pay-TV industry at the FCC.

In addition, the ability of broadcasters to negotiate retransmission consent rights for unaffiliated stations in separate markets could be constrained, under another retrans reform proposal being promoted by pay-TV lobbyists during recent FCC visits.

“Specifically, we asked the FCC to clarify that a broadcast station’s assignment of its right to negotiate retransmission consent to another broadcast station constitutes a ‘transfer of control’ that requires commission approval,” said representatives of Time Warner Cable, Charter Communications, DirecTV, Dish Network and the American Cable Association, according to a Jan. 30 lobbying disclosure filing on the FCC’s website.

Pay-TV industry lobbyists have long been urging the agency to reform its retrans regulations to bar broadcasters from jointly negotiating retrans deals through sharing agreements between separately owned stations in the same markets—including shared services agreements, or SSAs, and joint sales agreements, or JSAs.

Under one of the new wrinkles in the retrans reform campaign, the pay-TV companies are now urging the FCC to crack down on the ability of broadcasters to offer more than one Big 4 TV network-affiliated signals over their own channels by multicasting, according to the disclosure letter.

“We explained that broadcasters in many local markets are aggregating market power by affiliating with two or more of the ‘Big Four’ networks and then multicasting those signals,” the pay-TV lobbyists said, according to their disclosure document.

“Multicasting enables a single entity to control retransmission consent negotiations and local content production for multiple broadcast signals in the same local market, and thus presents many of the same problems posed by sharing agreements,” the pay-TV lobbyists continued.

“The FCC should make clear that one station affiliating with two or more of the ‘Big Four’ networks and multicasting those two signals is equivalent to owning two stations under the [FCC’s multiple ownership] rule,” the lobbyists added.

In addition, the FCC should crack down on broadcasters who negotiate retransmission consent deals for separately owned TV stations in separate markets, the pay TV lobbyists said. The regulatory change promoted by the reform coalition would require broadcasters to attribute the ownership of all stations they negotiate retransmission consent for, including separately-owned stations outside their own markets.

“Treating joint retransmission consent negotiations as creating an attributable interest should thus apply both to the commission’s local television ownership rule and its national television ownership rule,” the lobbyists said.

The pay-TV industry lobbyists made their pitch to advisers to FCC Commissioners Mignon Clyburn, Michael O’Rielly and Jessica Rosenworcel during meetings at the FCC on Jan. 28 and 29, the disclosure filing said.

“Retransmission consent coordination has always been problematic,” the pay-TV lobbyists said, according to the disclosure. “Now, however, it has become an epidemic.”

The lobbyists said ACA provided studies identifying 48 instances of separately owned Big 4 network-affiliated broadcast stations in the same market using a single negotiator to conduct retransmission consent negotiations.

In addition, DirecTV gave FCC officials a study showing that in 93 markets — almost half of the DMAs in which DirecTV carries local TV signals — DirecTV has to negotiate with a party controlling multiple affiliates of the Big 4 networks, “often through arrangements that circumvent the commission’s ownership rules,” the disclosure document said.

“We thus urged the commission to update its regulations to better reflect market conditions and to protect consumers,” the lobbyists said.

Said Dennis Wharton, a spokesman for the National Association of Broadcasters, in response: “Having Time Warner Cable, Dish and DirecTV complain about consolidation is as credible as having [the Seattle Seahawks’] Richard Sherman elected president of the Society of Mimes. Their goal is simple: to eliminate broadcasting as a free source of news, entertainment and lifesaving weather information available to 100% of all Americans. As more and more homes cut the pay TV cord, we’re hopeful the FCC will reject this cynical pay TV campaign and embrace modest partnerships and revenue streams that allow local broadcasting to thrive.”