Two New Bills Wage War Against Retrans

Lawmakers Thursday introduced two pieces of legislations that would shake up the law governing the relationship between broadcasters and cable and satellite operators. One would water down broadcasters’ retransmisson consent rights; the other would eliminate them altogether.

Neither is seen as having much chance of becoming law, but they provide an indication of how some lawmakers are thinking, and some elements could survive in other, more viable, legislation.

From Rep. Steve Scalise (R.-La.) and Sen. Jim DeMint (R-S.C.) comes the Next Generation Television Marketplace Act, the more radical of the two measures. It would repeal the compulsory copyright license, must carry, retransmission consent and the broadcast ownership rules.

“Over the last several decades, communications and entertainment technology has become more advanced, while the laws governing the industry have remained relatively unchanged,” Scalise said. “Together, decades-old cable and satellite ‘compulsory copyright’ licenses and ‘retransmission consent’ regulations currently influence many aspects of the broadcast programming consumers watch on TV. The government should not be in the business of picking winners and losers, and the Next Generation Television Marketplace Act ensures that by removing the heavy-hand of government, the market is free to operate in a way that continues to benefit consumers and encourage innovation.”

The second bill, introduced by Reps. Anna G. Eshoo (D-Calif.) and Zoe Lofgren (D-Calif.), strikes at the heart of retransmission consent.

The Video CHOICE (Consumers Have Options in Choosing Entertainment) Act would “eliminate broadcast television blackouts and give consumers greater flexibility to choose the channels they receive each month from their cable, satellite or other pay TV provider,” the sponsors said.

“During the three months since I released draft legislation — the message from individuals, communications companies and consumer groups has been abundantly clear: our video laws are in need of reform,” Eshoo said in a statement. “My bill would put an end to broadcast television blackouts and ensure consumers aren’t held hostage by a dispute they have no control over. Recurring TV blackouts coupled with the rising cost of broadcast television programming has left consumers frustrated and looking to Congress and the FCC for answers.”

“Internet users and television customers should not be held hostage when business negotiation disputes arise between cable and content providers,” said Lofgren. “It’s unfair to subject consumers to service blackouts or blocked online content. This bill offers the basic consumer protections and choices they should receive in television and online services.”

The Video CHOICE Act has five key provisions:

• Preventing Broadcast Television Blackouts — Gives the FCC explicit statutory authority to grant interim carriage of a television station during a retransmission consent negotiation impasse.

• Ensuring Consumer Choice in Cable Programming — Ensures that a consumer can purchase cable television service without subscribing to the broadcast stations electing retransmission consent.

• Wholesale Unbundling of Broadcast Stations in Retransmission Consent Negotiations — Prohibits a television station engaged in a retransmission consent negotiation from making their owned or affiliated cable programming a condition for receiving broadcast programming.

• Examination into the Blocking of a Broadcast Station’s Owned or Affiliated Online Content During Retransmission Consent Negotiations — Instructs the FCC to examine whether the blocking of a television station’s owned or affiliated online content during a retransmission consent negotiation constitutes a failure to negotiate in “good faith.”

• FCC Study of Sports Programming Costs — Calls for an FCC study of programming costs for regional and national sports networks in the top 20 regional sports markets.

Reacting to the bills, NCTA President Michael Powell released a statement that suggests that the NCTA might finally be entering the fray to reduce broadcasters’ retrans clout. To date, it has been sitting out the battle because of large presence of Comcast on its board. Comcast is owner of NBC and the NBC O&Os, among the beneficiaries of retrans.

“The bills introduced today by Reps. Eshoo and Scalise are very different, but each independently highlights what is quickly becoming a growing consensus — namely, that laws enacted over 20 years ago are out of sync with the realities of today’s video marketplace and in many cases serve to inhibit innovation, thwart fair competition, and harm consumers,” Powell said. “In particular, we welcome an examination of a retransmission consent regime that is increasingly fractured and in need of some repair.  We look forward to working with these members, and all members of the committee, as Congress considers responsible reforms.”

NAB President Gordon Smith said broadcasters oppose both bills. “We find it sad that pay TV companies who built their broadband, voice and video businesses on the backs of local TV signals now balk at the notion of paying a fair market rate for the most-watched programming on television…. We will constructively engage with policymakers seeking to improve upon a retransmission consent law that is now working over 99% of the time.”