Wheeler Backs Off On Exclusivity Rules

Bowing to the will of federal lawmakers, FCC Chairman Tom Wheeler has put a controversial proposal to eliminate the network non-duplication and syndicated exclusivity rules on indefinite hold, an agency source close to the issue said.

At deadline, Wheeler had no comment on the turnabout.

But the FCC source said the move responded to congressional requests to work together with the agency on the issue.

Wheeler’s proposal to eliminate the regs, which he originally circulated for a private vote at the agency in August, now appeared to be in danger of completely derailing.

The net nonduplication and syndicated exclusivity rules make it easier for broadcast TV networks and stations to protect the exclusivity of programming in local TV markets. The regs have the staunch support of the National Association of Broadcasters, but are opposed by many cable operators.

The NAB is concerned that elimination of the rules would undermine broadcasters in retransmission consent negotiation by making it easier for cable operators to import distant broadcast signals with similar programming.

Wheeler, a former lobbyist for the cable industry, said he wanted to ax the regs, arguing in part that the broadcast industry could — and — should enforce program exclusivity arrangements on its own, without the agency’s intervention.

But leading lawmakers told the FCC that they wanted the agency to put Wheeler’s proposal on hold, because the lawmakers believe that the regs should not be changed without Congress considering possible revisions of the federal compulsory copyright license at the same time.

“We feel it would be premature for the FCC to repeal the exclusivity rules while the current compulsory copyright license remains unchanged,” a bipartisan coalition of Senate leaders — Senate Judiciary Committee Chairman Charles Grassley (D-Iowa) and Sen. Patrick Leahy (D-Vt.), the committee’s ranking minority member; and Senate Commerce Committee Chairman John Thune (R-S.D.) and Bill Nelson (R-Fla.), the committee’s ranking minority member — said in an Oct. 9 letter to Wheeler.

The lawmakers’ letter came in response to Wheeler’s Aug. 12 announcement that he was proposing to ax the net non-dupe and syndex regulations behind the scenes on “circulation,” a procedure that allows the FCC commissioners to vote on items privately outside of a public meeting. Other lawmakers who have come out publicly in opposition to Wheeler’s proposal include Sen. Dianne Feinstein (D-Calif.) and Sen. Chuck Schumer (D-N.Y.), along with several representatives of the Congressional Black Caucus.

Back in August, Wheeler was insisting that the non-dupe and syndex rules should be thrown out because they prevented cable companies from providing subscribers access to out-of-market broadcast TV signals during retransmission consent disputes that sometimes result in local stations being dropped from carriage, an argument favored by many cable operators.

“In this item, the commission takes its thumb off the scales and leaves the scope of such exclusivity to be decided by the parties,” Wheeler said in an Aug. 12 blog on the FCC’s website.

But an FCC source close to the issue told TVNewsCheck that as of today — almost three months after Wheeler first circulated the proposal to kill the regs — none of the agency’s four other commissioners — two Democrats and two Republicans — had voted on Wheeler’s proposal.

“The fact that nobody has voted yet is not a good sign,” the FCC source said.

One FCC source said that Wheeler could always try to force a public vote on the proposal by putting it on the agenda for one of the agency’s regular public meetings.

But it’s unclear where he would get the third vote he needs for a majority, because the agency’s two Republicans — Ajit Pai and Michael O’Rielly — have signaled that they are at best ambivalent about the proposal while Mignon Clyburn, one of Wheeler’s fellow Democrats, has publicly avowed her support for the rules.

“I look forward to a full record on this issue, but believe in upholding the rule because it promotes competition and localism,” she said of the non-dupe and syndex regs, in a public statement on March 31, 2014.

Broadcasters have argued that without the rules, it could be far more expensive and difficult for broadcasters to try to enforce exclusivity arrangements outside the FCC in the courts.

NAB also has warned that, without the rules, larger stations might try to expand their exclusivity footprints at the expense of smaller stations in their regions.

On still another tack, NAB says cable’s existing compulsory license clears the way for cable to retransmit TV signals at rock-bottom low pricing.

“Government should not, on one hand, make it incredibly convenient and inexpensive for cable to import distant signals while, on the other hand, make it more difficult for broadcasters to find a way to enforce their market-negotiated exclusive rights,” NAB said, in a July presentation at the FCC.