Wheeler ‘Concerned’ Over Online Blackouts

Broadcasters’ efforts to enhance their retransmission consent leverage by blocking the access of a pay TV company’s subscribers to a broadcaster’s online programming during retrans disputes is “something that is of concern and that we all should worry about,” FCC Chairman Tom Wheeler told federal lawmakers Tuesday.

“I think there is reason to be concerned because I happen to subscribe to an ISP [Internet service provider] in a dispute with a program provider, that the program provider blocks all access from all IP addresses coming from that ISP,” Wheeler said, during a hearing before the House Communications and Technology Subcommittee.

Wheeler did not tell lawmakers during the hearing what retrans blackouts had specifically raised his concerns, or what in particular he planned to do about it.

But after the hearing, a pay TV industry spokesman applauded Wheeler’s sentiments.

“We believe that it is a concern when content owners block consumers’ access to their websites to retaliate against those consumers’ cable operators with which they have not concluded new retransmission consent or cable programming contracts that routinely include exorbitant fee increases,” said Ted Hearn, a spokesman for the American Cable Association.

And it’s not just broadcasters at fault, Hearn added. “For many weeks, Viacom has been blocking the broadband customers of Cable One and Liberty Cablevision of Puerto Rico, both ACA members, after these firms declined to sign for cost reasons new cable programming agreements with Viacom,” he said.

“As part of its retaliatory campaign, Viacom’s online access denial includes a subset of broadband customers, also known as ‘cord cutters,’ who are not even video customers of Cable One or Liberty Cablevision.”

Said Dennis Wharton, a spokesman for the National Association of Broadcasters, broadcasters “are fine” with online distribution of their programming as along as they are properly compensated. “Historically, it has been Time Warner and other cable operators who wanted to restrict network programming only to the cable TV Everywhere model.” 

The pay TV industry has been urging the FCC to crack down on the ability of broadcasters to block pay TV subscriber access to online content during retrans disputes — or even to black out broadcast programming altogether — as violations of their existing legal obligation to negotiate retrans deals in good faith.

TWC complained long and hard after CBS blocked TWC subscribers from accessing CBS online programming late last summer during an highly contentious retransmission negotiation.

TWC was generally seen as having lost that negotiation since CBS managed to extract a big hike in retrans fees while retaining full control over digital rights to its programming. 

On March 31, the Wheeler FCC approved a retrans reform regulation that bars independently owned top four stations in the same market from banding together to negotiate retransmission consent deals.

In another swipe at broadcasters, the Wheeler FCC also recently teed up a further notice of rulemaking seeking comment on whether to eliminate the agency’s network nonduplication and syndicated exclusivity rules, regulations that make it easier for stations to protect the exclusivity of their programming in their markets.

Without the regulations, broadcasters would still be able to protect the exclusivity of their programming, but would have to rely on the courts, instead of the FCC, to enforce the protections, adding to the hassle and the expense for the broadcaster.