The chairman tells Senate members who oppose his plan to drop the FCC’s network nonduplication and syndicated exclusivity rules that the rules are unnecessary and may actually hinder “the market from operating in a fair and efficient manner” and could aggravate “the harm to consumers during retransmission consent disputes.”
Wheeler: FCC’s Exclusivity Rules ‘Redundant’
FCC Chairman Tom Wheeler on Tuesday wrote to the chairmen and ranking members of the Senate Commerce and Judiciary Committees and Sen. Chuck Schumer (D-N.Y.) dismissing concerns they had expressed to Wheeler in October about the chairman’s proposal to eliminate the FCC’s network nonduplication and syndicated exclusivity rules.
Wheeler’s letters to Schumer, Charles Grassley, Patrick Leahy and John Thune said: “An elimination of the exclusivity rules is unlikely to have an immediate effect on programmers, broadcasters, cable companies or consumers. This is because … current broadcast program contracts and network affiliation agreements normally contain their own exclusivity provisions prohibiting a program from being imported into a market if it is being shown on a local broadcast station. In these circumstances, retaining the exclusivity provisions may well be redundant and a federal intrusion, without cause, into the marketplace.”
Wheeler continued: “Faith in the free market would suggest that government get out of the way, absent an indication of harm. Since the rules appear redundant to existing contractual provisions … their elimination would not be the trigger for such harm. However, the presence of the exclusivity rules prohibits the market from operating in a fair and efficient manner and aggravates the harm to consumers during retransmission consent disputes.
“Simply put, there is a possibility that the exclusivity rules protect broadcasters from the marketplace by substituting an anti-market government mandate and in the process contribute to high cable and DBS prices.”
NAB Executive VP of Communications Dennis Wharton responded to Wheeler’s letters, saying: “Chairman Wheeler’s dismissive rejection of the concerns raised by key congressional leaders over his proposal to eliminate broadcast exclusivity rules represents a shocking disregard for the institution that confirmed him.
“Exclusive programming rights allow TV stations to serve communities with quality news and entertainment, a point well understood by Chairmen Grassley and Thune, ranking members Leahy and Nelson, Senators Schumer and Feinstein, and six members of the Congressional Black Caucus. Unfortunately, their concerns have been ignored by an FCC chairman who appears to be on a lone crusade against exclusivity,” Wharton concluded.