Wheeler: FCC’s Exclusivity Rules ‘Redundant’

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.”

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.


Comments (10)

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Don Thompson says:

November 24, 2015 at 6:46 pm

The only time @nabtweets and the TV Cashcasters sniff at the free market is when someone wants to take away their FCC training wheels. Please follow me on Twitter @TedAtACA

Manuel Morales says:

November 24, 2015 at 9:35 pm

Wheeler is correct. These things are handled via contract.

    Kristen Lynch says:

    November 25, 2015 at 10:24 am

    That is true in part. The FCC’s rules only protect exclusivity rights granted in programming or affiliation agreements. What the Chairman ignores is that the FCC rules provide a simple way to enforce those contractual rights. Since the exclusivity rights are negotiated between one station and its programming suppliers, it is difficult for that station to use the courts to enforce a restriction imposed on another station and an MVPD who are violating the first station’s exclusivity rights. The fundamental error the Chairman makes is thinking that the FCC’s rules add something of substance, which they do not (in fact they limit the enforceable rights that can be granted by contract). He is also wrong in stating (as he and others from the FCC have said before) that the enactment of retransmission consent rights in some way superseded the need for exclusivity rules. The 1992 Congress said otherwise and specifically told the FCC not to change the program exclusivity rules.

Andrea Rader says:

November 24, 2015 at 9:37 pm

Wheeler considers all broadcasters redundant, so this is no surprise.

Elaine Scharfenberg says:

November 25, 2015 at 8:58 am

Cable was built on using broadcast signals for free because they were over-the-air. We now know broadcasting is a programming service that offers over the air free to viewers but there is a dollar worth to their service that should be compensated for by cable and dbs just like they do other programming services. What cable doesn’t like is that they don’t hold the trump card in these negotiations. The truth is that without exclusivity the big ownership groups will continue to have plenty of leverage with cable and dbs, but the small operations that predominate everywhere except the east and west coasts will have none.

Maria Black says:

November 25, 2015 at 11:08 am

Exclusivity protects the viewer against having non-local programming due to rampant capitalism. I do not want to watch local news if it isn’t local to me, in fact, no one watching local news wants a different area’s news. So when these big babies fight about how much money to give to the content creators of local stations, it proves that the free market is doing just fine with these regulations. The FCC is there to be the fair voice, and to protect the consumers of these products. So protect us! Keep exclusivity. Of course, I say this on behalf of my parents, who have cable, as I don’t drink the cable kool-aid. OTA all the way!

    Veronica Serrano Padilla says:

    November 25, 2015 at 6:54 pm

    Who needs protecting? The networks aren’t likely to allow (by contract) an MVPD to import distant signals just because an affiliate charges less for retrans. Networks, many of which have O&Os, understand the value of the network-affiliate approach and local news and are not very likely to break the mold. While there’s some logic to keeping the FCC as an arbiter for disputes, this is really Much Ado About Nothing as Mr. Shakespeare would say… The only thing which might help consumers is if MVPDs have the right to temporarily import distant signals if a network goes dark due to retrans discussion disputes.

matt fess says:

November 25, 2015 at 11:28 am

Wheeler was a paid cable lobbyist before he became chairman. Is there a need to even look any deeper? He has been anti-broadcast his adult life and the fact that he was ever appointed to this role is a complete conflict of interest. He never appreciate the role of broadcasting and still does not.

Ellen Samrock says:

November 25, 2015 at 4:10 pm

The NAB complains that Tom Wheeler shows “a shocking disregard of Congress.” Since when is this news? Every time Wheeler appears before the House Energy and Commerce Subcommittee he gets his knuckles rapped by committee members for some act of FCC overreach he’s committed and not respecting the will of Congress. He then goes back to his office and it’s business as usual. On to the next outrageous action. Wheeler has basically opened the door and shown the way for future FCC chairs on how to by-pass Congress. And unless Congress takes action by passing legislation now to reform the FCC and calling for Wheeler’s removal (provided he doesn’t step down in January), control of the agency will be lost for good. This is without doubt the most lawless FCC ever, spawned by the most lawless administration ever.

Don Thompson says:

November 25, 2015 at 6:43 pm

I don’t understand why would someone pay the cable operator for a distant TV signal when the local signals, so rich with local news and community information, are available for free with an antenna?