The FCC chairman proposes to eliminate the network non-dupe and syndicated exclusivity rules and to launch a review of the "good faith" provision of the retrans rules — moves that could weaken broadcasters' leverage in retrans negotiations.
Wheeler Moves Imperil Station Retrans Rights
In moves that could undermine broadcasters’ ability to negotiate retransmission consent fees, FCC Chairman Tom Wheeler today proposed to eliminate the agency’s network non-duplication and syndicated exclusivity rules and to review the requirement that parties in retrans negotiations act in “good faith.”
The proposals were circulated for a vote among the other four commissioners.
Wheeler explained the moves on the official FCC blog. The exclusivity rules prevent cable and satellite operators “from providing subscribers an out-of-market broadcast station, for example, when a retransmission consent dispute results in a local station being dropped from carriage.
“In this item, the commission takes its thumb off the scales and leaves the scope of such exclusivity to be decided by the parties…. In so doing, the commission would take 50-year-old rules off our books that have been rendered unnecessary by today’s marketplace.”
Broadcasters have long opposed tampering with the rules. By helping to preserve their local exclusivity to network and syndication programming, they say, the rules strengthen their hand in retrans dealings.
In a statement, NAB EVP Dennis Wharton called them a “lynchpin of the local broadcast business.”
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Their elimination would “threaten the vibrancy of our uniquely free and local broadcast system,” he said. “It is curious that the FCC keeps relying on the rationale that it is taking such pro pay-TV actions because the rules are decades old, but refuses to even review or remove broadcast ownership rules that were imposed under market circumstances that clearly no longer exist.”
The review of the “good faith” requirement was mandated by Congress, Wheeler said, noting that some retrans negotiations have led to “stand-offs and temporary blackouts for pay TV customers.”
“The proposed review undertakes a robust examination of practices used by parties in retransmission consent negotiations…. The goal … is to ensure that these negotiations are conducted fairly and in a way that protects consumers,” he added.
Comments (11)
Michael Lam says:
August 12, 2015 at 4:36 pm
What a destructive decision. It shifts vast power to MSO’s, ATT & Dish at a time of unprecedented consolidation. If a CBS affiliate doesn’t cave to a low-ball offer, they can be replaced by any other CBS affiliate… This could destroy a major part of TV localism. Probably part of the intention is to push more broadcasters to give up and release their spectrum to the telco’s who call the shots for Wheeler. I hope the other commissioners see this cynical turn and block it. NAB needs major help.
Wagner Pereira says:
August 13, 2015 at 1:34 am
Read Sammy’s comment below. He gets it. This is not an issue.
Greg Oliver says:
August 12, 2015 at 4:46 pm
Right to gouge?
Wagner Pereira says:
August 13, 2015 at 1:36 am
Now that Paul Maxwell’s Cable Newsletter went out of business as no one would subscribe to it, he still does not get that things changed….and payment from someone is needed if one wants the content. Funny that he calls it gouging, when the ~$1.35 a month from the Network local channels for 35% of an MVPD Viewing is the best deal per viewer percentage of any cable channel. Some gouging!
Liz Sidoti and Bob Lewis says:
August 12, 2015 at 5:21 pm
Do I smell a lawsuit in the offing or huge pressure on Congress to stop Czar Wheeler from continuing his vendetta against broadcasters? He certainly is earning his pension from NCTA. What a biased, rabid attack dog.
Ellen Samrock says:
August 12, 2015 at 9:29 pm
Pension, stock options, you name it. Genachowski was an annoying little Obama Chihuahua. But Wheeler is a hungry Rottweiler with an agenda and full access to the hen house. He won’t stop until all of broadcast television is brought to its knees through massive regulation. Even being hit with a rolled up newspaper by Greg Walden and the House Subcommittee has deterred him. And his song & dance about doing all of this to “protect consumers” is pure dog droppings.
Ellen Samrock says:
August 12, 2015 at 9:33 pm
It should read…”hasn’t deterred him.”
Manuel Morales says:
August 12, 2015 at 6:20 pm
Syndex and Non-Dup can be handled contractually and already are in many cases (see FOX affiliation agreements). Not an issue at all.
Wagner Pereira says:
August 13, 2015 at 1:33 am
You get it, unlike others.
Jayson Siler says:
August 12, 2015 at 8:05 pm
Cord cutting is going to slow this gravy train down anyway. The MSO business model is under serious fire, and broadcasters will be squeezed harder by both the MSO’s as well as the stations’ respective networks. The assumption that consumers would continue to fork over more and more money to the MSO’s was simply wrong. Now we will get to see the consequences for all affected parties.
Jeff Groves says:
August 13, 2015 at 7:47 am
I second you TownCrier.
With each and every passing year more and more consumers are getting fed up with the fallout that results from these “retransmission” battles (That’s blackouts and higher subscription fees for those of you in Rio Linda!), and are voting with both their eyeballs and their wallets (That’s cutting the cord and seeking their entertainment and informational needs from other sources for those of you in Rio Linda!). Not only are there other sources for viewers to partake in, but these options are considerably CHEAPER than pay-TV. Pay-TV is in a death spiral. Confronted with fewer viewers and a decline in subscribers, what are the networks and pay-TV services doing about this? They’re doing the one thing that’s causing the decline, RAISING prices and adding MORE commercials. SUICIDE!