Broadcasters request fair FCC review of retransmission consent


MVPDs have been complaining that the retransmission consent system is broken, and have been asking both Congress and the FCC to tilt the field their way. Broadcasters, on the other hand, contend that the system works just fine, and presented FCC Commissioner Robert McDowell a checklist of things to consider prior to the FCC’s upcoming NPRM on the matter.

The meeting with McDowell took place 2/2/11. Broadcasters in on the meeting on behalf of the NAB included Barrington’s Chris Cornelius, Heart’s David Barrett and Schurz’s Marci Burdick. In addition to comments on retransmission and other topics, they presented McDowell with the following laundry list of points to consider before considering the retransmission issue.

1. What is the impact of early termination fees and/or other MVPD policies on consumers’ option to terminate service so as to watch television over-the-air and/or change MVPD service providers in the event of a retransmission consent carriage dispute? Should consumers be entitled to a rebate, credit or other decrease in their bills if broadcast channels are removed from their lineup?

2. MVPDs seeking to change the retransmission consent regime have argued that changes are needed to protect consumers from rate increases. Are there other modifications to our rules that would help control consumer rates?

3. We tentatively conclude that our cable consumer notification requirements should be applied on a technologically neutral basis so that all MVPDs (cable, DBS, and telco) must provide notifications of changes in service. We seek comment on this tentative conclusion. Would consumers benefit from such a change to our notification rules?

4. In many markets, a single MVPD controls the majority of MVPD households. Where a single MVPD controls a large segment of the market, a broadcaster’s ability to reach substantial numbers of MVPD subscribers depends upon successful negotiations with that operator. How does MVPD market share at the local, regional, and/or national levels impact bargaining power in negotiations for retransmission consent?

5. Many MVPDs own programming networks that compete with broadcast stations for advertising dollars, viewers, and compensation from other MVPDs. How does vertical integration of the MVPD distribution platform and programming networks impact retransmission consent? Does vertical integration impact MVPD incentives to fairly negotiate? Does it create an incentive to discriminate against broadcasters during retransmission consent negotiations? Does less compensation for carriage of broadcast signals translate into higher fees for MVPDs’ vertically integrated programming networks?

6. The network nonduplication and syndicated exclusivity rules do not establish exclusive rights; rather, they establish an enforcement mechanism for rights privately negotiated. Indeed, in some ways, the rules are more limited in scope than what may be privately negotiated, because they recognize exclusivity only within a specified geographic area and contain exceptions for significantly viewed signals. Further, exclusive retransmission consent agreements are prohibited. How should this affect our analysis of proposals to modify these rules? How are nonduplication and syndicated exclusivity different from the exclusive rights or other arrangements enjoyed by other programmers and/or MVPDs (e.g., DIRECTV’s NFL Sunday Ticket)? Should the Commission examine other exclusive arrangements as well?

7. Although information about television broadcast station ownership and operations is readily available from FCC electronic databases, there is a comparative dearth of information about MVPD ownership, operations and geographic coverage. If stations are unable to learn relevant details about MVPD operations in their markets, they may face difficulties making timely must carry/retransmission consent elections. To ensure that broadcasters can comply with their statutory obligation to make a carriage election, should we require MVPDs to periodically file data on their ownership (including a mailing address for the receipt of election notices), operation, and geographic coverage? Would this promote efficiency in negotiations and help avoid delay in starting the negotiation process?

RBR-TVBR observation: If anything, there is a federal interest in tilting the field of play toward broadcasters. It is very much in the public interest to have strong local broadcasters, financially able to produce strong local content, for the purpose of providing local news and information on a daily basis, and for the purpose of providing critical emergency information when need arises.

Are MVPDs going to do this? We’ll be mighty surprised the day there is a local cable news channel, and one each from the big satellite services, serving places like Myrtle Beach SC, Casper WY and Jackson TN. But to the feds, anything less than that should be unacceptable.

The FCC must keep the importance of strong, financially healthy local broadcast television front of mind when delving into this issue. It shouldn’t be hard – while MVPDs have a laundry list of things they want from the government, broadcasters are asking for something simple – just leave the system alone.
Remove the tantalizing possibility that nervous politicians will thoughtlessly take the MVPD position on this matter and cow to their demands should give MVPDs much more incentive to bargain in good faith going forward.