With retransmission consent one of the most heated issues facing broadcast television and the providers of cable TV signals to millions of U.S. consumers, Congress has stepped in by seeking to put a stop to “blackouts” that keep getting uglier — and paying subscribers to MVPDs in the middle of dispute after dispute.
Bipartisan legislation was introduced in the House of Representatives on Thursday that would repeal “outdated regulations of the 1992 Cable Act.”
The NAB has made it clear it does not want any such action to occur.
Therefore, it will be the task of NAB Government Relations lead Curtis LeGeyt (a former staffer of Sen. Patrick Leahy) and former Sen. Gordon Smith, who leads the broadcast media lobbying organization to put a stop to the legislation.
Introducing the Modern Television Act in the House on Thursday (7/25) are California Democrat Anna Eshoo — representing such Silicon Valley cities as Sunnyvale and Palo Alto — and Louisiana Republican Steve Scalise, who represents areas to the north and southeast of New Orleans.
Eshoo and Scalise say their bill would put an end to retransmission consent and compulsory copyright licenses, and would “increase competition in the TV marketplace.” Further, it would “better address perennial broadcast TV blackouts.”
The Modern Television Act of 2019 would accomplish the following:
- Extend the “Good Faith” negotiation requirements (that otherwise expire on December 31) and applies these requirements to small- and medium-sized cable operator buying groups. This will allow smaller competitors to band together in negotiations for programming and lower costs for consumers. (Effective 90 days after enactment.)
- Protects consumers from experiencing broadcast “blackouts” when MVPDs and broadcasters fail to extend an agreement by requiring MVPDs carry a broadcast signal while the parties continue negotiations for up to 60 days. Parties are retroactively paid for their content aired during this time. (Effective 90 days after enactment.)
- Repeals retransmission consent, compulsory copyright licenses, and several other outdated statutory provisions and regulations. This would allow free-market contract negotiations to happen under traditional copyright law. (Effective 42 months after enactment.)
- Establishes a mechanism by which the FCC may, but is not required to, compel parties to seek “baseball-style” binding arbitration through a neutral third-party arbitrator, following an extended impasse or a finding of bad faith. Consumers are protected from blackouts that otherwise would have occurred, and copyright holders are paid for their content during this process. (Effective 42 months after enactment.)
- Preempts federal, state, and local authority to regulate rates of cable services. (Effective 42 months after enactment.)
- Requires the Government Accountability Office to report specific metrics about the impact of this Act on consumer and the marketplace every two years. Based on the totality of these metrics the FCC must determine if this Act has had a net positive, net negative, or indeterminate impact on consumers and the marketplace. If the FCC finds a net negative impact, it must recommend specific policies for Congress to improve the marketplace.
- Ensures consumers have access to local programming by retaining the ability of a local television broadcast station to require carriage on cable and satellite providers in their local market. (Effective immediately, no change in law.)
“It’s time for Congress to finally modernize these laws,” Scalise said. “Our bill goes back to basic copyright protection, so that everyone gets paid for their product, and consumers get to choose whatever they want to buy, wherever they want to buy it, whatever device they want to watch their video on.”
Eshoo added, “These outdated laws aren’t just bad for the market, they’re hurting consumers. When blackouts take place, consumers are held hostage during the disputes between the broadcasters and the cable company. This year, there have been over 200 blackouts. That’s more than double the number from a few years prior. In fact, my constituents are facing major broadcast blackouts right now. These outdated regulations end up hurting consumers in their wallets.”
What are “key stakeholders” saying about the legislation? Don’t look for the NAB’s comments on Eshoo’s Congressional release announcing the proposed legislation.
“NAB respectfully opposes legislation introduced by Reps. Eshoo and Scalise that we believe would undermine America’s world leadership in free and local broadcasting,” said EVP/Communications Dennis Wharton.
That said, Wharton said the NAB looks forward to working with Eshoo and Scalise, and other policymakers, as the voice of broadcast media on Capitol Hill strives “to preserve a local broadcasting system that is the envy of the world.”
Wharton added, “In an era of social media dysfunction and the loss of daily newspapers, local television remains an indispensable force for good by exposing corruption at City Hall, keeping communities safe during natural disasters, and delivering the most popular source of free entertainment and sports programming.”
Local television has also used retransmission consent fees to combat dwindling advertising revenue, with Nexstar Media Group seeing Q1 growth primarily thanks to retrans income, rather than from advertising.
The “key stakeholders” in support of the proposed legislation include the Taxpayer Protection Alliance, Public Knowledge, the National Taxpayers Union, and Gigi Sohn, a former Counselor to the FCC Chairman who held the post prior to Ajit Pai — Tom Wheeler.
To little surprise, other supporters include the ATVA, and ACA Connects.
ACA Connects President/CEO Matthew M. Polka said the proposed act “represents a serious and long-overdue attempt to address the increasing dysfunction in the television marketplace. For too long, broadcasters’ greed and ability to leverage their government-granted protections have led to skyrocketing prices and broadcaster blackouts. And for too long, ACA Connects’ smaller cable system operator members have borne the brunt of broadcasters’ misconduct. The Modern Television Act promises real change and real relief for consumers.”
Polka added that if the act were law today, tens of thousands of Americans – including many customers of ACA Connects members – would never have lost their broadcast signals. “The endless cycle of broadcaster price increases might finally stop, or at least slow down,” he said.
Polka was especially pleased to see that the act contains provisions that, “at long last, would extend the FCC’s good faith rules to negotiations involving buying groups used by small cable system operators, such as the National Cable Television Cooperative.”
He continued, “Buying groups often negotiate carriage deals between large cable programmers and small cable operators because they lower transaction costs for the former and lower carriage fees for the latter. It’s a win-win, especially for consumers. However, the retransmission consent market has missed out on obtaining these same pro-competitive benefits. While negotiations between broadcasters and individual cable operators are governed by good faith rules, negotiations involving buying groups are not. This has led some large broadcasters to choose not to negotiate with small cable buying groups. The Scalise-Eshoo approach changes that.”