Pay TV, Broadcasters Firms File Responses in FCC Retrans Rules Review

3:47 PM PST 06/27/2011 by Georg Szalai

The National Assoc. of Broadcasters and Directors Guild of America are among those who see no need for government intervention, while DirecTV and Time Warner Cable repeat their call for rule changes.


NEW YORK – Broadcasters, pay TV distributors and interest groups, including the Directors Guild of America, have filed responses as part of an FCC comment period for the agency’s review of current retransmission consent rules.

The current retrans rules, which have governed the FCC’s role in the carriage fee negotiations between broadcasters and cable and satellite TV companies since 1992, have been called outdated by critics. A series of high-profile programming stand-offs, such as a showdown last fall between News Corp./Fox and cable operator Cablevision Systems, which blacked out the first games of the World Series in Cablevision homes, led to the review of the rules. The FCC has repeatedly said that it doesn’t have enough clearly defined powers in the case of disputes.

When comments on the FCC’s review were due late last month, broadcasters, which have seen rising revenue from retrans, as expected argued that government intervention is not needed, while TV distributors called for a major overhaul of retrans rules to create a more level playing field.

Responses to those filings were due Monday, and they in many cases restated the original comments and/or replied to arguments made by parties on the opposing side of the debate.

The National Association of Broadcasters in its reply said it “again urges the Federal Communications Commission to resist repeated requests of multichannel video programming distributors to micromanage the negotiation of thousands of complex retransmission consent agreements.”

It also argued that “substantial changes in the existing FCC regulations governing retransmission consent are unnecessary, would (in many cases) exceed the Commission’s authority and would be harmful to the public interest.” As a result, “the FCC should focus on revising its notice rules to the extent necessary to ensure that consumers have adequate information to make informed decisions in the event of a rare retransmission consent impasse,” the NAB concluded.

Fox and Cablevision were also in the process of filing a response late in the day Monday.

Satellite TV giant DirecTV in its response highlighted that the comments filed in the retrans review proceeding show a “clear divide in perspective.” Broadcasters’ argument that the existing retrans regime is working well should come as no surprise “given the regulatory advantages the current regime bestows upon broadcasters,” the company added. “In order to prevent
viewers from being used as pawns, DirecTV Inc. and others have urged the Commission to modify its rules.”

The company has been pushing for an elimination of “preferential exclusivity rules” and an enhancement of the requirement for “good faith” negotiations. For example, DirecTV previously said in a filing that broadcasters shouldn’t be allowed to refuse to honor a request for a stand-alone retransmission consent offer for the broadcast assets in question and shouldn’t be allowed to turn their signal off during the key ratings measurement periods known as “sweeps” or “prior to marquee events,” such as big sports events and the Oscars.

Changes to the retrans rules should help create “a somewhat more level playing field that is more conducive to arriving at agreement without broadcaster brinksmanship or actual withholding of signals,” DirecTV concluded in its Monday filing.

Cable giant Time Warner Cable in its response made similar arguments and concluded that broadcasters’ arguments “rest on fundamental factual and legal misconceptions, and these misconceptions only confirm the need for immediate Commission intervention.”

Meanwhile, the DGA sided with broadcasters. “Existing retransmission consent rules operate exactly as intended: they guarantee retransmission negotiations are conducted on an even playing field, and they ensure that financial and creative benefits accrue to content-creators based on the market value of their programming,” the organization said. “We would ask that the FCC give careful consideration to the impact of any rule changes that disadvantage those who create and finance television programs on the thousands of DGA members who work in the television industry. Quite simply, permitting multichannel video programming distributors to sell content, which they obtain through unbalanced negotiations undermines broadcasters’ incentives to invest in new programming, harming both our members and consumers.”

Email: Georg.Szalai@thr.com

Twitter: @georgszalai

 

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