FCC Kicks Off Review of Retrans Rules

The FCC is looking to strengthen and clarify its powers in program disputes between broadcasters and TV distributors.

NEW YORK -- The FCC on Thursday formally invited comments on possible reforms to current rules governing retransmission consent negotiations amid recent high-profile program disputes between broadcasters and pay TV providers.

The agency feels the current rules, which date back to 1992, don't give it enough clearly defined powers in retrans disputes. FCC chairman Julius Genachowski voiced that opinion during the fall showdown between Cablevision and News Corp./Fox, which led to a temporary loss of Fox signals in Cablevision homes.

In a so-called Notice of Proposed Rulemaking Thursday, the FCC reiterated that it "doesn’t have the authority to require broadcast television stations to provide their signals to pay television providers or to require binding arbitration." ‬‪

The NPRM proposed changes based on those guidelines and Congress’ framework for market-based negotiations that are supposed to happen in "good faith" and minimize service disruptions. 

The FCC said it is looking for comments on possible reforms that would provide "more guidance to the negotiating parties on good-faith negotiation requirements" and improve notice to consumers in advance of possible service disruptions caused by disputes.     

It also mentioned that several parties have suggested that the FCC should address the ability of broadcasters to make retrans deals, which cover broadcast networks, conditional on payment for cable networks - a practice known as "tying."
"Since Congress enacted the retransmission consent regime in 1992, there have been significant changes in the video programming marketplace that have contributed to changes in negotiations for retransmission consent," the FCC highlighted Thursday.

"Retransmission consent negotiations have become more contentious recently, and consumers have gotten caught in the middle," said Genachowski. "It’s time to take a fresh look and explore whether there are measures we can take to allow the market-based process contemplated by the retransmission consent laws to operate more smoothly, and serve consumers and the marketplace."

Said American Cable Association president and CEO Matthew Polka: “The American Cable Association believes an Extreme Makeover: FCC Edition is needed to protect consumers from price-gouging TV stations."

Cablevision COO Tom Rutledge called the NPRM "an important first step." Cablevision proposed that the definition of "good faith" talks should include the prohibition of "tying" on the part of network owners, transparency of fees by making them public and no discrimination on the part of network owners between smaller and bigger cable and satellite TV providers.

DirecTV CEO Mike White the other day predicted there wouldn't be sweeping retrans reform, but suggested the agency should improve the transparency of the retrans market.