FCC's Wheeler backs off exclusivity rule changes to retransmission deals, report says

FCC Chairman Tom Wheeler is reportedly backing away from changing rules that regulate retransmission negotiations between broadcasters and MVPDs.

According to TVNewsCheck, which cites an unnamed agency source, Wheeler has put an indefinite hold on an earlier proposal to eliminate network non-duplication and syndicated exclusivity rules in pay-TV content licensing contracts.

Wheeler did not comment on the report, according to TVNewsCheck.

TVNewsCheck said the FCC chairman has been urged by members of Congress to work cooperatively before the agency made any changes to retrans regulation. Specifically, opponents argued Congress needed to consider possible revisions of the federal compulsory copyright license at the same time as evaluating changes to the exclusivity rules. According to the publication, opposition has come from the likes of Senate Judiciary Committee Chairman Charles Grassley (D-Iowa), Sen. Dianne Feinstein (D-Calif.) and other top lawmakers and officials.

The exclusivity rules provide key leverage for TV broadcasters in retransmission negotiations, preventing MVPDs from carving deals with non-local affiliates when talks with local stations break down. 

Wheeler -- a former cable executive -- earlier said the rules are outdated, and that broadcasters and MVPDs should negotiate such exclusivity between themselves. "In this item, the commission takes its thumb off the scales and leaves the scope of such exclusivity to be decided by the parties," Wheeler said in August. 

His proposal has been lauded by groups like the American Cable Association, but staunchly opposed by networks, led by the National Association of Broadcasters (NAB).

According to TVNewsCheck's source, none of the other four FCC commissioners have backed Wheeler's proposal.

Wheeler's attempts to change the regulations would have aided pay-TV operators like Comcast (NASDAQ: CMCSA), AT&T's DirecTV (NYSE: T), Dish Network (NASDAQ: DISH) and others by giving them the ability to obtain nearby TV channels in the event they couldn't reach a retransmission agreement with a TV station.

Total retransmission fees are on pace to exceed $9.8 billion by 2020, according to SNL Kagan. 

For more:
- read this TVNewsCheck story

Related articles:
ACA fires back at NAB, says it has no problem with privately negotiated exclusivity arrangements
FCC Media Bureau chief Bill Lake: Time to end 'outdated' exclusivity rules
FCC's Wheeler thrills pay-TV operators, proposes removal of exclusivity rules from retrans negotiations

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