FCC votes to review definition of good-faith broadcast retransmission negotiations

As expected, the FCC's five commissioners voted unanimously to review rules governing retransmission consent negotiations between pay-TV operators and broadcasters.

The review of the so-called "totality of the circumstances test," which determines if the parties are negotiating in good faith, comes after passage by Congress last year of the Satellite Television Extension and Localism Act Reauthorization (STELAR) Act. That law mandates that the FCC examine and modernize rules governing the video industry. 

In announcing the review, the FCC acknowledged that broadcasters have considerably more leverage in retransmission talks than they did in 1992, when the current rules were formed. With the emergence over the last two decades of satellite and telco-based pay-TV services, consumers simply have more choice when a local station is blacked out amid a retransmission dispute. 

Last month, FCC Chairman Tom Wheeler proposed ending "exclusivity" rules that restrict pay-TV companies from distributing the signal of a distant network affiliate in cases where a network's local station is blacked out.

The American Cable Association, which has lobbied hard for such a review, released predictable plaudits: "In the end, ACA hopes the FCC will establish vigorous policies designed to stop TV station misconduct, including sudden TV signal blackouts as well as blocking MVPDs' broadband subscribers from accessing otherwise free online content during or after a negotiating impasse," said ACA President and CEO Matthew Polka. "The FCC also ought to require broadcasters to provide information substantiating their reasons for bargaining positions taken when requested to in the course of their negotiations, and bring a halt to the practice of TV stations insisting on setting prices, terms, or conditions for broadcast stations they may later acquire or for programming networks they may launch in the future as part of current retransmission consent negotiations."

The current rules have fostered a fast rate of growth in broadcast retransmission fees, which are predicted to grow to $9.8 billion by 2020. 

Understandably, the National Association of Broadcasters (NAB) voiced concern about the FCC's latest action on the topic.

"The notice, at first blush, appears to go much further than Congress directed," said NAB spokesman David Wharton, in a statement. "We were struck by the FCC's admission that nothing in this proceeding will necessarily translate to lower cable prices for consumers. We also question whether the FCC should be taking actions that benefit heavily consolidated companies that dominate the video landscape like Dish, AT&T/DirecTV, Time Warner Cable/Charter and Verizon. Consumers will be left wondering why the FCC is working overtime to tip the scales even further in favor of these mega-companies."

For more:
- read this FCC press release
- read this Deadline Hollywood story
- read this TV News Check story
- read this American Cable Association press release

Related articles:
More retrans drama for Dish; operator sued by Indiana station for allegedly shorting it on fees
Sinclair says FCC actually 'delayed' new deal with Dish, didn't help lead to it
NAB, others sue to block FCC's ruling on 'effective competition' for cable operators

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