NCTA tells FCC to ban retrans-related blackouts of online content

After broadcasters and their representative groups were the first to react to the start of the FCC's review of rules governing retransmission licensing talks, the cable industry chimed in with an aggressive counterpoint.

Specifically, the National Cable Telecommunications Association (NCTA) has asked the FCC to make new rules banning broadcasters from blocking access to online content during retrans-related blackouts. 

"Some broadcast stations are owned by entities that also offer websites and online content that are generally available on the Internet to anyone with a broadband connection," the NCTA said in comments to the FCC. "That content may include some of the same programming that appears on their broadcast stations, which may be offered simultaneously with its transmission over the air by broadcast stations or on an on demand basis. But the availability of such online programming to ISP customers typically has nothing to do with the contractual relationship between cable operators and broadcasters and is completely extraneous to retransmission consent negotiations."

The FCC's review of the so-called "totality of the circumstances test," which determines if the parties in a retrans deal 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 in September, the FCC seemed to side with MVPDs, saying 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. 

In its filing Tuesday, the NCTA reminded the FCC of that position: "These new competitive alternatives to cable operators have, according to the commission, 'improved broadcasters' leverage in retransmission consent negotiations with MVPDs,'" the cable lobby said. "In today's environment, 'an MVPD that is unable to reach a retransmission consent agreement with a broadcast station may permanently lose subscribers to rival MVPDs – including subscribers to its associated voice and broadband services.'"

Also chiming in, the American Cable Association (ACA) urged the FCC to adopt new rules prohibiting broadcasters from bundling their channels with "must-have" programming like regional sports networks (RSNs).

"The commission must prohibit broadcasters from bundling retransmission consent with carriage of a same market regional sports network ("RSN") or other 'must have' programming for the purpose of raising prices," the ACA said in a filing, also submitted Tuesday. "Although the commission originally determined in the 2000 Good Faith Order that retransmission consent proposals conditioned on carriage of any other programming are consistent with competitive marketplace considerations and thus do not violate the broadcaster's duty to negotiate in good faith, the market for retransmission consent of top broadcast stations has changed significantly since then."

Meanwhile, individual cable companies also spoke up. Charter Communications (NASDAQ: CHTR), which is in the process of trying to buy Time Warner Cable (NYSE: TWC) and Bright House Networks, objected to National Association of Broadcasters (NAB) comments that accused the cable industry of excessively consolidating power. 

"New Charter will be a distant third MVPD with only 17 percent of the video market and will be the largest operator in only 5 of the top 20 markets," said a statement released by Charter spokesman Justin Venech. "This is clearly not a concern to TV One, RFD TV, AXS.TV and numerous other independent programmers and their viewers who support New Charter."

For more:
- see this NCTA filing

Related articles:
NAB accuses FCC of ignoring consolidated cable industry in retrans review
FCC votes to review definition of good-faith broadcast retransmission negotiations
FCC's Wheeler thrills pay-TV operators, proposes removal of exclusivity rules from retrans negotiations