Verizon feels that OTT streaming customers shouldn't bear the brunt of a retransmission impasse between their internet provider—often a cable operator—and programmers, and wants the FCC to consider this in any reform of the retransmission consent process.
The service provider asked the FCC in a filing (PDF) to consider reforming the retrans process between MVPDs and content owners in order to reduce costs for providers that are passed on to consumers.
In the filing, Verizon suggested that the FCC should find a broadcaster is not negotiating in good faith if it expands a programming blackout to customers of an MVPD’s affiliated internet access services.
“These customers may not even subscribe to the MVPD’s video programming service, or could reside in a different local market that does not receive the broadcast station,” Verizon said. “The Commission can address these abuses under the existing rules by finding that in these cases the broadcaster is simply not negotiating retransmission consent for the broadcast station signal, or is ‘acting in a manner that unreasonably delays retransmission consent negotiations.’”
A relatively nascent video player, Verizon faces a common challenge in dealing with rising content retransmission costs from a finite number of content owners.
In the FCC filing, Verizon said the regulator could help competitive providers like itself and others pass on more affordably priced content to their customers by creating regulatory actions that address “ballooning rates for carriage of broadcast TV signals and multiple blackouts of broadcast programming.”
“Verizon has frequently pointed to the principal sources of these rising costs—the broken retransmission consent regime and unreasonable programmer practices such as forced bundling of desired with undesired content,” Verizon said in an FCC filing. “The Commission can address rising programming costs through its rules governing retransmission consent and program access.”
Two actions could be taken, said Verizon: Congress could rework the statutory scheme in Section 325 of the Communications Act or the FCC could adopt additional protections for MVPDs and consumers.
One of the practices that Verizon would like to have the FCC consider a lack of good faith is when a programmer mandates that an MVPD must carry a bundle of affiliated channels to get consent to retransmit the broadcast station signal.
According to Verizon, these arrangements often don’t include an “economically viable alternative for carrying just the broadcast station signal.” As a result, the costs for retransmission consent are generally higher, meaning that the MVPD must pass on higher service prices to subscribers, often after prolonged and sometimes bitter bargaining between the parties.
Programming blackouts have been an all-too-common issue in the MVPD space. AT&T, for example, recently agreed to terms on a new retransmission deal with Dispatch Broadcast Group, restoring CBS affiliate WBNS-TV in Columbus and NBC affiliate WTHR-TV in Indianapolis to DirecTV and U-verse after a month-long blackout.