FCC Rulemakings on Retrans, AllVid, Media Ownership Seen in 2011 by Lake
Several high-profile FCC rulemakings likely will be forthcoming in 2011, many in the first quarter, from the Media Bureau as staff work advances on retransmission consent, media ownership and AllVid rules, Chief Bill Lake said Wednesday. A rulemaking notice on deals between TV stations and subscription-video providers took up most of his prepared remarks at a luncheon of industry executives sponsored by the Media Institute. The bureau is preparing “a notice that will take a broad look at what more we might do to advance the statutory objectives of allowing retrans fees to be set by market forces, while protecting the interests of consumers,” he said.
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"Uncertainty exists about what good faith means,” according to industry players who have spoken with the bureau, Lake said. “Our rules provide some limited guidance on this. But if we can provide greater certainty to the marketplace, that could help to guide the negotiating parties and reduce the number of failed deals and dropped signals. We may try to identify additional practices that will be treated as per se violations of the duty to bargain in good faith.” A copy of his prepared remarks are at http://xrl.us/biatx4.
The FCC “may be able to provide more specifics about the meaning and scope of the ’totality of the circumstances’ test,” Lake said. “Because a principal concern is to protect consumers when talks break down, we may propose to strengthen our notice requirement and extend it to non-cable distributors and broadcasters. If some of our broadcast rules are thought to interfere with market negotiations, we may want to look at those rules."
It’s significant the item will be a rulemaking, and not an inquiry, and shows the commission is taking seriously pay-TV concerns, said industry officials including President Matt Polka of the American Cable Association. “The fact that this rulemaking would come out in 2011, presumably prior to the impact of what would be hundreds if not thousands of retrans negotiations across the country, could have a very dramatic and positive impact on this next round” of talks, he told us. “We're expecting what would be the worst retrans round in the next cycle, which is why I'm very happy to see this will be a rulemaking, not an NOI, at the same time those talks get under way.” NCTA sees the rulemaking as “a constructive step forward and serious review of a marketplace that has undergone significant changes and merits a fresh look,” a spokesman said.
The NAB “strongly endorses educating consumers with the multiple options available to them in the exceedingly rare instance when a retransmission consent dispute arises, including the antenna TV option,” President Gordon Smith said. “Injecting Washington into private business negotiations that have a 99 percent success rate only serves to embolden pay-TV companies.” FCC Chairman Julius Genachowski had said staff were looking into the whether pay-TV subscribers should get more notice of brewing disputes, and later told Sen. John Kerry, D-Mass., that the commission was looking to Capitol Hill for action because the agency’s ability to act in carriage impasses is limited (CD Nov 2 p1). The retrans rulemaking “won’t come out in December,” Lake said during a Q-and-A. “It will be sometime in the first part of next year."
Also likely for that time period is a rulemaking on the commission’s quadrennial review of media ownership rules, Lake said. Congress mandated the review for 2010, but the commission has been behind schedule and some agency officials have said an order likely will be voted on in the second half of next year. The review is “a topic of great frustration of mine,” Lake said. “First, an absence of funding and then some contracting difficulties have taken us until this week to get the last of those contracts out the door,” he said of studies of media ownership.
A prospective rulemaking on rules for consumer electronics devices to be able to connect to any pay-TV system is “not so frustrating because it’s more under our control,” Lake said. “You won’t see that in December,” he said of the rulemaking notice. “But we hope to have something out in the first quarter of next year,” he added. “We are learning about what can be done and what’s difficult to do in that process.” Some agency and industry officials had initially expected the rulemaking to be voted on this year.
Lake also devoted time during his speech to the agency’s efforts to repurpose spectrum from broadcasters and others for wireless broadband. “We would love to receive the constructive input of people in this room on the ideas” in a rulemaking notice approved at last month’s FCC meeting, Lake said. “If that input is to be constructive, it has to be grounded in a clear-eyed appreciation of today’s spectrum environment and of exactly what we are proposing to do.” “Facts” that “can’t be blinked” away include “the stratospheric growth of wireless broadband use,” he said. After last year’s DTV transition, which he helped oversee, “some broadcasters are making good use of this spectrum dividend, others are not,” Lake said. “This means it is inevitable that, as we look for sources of spectrum, one place we need to look is broadcast spectrum that is not being efficiently used.”