Pay TV Focusing on Seven Must-Have Retrans Consent Rule Changes
The seven must-have changes pay TV seeks in retransmission consent rule reforms won't solve all that ails the retrans market, but they will improve it, Dish Network Deputy Counsel Jeffrey Blum told us Tuesday. Numerous multichannel video programming distributors (MVPDs) and allies -- including the American Cable Association, Cablevision, CenturyLink, DirecTV, Dish, ITTA, Mediacom, NTCA, Time Warner Cable and USTelecom -- through the American Television Alliance have lined up behind seven specific reforms they're pushing at the FCC. The deadline for the agency to issue an NPRM is Friday. Broadcasters are opposing many retrans changes (see 1508310026).
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Those seven actions that the ATVA hopes the FCC defines as per se evidence of bad faith negotiating -- as it said in an ex parte to be posted in docket 10-71 -- are: restricting MVPD subscribers' access to publicly available online video programming; requiring bundling of content; blacking out marquee events; stopping import of an out-of-market signal during a blackout; ceding the right to negotiate or approve a retrans agreement to a third party; requiring MVPDs to restrict viewers' use of some home equipment or requiring installation of a set-top box on each TV receiver; and demanding payments for every MVPD subscriber, even those who aren't receiving the station as part of their pay-TV packages. The filing -- detailing ATVA member meetings with Commissioners Mignon Clyburn and Ajit Pai -- echoed similar arguments ATVA made before agency representatives earlier this summer (see 1507170048).
The past year brought the pay-TV world a better opportunity than it has had in years for tackling the broadcaster power dynamic, ACA CEO Matt Polka told us. He pointed to the FCC in 2014 tightening the joint sales agreement rules (see 1404010037), Congress then directing the agency to review its "totality of circumstances" test for good-faith negotiations as part of the Satellite Television Extension and Localism Act Reauthorization, Chairman Tom Wheeler pushing for elimination of the syndication exclusivity and network nonduplication rules (see 1508120051) and the Local Choice legislation before Congress (see 1508100034). "That's a pretty strong signal these rules are outdated ... and need to change," Polka said. "I would have to say the FCC is pretty serious about doing something. I don't think they're just going to put [an NPRM] out and check a box."
"It is plain for all to see that this 'crisis' is completely fabricated by pay TV companies who actually desire disruptions in service," an NAB spokesman said Tuesday. "The only question is whether the FCC will reward this despicable treatment of viewers with government intervention when it is clearly not warranted." NAB has been resisting possible rule changes, arguing there would be an increase in what it said would be pay TV-generated retrans disputes (see 1507140021).
Any FCC action on pay-TV issues should look beyond just retrans rules to such issues as large equipment rental fees, "pervasive erroneous charges" and unfair termination fees, a TVFreedom spokesman told us Tuesday. "It's hard to comprehend the focus within the FCC and Congress would be on a $5 [broadcast retrans] fee that consumers pay on a monthly bill that is upwards of $150. If you're going to look at true reform, it's incumbent on the federal government to look at all these issues holistically and not one fee."
If the FCC doesn't adopt the rules that ATVA is pushing, "there really is no other avenue," Blum said. "It's just going to get worse and worse -- rising rates, rising blackouts. All seven have an adverse effect. These are things the group has identified as conduct that makes blackouts more likely and raises rates. Two out of seven, I don't think that's sufficient to address the problem."