Retrans Reform, Indie Programming Rules Seen Unlikely Under Next FCC

One FCC staffer said retrans reform actions seem unlikely because Republican commissioners expressed the belief the agency doesn't have much jurisdiction in this space. It's unclear whether that sentiment also extends to the indie programming NPRM currently open and championed by Commissioner Mignon Clyburn, the staffer said, but that proceeding probably isn't nearly as high a priority to the Republican commissioners as rollbacks of other FCC actions such as privacy. GOP Commissioners Ajit Pai and Mike O'Rielly complained of regulatory overreach in their votes in September against the NPRM (see 1609290036). Clyburn's office didn't comment. Comments on the NPRM are due Jan. 26, replies Feb. 22.

There's no reason to think Pai and O'Rielly would opt for more regulation of retrans when Wheeler wouldn't, said a broadcast attorney. The lawyer also said most people are fairly confident that there won't be any change in the retrans regime since that doesn't comport with Pai's and O'Rielly's philosophy, or that the indie programming NPRM will advance. If the next FCC does tackle any video-related issues, a more likely target would be deregulating media ownership, the lawyer said. Pai is widely expected to become at least interim FCC chairman starting as soon as Friday.

"The FCC has looked at retransmission consent under both Tom Wheeler and Julius Genachowski and concluded that government intervention in a free market negotiation is unwarranted [and] NAB agrees," said NAB in a statement.

Questions about how the next FCC will look at retrans issues will have to wait until FCC leadership is determined, BTIG analyst Rich Greenfield emailed. Multiple industry officials said there haven't been serious discussions about trying to include video-related issues in the satellite TV reauthorization that expires in 2019.

Broadcasters have perhaps been emboldened by Wheeler's decision not to make changes to the good-faith negotiating framework, the result being "last-minute renewal proposals with an intractable set of terms and conditions one to two months before the current agreement expires," Incompas said earlier this month in comments to Clyburn's #Solutions2020 action plan (see 1701120045). It said the FCC must ensure video competition by requiring a six-month window for negotiations and saying a refusal to participate in regular discussions of a proposed agreement is a violation of the good-faith standard. The group said broadcasters should be required to add to their proposals a justification for proposed rate increase "based on direct and legitimate economic factors."

Saying she didn't know enough about the GOP commissioners' views to comment, Incompas Chief Advocate and General Counsel Angie Kronenberg emailed that for retrans reform "the politics are really hard, especially given the statutory language the FCC has to work with on this issue. But it's a significant problem for smaller video providers trying to compete against big cable."

Calling it too early to say how the next FCC administration "might assess and address failures in the video marketplace," NTCA Director-Legal and Industry Division Jill Canfield said in an email one priority should be more transparency in that market: "Broadcast retransmission consent contracts are 'negotiated' pursuant to decades-old rules and are structured to keep consumers and even policymakers in the dark about the escalating costs of content. Action is needed to shed light on the real source and scope of these never-ending cost increases and to help guide discussion on what else must be done.”

Echoed American Cable Association President Matt Polka, "Broadcasters' monopoly blackouts of consumers [are] only going to rise as the year continues. Washington created retransmission consent, and it will be Washington's responsibility to fix it when even more consumers lose their so-called 'FreeTV.' "

The existing video market, contrary to broadcaster arguments, "is not a free-market negotiation," Free State Foundation President Randy May emailed. "There is just too much of a regulatory overlay, including legacy statutory mandates involving must carry, network non-duplication, syndicated exclusivity, and compulsory licensing, to think of what takes place now as a free market negotiation. So, for a long time I’ve advocated that, rather than the FCC adopting new regulations, Congress tackle video market reform by moving to get rid of all the legacy mandates in light of the competitiveness of the marketplace. This would take the form of something like the Next Generation Television Marketplace Act introduced by Congressman Steve Scalise [(R-La.)] five years ago.”