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New Retrans Battlefront: the Web

Stations and MSOs square off, putting Comcast’s NBC in a tight spot 1/25/2016 8:00 AM Eastern
TakeAway

Online blocking could be a retrans issue for cable operators, given the FCC’s focus on over-the-top video.

WASHINGTON — The ugly fight between broadcasters and cable operators over retransmission consent is playing out very publicly in the Federal Communications Commission’s docket on so-called good faith negotiations.

 

The tensions are building, particularly between NBC affiliates and the National Cable & Telecommunications Association. The NCTA’s largest MSO member — Comcast — is also NBC’s owner.

 

That strain (see sidebar) has also put a spotlight on a thorny issue for FCC chairman Tom Wheeler. He has long professed that his agency is not in the business of regulating online content. But he does say it’s in the business of regulating access to that content to ensure it flows freely.

 

For example, the FCC recently opened an “inquiry” into zero rating data plans that exclude some online video traffic from data usage thresholds.

 

In filings with the FCC, the NCTA has argued that the MSO practice of blocking broadcast-TV content from the Internet during retransmission-consent disputes should be considered de facto bad-faith negotiations and prohibited by the agency.

 

The NCTA has said that there is no justification for blocking that access to get leverage in a negotiation over unrelated cable carriage of broadcast-TV signals. In fact, that was the sole focus of its reply comments to the FCC last week.

 

The NCTA is challenging the FCC’s Open Internet rules in court, but nonetheless noted in the filing that those rules prevent cable operators from engaging in “similar” blocking of broadcast or non-broadcast Internet content.

 

The FCC has sufficient authority to rule that online blocking is out of bounds as a negotiation tactic, the cable trade group has said.

 

The National Association of Broadcasters has argued that such a rule would be tantamount to mandating that stations tie the rights of their broadcast programming to their online content. Cable operators oppose that practice in other circumstances, such as retransmission-consent deals linking carriage of stations and cable networks.

 

“What MVPDs seek is, essentially, a government-mandated tying rule demanding that broadcasters authorize the distribution of their programming on all platforms whenever they consent to retransmission of their signals,” the NAB said.

 

The NAB is missing the point, the NCTA countered.

 

“NCTA is not suggesting that broadcasters must distribute any of their content online, much less that they distribute it for free,” the group told the FCC.

 

If a broadcaster doesn’t have the online rights, the NCTA has argued, it should not be required to do so when it strikes a retrans deal. “But where a broadcaster is already making its content available online to the general public — with or without charge — including to the Internet customers of a cable operator (in which case the broadcaster obviously has already obtained the rights to do so), it is a violation of good faith for the broadcaster to block those customers’ access to such content.”

 

The Motion Picture Association of America has weighed in on broadcasters’ side, further complicating the picture. MPAA member Universal Studios, like NBC, is owned by Comcast’s NBCUniversal.

 

The MPAA put a spotlight on the internecine divide itself, pointing out that not only Universal but The Walt Disney Co., Viacom’s Paramount Pictures, Sony Pictures Television, 20th Century Fox and Warner Bros. are all also members of NCTA.

 

The MPAA, for one, definitely sees adding online to good faith as getting into content regulation, calling it a “direct regulation of content providers” in violation of the First Amendment.

 

The FCC is under no obligation to change or expand the elements of its “totality of circumstances” test for retrans negotiations, or to add to its list of de facto violations. But after Congress directed the agency to look into the matter, the FCC raised a number of issues to solicit input, including the blocking of online access.

 

Now most players in the retransmission consent debate are making sure the FCC gets that input.

 

Punch, Counterpunch

 

Cable operators and broadcasters are lining up to give the FCC an earful as it looks into “good faith” retransmission-consent negotiations:

 

Sinclair Broadcasting: “The FCC should shun new constraints on broadcasters in retransmission negotiations that have been tailored by their MVPD advocates to depress retransmission fees for broadcasters and that risk driving high-quality programming off of broadcast platforms and onto pay TV platforms.”

 

Media General: “The hyperbolic cries of crisis and unsupported claims of consumer protection from the MVPD industry are nothing but pretext for government intervention, artificially reduced retransmission-consent fees and a boost to their bottom line.”

 

Cablevision Systems: “[B]roadcasters are using their government- granted leverage to force consumers to pay for broadcast-affiliated programming that they do not want, and are subjecting consumers to more and more frequent blackouts and ever-increasing fees to cover the cost of retransmission consent.”

 

Time Warner Cable: “Commission action is urgently needed to curb broadcasters’ brinkmanship tactics that result in blackouts and unreasonably drive up retransmission fees for MVPDs and their customers.”

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