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ACA to FCC: Overhaul Retrans Rules

3/02/2005 2:42 AM Eastern

The American Cable Association Wednesday asked the Federal Communications Commission to overhaul retransmission-consent rules, in part to permit market forces to set the “price” for the carriage of TV stations.

In its petition for rulemaking, the small-cable-operator trade group is seeking reforms relating to what it claims is the competitive harm of broadcast exclusivity and network-nonduplication rules. The ACA wants small operators to be able to carry out-of-market “distant” TV stations in cases when in-market broadcasters are demanding cash-for-carriage in exchange for retransmission consent.

“ACA is asking the commission to remove artificial barriers to retransmission-consent ‘pricing,’” the lobbying group said in a statement. “If a broadcaster wants to charge consumers for a local signal, a cable operator should have the right to bring in lower-cost network programming. It pays to shop.”

Basically, in its petition, the ACA asked the FCC to change broadcast regulations to do the following: to maintain broadcast exclusivity for stations that elect must-carry or that do not seek additional payment for retransmission consent; to eliminate exclusivity when a broadcaster elects retransmission consent and seeks additional payment for carriage; and to prohibit any party, including a network, from preventing a broadcast station from granting retransmission consent.

The ACA stressed that it isn’t seeking the overall end of broadcast exclusivity.

The association filed comments with the FCC Tuesday asking it to require direct-broadcast satellite companies to give small cable operators in remote markets access to their local-to-local broadcast signals.

In those comments, the ACA basically argued that it is in the public interest for rural cable systems to be able to get good-quality signals for local TV stations from the satellite providers.

The trade group estimated that more than 1 million rural consumers are unable to receive quality local broadcast signals because they live in remote regions distant from broadcast transmitters.

The ACA is proposing a change to current law that would mandate that in markets where DBS providers deliver local-to-local signals, they must make those signals available to cable operators “on nondiscriminatory prices, terms and conditions” when the system can’t get those signals, in good quality, off-air.

“To be clear, we are not asking for those signals for free,” the ACA said in its comments. “We are asking for access on nondiscriminatory prices and terms,” similar to the deals currently reached by DirecTV Inc. and EchoStar Communications Corp. with multiple-dwelling units, universities and other companies, the trade group added.

Both DBS providers have refused to make their local-to-local signals available, according to the ACA.

“Given DirecTV’s and EchoStar’s continuing refusals to engage in a marketplace solution, the commission and Congress need to step in,” the ACA said in its comments.

EchoStar had a response to the ACA’s charges.

“We believe that broadcasters are the appropriate party to serve the cable operators with an acceptable signal, but if the cable operators would like to discuss business opportunities with EchoStar, we would be pleased to have discussions with them,” EchoStar spokesman Steve Caulk said.

ACA president Matt Polka said he was interested to hear EchoStar say it is willing to have discussions with operators because in the past, the DBS provider has refused to negotiate with the National Cable Television Cooperative, a buying co-op for small systems, for access to local-to-local signals.

A DirecTV spokesman said he couldn’t comment on the ACA filing because he hadn’t seen it.

DirecTV has received inquiries from smaller operators about obtaining its local-to-local service, according to the spokesman, but it has declined those requests.

“Frankly, cable’s our largest competitor, be it a large operator or a small one,” the DirecTV spokesman said. “We’re really not in the business of enriching a competitor’s service.”

In Tuesday’s comments, the ACA also told the FCC that Congress should consider extending the conditions mandated as part of the News Corp.-DirecTV merger to all retransmission-consent matters.

Those conditions were a streamlined arbitration process, the ability to carry a signal pending dispute resolution and special conditions for smaller cable companies. “These conditions should be applied to the retransmission-consent process broadly, with positive results,” the trade group said.

The ACA’s comments were filed in response to the FCC's inquiry required by the Satellite Home Viewer Extension and Reauthorization Act, passed by Congress in December 2004. The FCC -- which called for comments on the impact on competition as a result of current retransmission-consent rules -- will provide a report and recommendation to Congress by September.

September