Policy

Parting Shot at Retrans Rules

8/01/2011 12:01 AM Eastern

Washington — Outgoing American Cable Association
chair Steve Friedman exited that post by calling on
the FCC to wrap up its retransmission-consent review in
time to help thousands of cable operators
with retransmission deals that start
to come due in October.

He did so in a valedictory address at
the Independent Show convention in
San Francisco last week.

Retransmission reform has been atop
the to-do list for the ACA, as the lobby
group for smaller, independent MSOs
was part of the coalition that petitioned
the commission to revise its rules.

A Federal Communications Commission
official speaking on bar said
that the agency was still vetting the final comments, which came in at the end
of June, and would not have timing on a
decision until after it was finished.

GUIDANCE DUE FROM FCC

But the FCC has indicated it will at least
tweak the rules, even if it is only to provide
more guidance on what qualifies as
bargaining in good faith.

The ACA is looking for a lot more than
that.

Two weeks ago, the ACA was rebuffed
by the FCC in an effort to block the sale
of KTKA, a Topeka, Kan., ABC affiliate,
over what the association said was the
creation of a virtual triopoly that would
create too much leverage in retransmission
negotiations.

The FCC allowed the sale, but did
say the issue was a policy question that
should be left for the retransmission proceeding to address,
holding out some hope.

“Intervention is desperately needed, requiring the FCC
to ban independently owned TV stations in the same market
from engaging in collusive, coordinated bargaining,”
Friedman told his San Francisco audience, according to
excerpts from his speech.

“Forcing TV stations in the same market to bargain on
their own is crucial, because we know ACA members pay
less for retransmission consent when they negotiate with
one station at a time as opposed to two, and that the harm
is further compounded when the two are affiliates of ABC,
NBC, CBS and Fox.”

The FCC has no rules against co-owned stations or jointly
managed or operated stations negotiating collectively
for retransmission bucks, but the ACA has argued that allows
them to skirt ownership rules and
drive up operator and consumer prices,
which it said is not in the public interest.

FCC chairman Julius Genachowski
has said that he is reluctant to insert the
FCC into marketplace negotiations. But
the FCC is empowered to enforce good
faith negotiations, and the ACA and others
— notably the other members of the
American TV Alliance coalition that
includes major cable and satellite operators
— argue that must-carry and
syndicated-exclusivity rules and network-
nonduplication rules already place
the government’s thumb on the scale.
So the FCC should be free to adjust that
scale in the other direction.

“The FCC also must stop all TV stations
and the Big Four networks from
using retransmission as a weapon to
prevent ACA members from carrying
distant network signals that we have a
legal right to provide under clearly defi
ned FCC rules that go back decades,”
Friedman said.

NAB: ‘RULES AREN’T BROKEN’

“It’s amusing to hear cable operators call
for government intervention in the free
market, given their consistent pleas to
the FCC and Congress to stay out of their
business,” National Association of Broadcasters
spokesman Dennis Wharton rejoined.
“The fact is that retransmission
consent rules are not broken, as evidenced by the reality
that 99.9% of these agreements get negotiated successfully,
out of the spotlight, with no disruption in service.”

The FCC as part of its retransmission inquiry has proposed
waiving the exclusivity and nonduplication rules in
the case of retransmission impasses.

That would allow cable operators to negotiate with outof-
market stations. But it is unclear whether the FCC willl
follow up on that proposal in the final rulemaking.

Broadcasters have countered that would wreak havoc
with their business model.

November

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