FCC Preserves Retrans 'Good Faith' Provision

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The Federal Communications Commission has amended its rules to extend the good faith requirement in retransmission-consent negotiations until March 1, or longer if Congress moves a related sunset date. But the FCC had to work fast.

That provision [325(b)(3)(C)(ii) of the Communications Act for those keeping track] prevents broadcasters "from engaging in exclusive contracts for carriage or failing to negotiate in good faith."

It is not exactly clear what the FCC defines as good faith, but the issue has been heating up of late due to retrans fights between a number of Fox broadcast and cable properties and Time Warner Cable and Sinclair Broadcast Group and Mediacom Communications, respectively.

The good faith/nonexclusive bargaining rule had been expected to be extended, along with the satellite copyright license to import distant network TV station signals, as part of the reauthorization of the Satellite Home Viewer Extension and Reauthorization Act (SHVERA).

But a revised satellite bill got hung up and Congress extended the SHVERA bill until March 1 as a stop-gap measure. That came as an amendment to the Defense Appropriations Act, which only passed Dec. 19. The FCC then needed to move the retrans bargaining sunset date to March 1 or it, too, would have expired.

Without that extension the requirement that TV stations not enter into exclusive contracts for carriage (say cutting out satellite operators in favor of cable) or that they negotiate in good faith would have expired on Dec. 31.

That, in turn, could have had major implications for future retrans fights Mediacom, for example, has argued that Sinclair is not bargaining in good faith, and Time Warner has taken aim at Fox.

If a new satellite bill has not been agreed to by that March 1 date and Congress again extends the SHVERA sunset date, the FCC sunset of the good faith/nonexclusive bargiaining rule will autmoatically move right along with it.

The FCC said it was not providing time for comment on amending the sunset date because it didn't have the time.

"We are amending these rules without providing prior public notice and comment because prior notice and comment would be impracticable in this case," the FCC said in an order released Tuesday. " Section 1003(b) of the Department of Defense Appropriations Act, 2010 was enacted on December 19, 2009, less than two weeks before the sunset date of January 1, 2010. This provides the Commission with an insufficient amount of time to publish a Notice of Proposed Rulemaking in the Federal Register, to allow time for meaningful comment, and to consider those comments before taking the necessary actions..."

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