McDowell: FCC Should 'Think Twice' Before Refereeing Retrans Marketplace

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FCC commissioner Robert McDowell said the commission should "think twice" before stepping into the retransmission- consent fray.

The remark came during a speech to the Virginia Association of Broadcasters Friday in Virginia Beach, Va.

Broadcasters have argued that the system is working just fine, while cable operators maintain it favors
broadcasters, a group increasingly interested in collecting more money for the transmission of their signal. In turn,those fee increases translate to consumers paying more at the multichannel video pump, as it were.

"In my view, the Commission should think twice before taking any action that may interfere with private contracts regarding the carriage of broadcast programming by multichannel video programming distributors," he said. "Among my concerns is our statutory authority in this area. Section 325 of the Communications Act explicitly directs us to act only to preserve "good faith" in the bargaining process, and does not require any particular outcome. The statute also plainly states that merely asking for more money does not constitute bad faith."

McDowell said it was unclear what the impact of fees on cable prices is. For their part, broadcasters aver that there is no direct correlation, while cable operators obviously believe there is. McDowell cited a study that found that only one-third of a consumers' cable bills was driven by programming costs, and only 2% of that by the cost of TV station signals.
He would welcome guidance from Congress and in the meantime was meeting with his legal team and
interested parties on the issue. Given that some petitions are asking for a Notice of Proposed Rulemaking,
he said he doubted he had heard the last about the issue.

McDowell also noted he was "interested in exploring" possibly transferring some of broadcasters spectrum to
wireless so long as it is "truly voluntary." He said he was eager to hear arguments on both sides, and said the FCC has "a way to go" before anything can happen.

But he pointed out that movement was underway, including the engineering forum at the FCC Friday with broadcasters to hammer out some of the technical issues with reclaiming spectrum, and repacking and sharing what remained.

The FCC's timetable is to issue a rulemaking on reclamation within the next three months.

He called on his audience to weigh in with "hard facts and data" on the issue, and also said he thought the commission should look seriously at ways under current law for broadcasters to make more spectrum available to wireless broadband by leasing it.

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