Public Knowledge, Other Groups Push FCC To Find, Flex Its Retrans Muscle

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Public Knowledge, joined by the New America Foundation and The Benton Foundation, has written the Federal Communications Commission urging it to weigh in to the retrans issue with all the power they argue the agency already has at its disposal, including possibly regulating the rates broadcasters are increasingly charging for their TV station signals and mandating that they keep supplying their signals to MVPDs during disputes.
The groups also reiterated their argument for mandatory arbitration of disputes when talks break down.

In a letter to FCC chairman Julius Genachowski, the organizations thanked him for signaling that the FCC will open a rulemaking on retrans, while noting that the FCC's current rules and "actions" have been insufficient to protect the public, but that its power to rectify that is not.

They emphasize that the commission has more authority than it has been exercising, a point cable operators have been making (PK and New America joined Time Warner Cable, Cablevision. satellite companies and others in petitioning the FCC to open the rulemaking).

They say the mandate to enforce good faith negotiations and the responsibility to regulate cable rates combine to give it plenty of power.

The FCC has been reluctant to step into the middle of negotiations, despite calls from some MVPDs to take a more
active role.

The commission, under some pressure from Congress, has signaled that it plans to clarify what constitutes good faith negotiations, or the lack of them. But it could go farther in what has been termed a broad proposal/inquiry.
"If some of our broadcast rules are thought to interfere with market negotiations," Media Bureau Chief Bill Lake said
in announcing the planned rulemaking proposal last month, "we may want to look at those rules."

Cable operators have suggested that syndicated exclusivity, non-duplication and must-carry, and other rules are
thumbs on the scale for broadcasters that reduce MVPD leverage in the marketplace, though Lake did not elaborate on just what rules the FCC might look at.

Public Knowledge and the other groups point out in their letter that the FCC has found only one violation of good faith
bargaining in the past decade, and had never enforced any penalty on such conduct, but rather mandatory resumption of talks.

"The Commission has not used the regulations it already has to protect the public when negotiations break down,
despite its statutory obligation to protect consumers," they wrote. "While it is certainly likely that the Commission
would prefer forfeiture authority of greater amounts to have a more pronounced impact on these negotiations, failure
to use the authority at all sends a debilitating message to parties that might otherwise choose to comply with their
good faith obligation.

"In declining to regulate retransmission-consent rates in 1993, the Commission explained that the record at that time provided no evidence that retransmission consent negotiations would have a significant effect on consumer rates for the basic cable service tier  Seventeen years later, however, the Commission has been presented with ample evidence that abuse of the retransmission consent regime adversely impacts rates for the basic service tier," they said. "
Genachowski, in backing a congressional review of retrans, said he believed the FCC's powers were limited.
"Under the present system, the FCC has very few tools with which to protect consumers' interests in the retransmission consent process," he wrote in an October letter to Senate Communications Subcommittee Chairman John Kerry (D-Mass.), who had proposed legislation to revamp the system (he backed off that effort after the FCC announced it would propose the rulemaking). "Congress granted the FCC limited ability to encourage agreement by ensuring that the parties negotiate in good faith," Genachowski said. "But current law does not give the agency the tools necessary to prevent service disruptions."
The groups disagree. "The Commission is invested with "enormous discretion" to regulate broadcasters according to its conception of the public interest," they told the chairman. "The Commission would be well-justified to rely on these provisions to conclude that broadcast signals should be carried on in interim basis while retransmission consent is being negotiated."

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