Bill Seeks to Grant FCC Authority to Stop Blackouts

Rep. Eshoo takes aim at reforming retransmission consent

Rep. Anna Eshoo (D-Calif.), ranking member of the House subcommittee on communications and technology, just made Wednesday's upcoming hearing interesting by publishing a discussion draft of a bill intended to eliminate TV blackouts caused by retransmission consent disputes.

The bill, nicknamed the Video CHOICE Act (for Consumers Have Options in Choosing Entertainment) would give the Federal Communications Commission explicit authority to intervene in carriage disputes by granting interim carriage of a TV broadcast station during a negotiation impasse.

It's no surprise that Eshoo introduced the bill Monday, a week after CBS and Time Warner Cable ended a 32-day negotiation standoff that left more than 3 million consumers without CBS stations in markets such as New York, Los Angeles and Dallas. During the blackout Eshoo said she would "carefully examine whether changes to current law are needed to adequately protect consumers and prevent the reoccurrence of blackouts."

The goal of the discussion draft is to encourage other lawmakers to start collaborating on the draft, said an Eshoo staffer. Though there are no cosponsors for the bill now because it hasn't been formally introduced, the hope is that Wednesday's hearings will generate some interest.

Titled "innovation versus regulation in the video marketplace," Wednesday's hearing was already destined to have at least some discussion of retransmission consent, thanks to scheduled testimony from retrans reform advocate Stanton Dodge, Dish Network's evp and general counsel. Dodge and other reform advocates have been laser-focused on piggybacking on the reauthorization of the Satellite Television Extension and Localism Act (STELA) as an opportunity to call for more reform. 

But Eshoo's discussion draft practically guarantees the entire hearing could focus on retransmission consent, much to the delight of retrans reform advocates, such as the American Cable Association and the American Television Alliance, which quickly sent out statements of support praising the draft.

In addition to giving the FCC authority to stop a blackout, the bill would also prohibit TV stations from bundling other stations or programming channels as a condition for carriage. It also calls for the FCC to study the impact of sports programming costs–the priciest programming for any pay TV service–and to examine whether the blocking of a TV station's online content during a retrans negotiation constitutes a failure to negotiate in "good faith." (CBS blocked its online content during its standoff with Time Warner Cable.)

Broadcasters are already cranking up objections to Eshoo's discussion bill, which would seem to tip the scales in favor of cable and satellite providers.

"It is troubling that a proposal billed as 'pro-consumer' continues to allow pay-TV providers to avoid viewer rebates for loss of broadcast TV programming during a disruption. Coincidentally, the draft bill is also silent on ending the practice of charging consumers upwards of $200 in 'early termination fees' to shift to another pay-TV provider during a disruption," said Gordon Smith, president and CEO of the National Association of Broadcasters. "Time Warner Cable, DirecTV and DISH are spending millions in Washington manufacturing a crisis over retransmission consent, when in fact it is these three companies responsible for nine out of 10 disruptions of service.