FCC Will Consider Forcing Broadcasters, Distributors to Play Nice

Bowing to pressure from retransmission reform advocates and Sen. John Kerry, D-Mass., the Federal Communications Commission on Thursday unanimously agreed to open up a review of the rules that govern the negotiations among broadcasters, programmers and pay TV distributors.
Though more than 99 percent of all such negotiations are settled quietly and without incident, a few recent high-profile disputes have led to blackouts. Not lost on the commissioners was the looming possibility that LIN Media’s stations could go dark on DISH Network by the end of the week.
The FCC is seeking comment on proposals that would clarify what constitutes “good faith” negotiations between parties and suggests improving notice to consumers in advance of service disruptions caused by standoffs. In addition, the commission is asking about the possibility of eliminating the rules that prevent distributors from importing stations and programming from outside the local market.
Because of the FCC’s limited authority to directly prevent blackouts, the commission is treading lightly. It’s unlikely to drastically change market conditions by cutting into broadcasters’ revenue from retransmission fees.
Retransmission reform advocates, led by distributors like Time Warner Cable and DISH Network, had advocated more drastic measures, such as requiring binding arbitration and compelling stations to allow carriage when parties cannot agree on a new retransmission agreement.
“It’s not everything we were looking for, but it’s a big step forward,” said a spokesman for the American Television Alliance, a group of cable and satellite TV companies that petitioned the FCC last year to open up a proceeding on retransmission reform. “At least they’re acknowledging there is a serious problem.”
Up until now, the FCC has avoided taking any action in retransmission spats beyond putting out press releases urging the parties to play nice and be mindful of the public interest. But last fall, when News Corp. and Cablevision came to blows, leading to a blackout that lasted 15 days and prevented 4 million viewers from seeing some broadcasts of the World Series, Kerry jumped in with draft legislation and hearings. A month later, FCC Media Bureau Chief Bill Lake publicly promised to put retransmission reform on the commission’s agenda in first quarter.