Updated: FCC Entering Retrans Debate?

The Federal Communications Commission is planning to open up a proceeding on retransmission consent negotiation rules governing how broadcasters and cable companies determine value for signal clearances. Bill Lake, the FCC’s media bureau chief, delivered the news Wednesday (Dec. 8) during a lunch at the Media Institute, the FCC confirmed.

There is no timing for when the FCC could put the notice of proposed rule making on its agenda, but it is likely to come early in the new year.

The FCC has previously avoided taking on the retransmission consent rules established by Congress in the 1992 Cable Act, but pressure has been mounting on the FCC to get involved.

“We’ve looked carefully at all the input we’ve received. The impasse in October between Fox and Cablevision focused attention on one aspect of the issue: what power do we have to prevent service interruptions for consumers, when parties fail to agree?” Lake said. “We hope that a rule making will help us to find the most constructive role we can play to protect consumers under the retransmission law as it now exists,” Lake said.

The FCC could be feeling the heat from Sen. John Kerry (D-Mass), who as chairman of the Subcommittee on Communications, Technology and the Internet held a hearing soon after the 16-day standoff between Cablevision and Fox. Kerry also drafted legislation that would keep signals from being pulled during a dispute and compel companies to use arbitration in extreme situations.

But now that the FCC is diving into the issue, Kerry said he would not introduce his legislation. “I will work with the FCC and appreciate the agency listening and acting to foster a better dialogue and a more rational system,” Kerry said.

News that the FCC would open a notice of proposed rule making on retransmission consent brought out a flurry of kudos from Kerry and others working for reform of the rules, such as the American Television Alliance, which filed a petition with the FCC requesting a rule making on the rules, and Cablevision, which continually requested government intervention during its dispute with Fox.

The FCC’s action could open up another turf war with Congress, at least on the House side, where incoming chairman of the Energy and Commerce Committee Fred Upton (R-Mich.) warned the FCC the committee would take seriously its oversight role. He already put the commission on notice for its order on net neutrality.

“After two years of inaction, the Energy and Commerce Committee will be quite active in fulfilling the oversight responsibilities our Founding Fathers expected. The FCC will be prominently featured and chairman Genachowski will soon be a familiar face on Capitol Hill,” Upton said.

TV groups were caught by surprise, but are already girding to defend the current rules, which have resulted in a dependable revenue stream contributing more than $1 billion in 2010, per SNL Kagan.

“Injecting Washington into private business negotiations that have a 99 percent success rate only serves to embolden pay-TV companies. If the pay-TV giants succeed, there will be further migration of premier sporting events like the Super Bowl away from free TV, and a reduction in financial resources that sustains quality foreign language programming, local news and entertainment to a growing audience of more than 30 million Americans who rely exclusively on over-the-air television,” said Gordon Smith, president and CEO of the National Association of Broadcasters.