FCC Looking to Hill on Retrans as One Blackout Ends, Another Averted
The FCC is looking to Capitol Hill for action on retransmission consent rules, perhaps by new legislation, instead of acting now on the issue, officials at and outside the commission said Monday. Almost 15 days into their retrans dispute, Cablevision and News Corp. over the weekend ended a blackout, restoring Fox TV stations as well as several cable channels to the cable operator’s subscribers. Fox and Dish Network averted a separate retrans blackout Friday, signing a long-term deal. With those negotiations wrapped up for now, the commission doesn’t seem poised to take regulatory action on the issue, FCC and other officials said.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
No rulemaking proposal is before commissioners on a petition from 14 cable, telco, DBS and non-profit entities for changing retrans rules, FCC officials said. The regulator also doesn’t seem about to issue any other type of ruling about deals between TV stations and subscription-video providers, they said. They said that a letter from Chairman Julius Genachowski to Sen. John Kerry, D-Mass., saying he agrees with the senator that it’s time for Congress to consider retrans rules may be about the extent of what Genachowski is going to do on the matter for now. An FCC spokeswoman declined to comment.
"Under the present system, the FCC has very few tools with which to protect consumers’ interests in the retransmission consent process,” Genachowski wrote Kerry Friday. That was a response to an Oct. 19 letter to Genachowski from Kerry, who said he plans retrans legislation (CD Oct 20 p1). A similar response to Sen. Frank Lautenberg, D-N.J., is at http://xrl.us/bh6hig. “I agree with you that recent events raise issues of real concern,” Genachowski wrote both members of the Senate Commerce Committee. “Current law does not give the agency the tools necessary to prevent service disruptions.
"Accordingly, I believe that it is time for Congress to revisit the current retransmission law and assess whether changes in the marketplace call for new tools to strike the appropriate balance of private negotiations and consumer protection,” Genachowski continued. “Such tools might include, for example, mandatory mediation and binding arbitration, which could prevent the kind of unfortunate stalemate that now exists between Cablevision and Fox.” That letter “made it clear” the FCC agrees “Congress must revisit the current retransmission law and assess whether changes in the marketplace call for reform,” Kerry said. “We can fix a broken system for the long term."
With “giants” fighting on retrans, it’s hard to predict what lawmakers will do on deals between broadcasters and pay-TV providers, said Legal Director Harold Feld of Public Knowledge. It’s one of the 14 groups seeking changes to FCC handling of retrans disputes. “It’s hardly out of character for this FCC to sort of say `thank God that’s over’ and hope the problem doesn’t come up again for another three years,” Feld said. “If you go back to what issues people were predicting would languish when Genachowski was named [chairman] in 2009, most people would have expected them not to do much on cable.” That’s largely held true, except in the AllVid proceeding on devices to link consumer electronics to all pay-TV providers, Feld said.
Dish’s deal late Friday with Fox (CD Nov 1 p10) is a “long-term contract,” a spokeswoman for the DBS provider said. Cablevision and Fox spokesmen declined to say for how long their deal, announced Saturday night, will last. Their agreement in principle covers Fox stations WNYW New York and WTXF Philadelphia, MyNetworkTV affiliate WWOR Secaucus, N.J., cable channels Fox Deportes, Fox Business Network and Nat Geo Wild, the companies said.
"In the absence of any meaningful action from the FCC, Cablevision has agreed to pay Fox an unfair price for multiple channels of its programming including many in which our customers have little or no interest,” a spokesman for the cable operator said. “Cablevision conceded because it does not think its customers should any longer be denied the Fox programs they wish to see.” The NAB believes “one sure way to cause more disruptions than the very few that you see would be to get government involved in this,” a spokesman said. “The reason there are incredibly few disruptions in service is because both sides have tremendous incentive not to be off the air."
"Fox played hard ball and won,” analyst Marci Ryvicker of Wells Fargo wrote investors. The carriage deals are “modest negatives” for Cablevision and Dish “but a positive” for Comcast’s deal to buy control of NBC Universal because it may avert the blackout from factoring into government review of the merger, she said. But Feld said the FCC is “going to have to deal with it” in Comcast-NBC Universal.
Fox’s accords with Cablevision and Dish “will ease some of the recent pressures for government intervention” in retrans, Stifel Nicolaus analysts wrote investors. There could be “some political fallout from the viewing interruptions” including on commission and Justice Department review of Comcast-NBC Universal, they said. Subscriber gains during the Cablevision-Fox blackout for pay-TV services from AT&T, DirecTV and Verizon likely were “limited,” Bernstein Research said. “To be sure, Verizon and DirecTV will likely to continue to add subscribers, as they work through a backlog that will make Cablevision’s final subscriber losses larger as time goes on.”