Broadcasters at Odds With MVPDs on Keeping Interim Carriage Agreements Voluntary
Interim agreements to continue allowing signals to be retransmitted over pay TV during retransmission or carriage negotiations should remain voluntary, and not mandated, said broadcast executives Monday. As DirecTV and Raycom continue their agreement in principle following a blackout of Raycom stations to the DBS company, some multichannel video programming distributors continue to support pending congressional legislation to mandate interim agreements during such disputes.
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After signing an agreement in principle this month to make Raycom channels available to DirecTV subscribers until a final agreement is reached, a Raycom executive warned that the broadcaster may have to end the interim agreement, according to the Gannett-owned Montgomery Advertiser.
The way that broadcasters and MVPDs negotiate doesn’t need to be remedied, said broadcast executives. As long as the parties are still negotiating, they seem to be negotiating in good faith, and there’s a reasonable expectation that at some point, there will be a resolution of the issue, some type of extension to carry the channels will be granted, he said. “The only time we wouldn’t allow an extension is when the parties are so far apart and the MVPD is indicating that it won’t come down."
It’s common to agree on financial terms and a length of time in a term agreement until the long-form agreement is reached, said Thomas Larsen, general counsel for Mediacom. All these agreements are voluntary in the sense that, unless it’s in writing from a broadcaster that the MVPD has the right to carry the content for a designated period of time, they can always just voluntarily turn it off, he said. They're usually a result of companies negotiating as the existing agreement is about to expire, he said. They'll sign a term sheet on a price, length of the term and intent, to work on a long-term agreement, he said.
American Cable Association and DirecTV again said the signal should continue to be transmitted to pay-TV customers while MVPDs and broadcasters discuss new agreements. ACA believes broadcasters “shouldn’t be able to yank signals when there is an impasse,” said a spokesman.
There should be no further interruptions, said a DirecTV spokesman. “Customers aren’t interested in being drawn any further into what should have always remained a behind-the-scenes business matter, so we will continue to finalize this agreement privately.” Interim carriage arbitration is the best solution, said John Bergmayer, a senior staff attorney at Public Knowledge. Raycom had no comment.
Anytime there’s a breakdown in negotiations, it underscores the need for some form of consumer relief, said Larsen. That relief can be interim carriage, arbitration or the provisions in the Local Choice Act, he said, referring to the bill introduced by Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., and ranking member John Thune, R-S.D. (CD Aug 11 p12). Consumers are harmed in these blackouts and they have no real protection from them, Larsen said. Getting out of a contract and switching equipment don’t seem to make a ton of sense, he said.
Supporters of the existing retrans model said granting extensions or having interim agreements are common practice, so no regulations forcing them are needed.
For there to be a provision or government-mandated carriage while negotiating doesn’t make sense, said a broadcast executive. If the MVPD knows it has carriage throughout negotiations, “then it removes all incentive on it to negotiate,” he said. “People who are suggesting it [mandate] are people who don’t understand how the world of negotiating contracts works."
Hundreds of deals are settled every year that don’t involve disruptions, said a broadcast industry official. The problem doesn’t start with the reaction to the dispute, he said. The problem is the negotiations and how they're being handled between the two parties, he said. It’s disingenuous for an MVPD to argue there’s a crisis when it agreed to a deal in principle and is “slow-footing in signing a deal,” he said.