FCC Ends 40-Year-Old Sports Blackout Rule, Adopts NPRM on Satellite Rules

The action may not eliminate all sports blackouts, but the NFL “will no longer be entitled to the protection of the commission’s sports blackout rules,” the FCC said of the rule elimination. There’s no better example of an FCC rule that has outlived its usefulness than the sports blackout rule, said Chairman Tom Wheeler. Today, the NFL is an entertainment powerhouse, “generating nearly $10 billion a year, mostly from TV revenue,” he said. “Clearly, the NFL no longer needs the government’s help to remain viable. ... We at the FCC will not be complicit and prevent sports fans from watching their favorite teams on television.” Wheeler said he hopes it leads to the elimination of sports blackouts altogether.

The commissioners rejected arguments from NFL and other rule supporters that without the rule, football games would move from broadcast TV to pay-TV. The NFL’s contracts with over-the-air broadcasters extend until 2022, Commissioner Ajit Pai said. Television contracts, not gate receipts, “make up a substantial majority of the NFL’s revenues nowadays,” he said. Pai urged the NFL to view the decision as an opportunity to revisit the blackout policy with fans, and to adopt a more “fan-friendly” approach, he said.

The NFL maintains games on ad-sponsored broadcast TV “because at this time, it is in the NFL’s best financial interest,” said Commissioner Mike O'Rielly. Today’s item means that the FCC “will no longer be complicit in helping continue such a flawed policy,” he said. He urged the commission to look for more opportunities “to remove or repeal rules that can be addressed by legal remedies or other methods available to the private sector,” O'Rielly said.

Clyburn credited the action with removing “unnecessary and outdated regulations,” and “by abandoning regulatory enforcement of the NFL’s private blackout policy,” she said. The decision “will take the public policy finger off the scale of being a party to any future blackout,” she said. Commissioner Jessica Rosenworcel said she hopes leagues that rely on the rule will find a solution to avoid blackouts.

The NFL assured that the FCC’s decision will not change the league’s commitment to televising every game on free, over-the-air television, the NFL said in a statement. “NFL teams have made significant efforts in recent years to minimize blackouts."

Capitol Hill Stirring

Legislation also is needed to address sports blackouts, said members of Congress.

The agency vote “is by no means a final victory,” Sen. Richard Blumenthal, D-Conn., told reporters during a press call Tuesday before the FCC meeting. He introduced in November the Furthering Access and Networks for Sports Act, also known as the FANS Act (S-1721) and backed by Sen. John McCain, R-Ariz., which tackled sports blackouts by removing the NFL’s antitrust exemption. Blumenthal spoke along with Rep. Brian Higgins, D-N.Y., author of companion House legislation, and Sports Fans Coalition Chairman David Goodfriend. “We need the FANS Act to finally rule out of bounds the NFL’s anti-fans blackout policy,” Blumenthal said, suggesting he and Higgins will “use this decision as momentum and impetus” to find more co-sponsors. “Momentum is on our side.”

"We'll look for an opportunity in the lame-duck” session of Congress in November and December, whether for stand-alone passage or through another vehicle, Higgins said. The legislation “forces the league to take very seriously the will of Congress,” he added.

Blumenthal said “almost any measure” faces an uphill battle in the Senate but said Congress has multiple pieces of must-pass legislation to which it may be able to attach the bill. “I don’t want to prejudge what may happen,” Blumenthal said of the possibility of attaching the FANS Act to Satellite Television Extension and Localism Act reauthorization. Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., is “very open-minded and very pro-consumer,” Blumenthal said, saying he’s “respectful” of Rockefeller’s wishes on STELA regardless. The Sports Fan Coalition also said it’s just “part of the battle” and plans to lobby for the end of the NFL antitrust exemption, the passage of the FANS Act, conditional funding of sports stadiums to include benefits for fans and work with domestic violence victim professionals, Goodfriend said.

"Today’s vote moves the ball down the field, but there’s still much work to be done to root out all of the various causes of sports blackouts,” McCain said in a statement. “I urge the NFL to rescind its policies that continue to allow blackouts, or else Congress will act on this issue."

Blumenthal, Goodfriend, Higgins and McCain praised the FCC vote. It’s “a major victory for sports fans,” Blumenthal said of the “long overdue” decision, slamming the “unnecessary and outdated” rules. “It gives all of professional sports a black mark.” The NFL “is not only on its heels, it’s on its back, morally and politically,” Blumenthal said. Economists have discredited the notion that sports blackouts ultimately help attendance, Higgins said, saying it’s clear the league does not want to be told what to do. “The era of government writing blank checks to sports leagues is over,” said Goodfriend, who has lobbied and worked for Dish Network. Sen. Cory Booker, D-N.J., also issued a statement calling the vote “a big win for sports fans everywhere.” Some lawmakers disagree -- members of the Congressional Black Caucus had urged the FCC to retain the sports blackout rule in a recent letter (CD Aug 21 p11). A spokeswoman for the caucus declined comment Tuesday.

Sports Fans Coalition and Public Knowledge applauded the FCC action, after the groups petitioned for the elimination. Sports Fans Coalition will keep the momentum going by pursuing an elimination of sports leagues’ anti-trust exemption for imposing local blackouts, enacting the FANS Act, and other initiatives, it said in a statement. The NFL and broadcasters might still be able to use private contracts to restrict viewer access to programming, “but it should be clear that these restrictions are driven by business considerations and not public policy,” Public Knowledge said in a statement (http://bit.ly/1rC2mT5).

ITU Application Relief

The FNPRM for Part 25 rules for satellites and earth stations follows a report and order on other such rules adopted last year, the International Bureau said at the FCC meeting. The further NPRM addresses significant proposals, including proposals implementing recommendations made in the report and order, said Jose Albuquerque, Satellite Division chief. Applicants will be allowed to file for orbital locations and frequencies with the ITU early in the application process, he said. An earlier ITU filing will place applicants in a better position to coordinate with other parties that are competing for the same resource, he said. There are proposals on simplifying showings associated with milestone requirements and eliminating other such requirements, he said.

Other proposals are aimed at adjusting the two-degree spacing obligation, Albuquerque said. These rule adjustments can accommodate users of small earth stations, including direct-to-home providers, earth stations on vessels and on aircraft, he said.

Clyburn called the proposals “wise.” ITU recognition is a must for a successful satellite network operation, she said. Restrictions on ITU filings place U.S. satellite companies at a competitive disadvantage, she said. A proposal in the FNPRM aptly addresses the concern that competitors can monitor the FCC’s space station applications, and the ability of foreign operators to secure ITU priority over their U.S. license counterparts, she said. Pai supported the FNPRM’s inclusion of a recommendation by Boeing that reduces the burden of the FCC milestone review process, he said. The item explores several ways to do just that, he said.

More refined regulations will enhance the ability of U.S.-licensed satellite operators “to more quickly and efficiently bring cutting-edge satellite services to consumers of broadband and media solutions,” Intelsat said in a statement. The proposals in the FNPRM will reduce the regulatory burden on the satellite industry and enhance the industry’s ability to provide innovative satellite services to U.S. consumers more quickly and efficiently, the Satellite Industry Association said in a news release (http://bit.ly/1yyhWW6). ,