Retrans Consent Concerns Dominate Replies to White Paper on Video, Communications Act
USTelecom wants Congress to revamp the Communications Act to give the FCC a bigger enforcement role, in which it’s “adjudicating disputes in the video arena” based on standards it has laid out. The association gave the House Communications Subcommittee the recommendations in response to a December white paper the subcommittee issued as part of its Communications Act update process. Responses were due Friday, and stakeholders were just beginning to file. Concerns over retransmission consent fees dominated early submissions from pay-TV industry stakeholders.
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“Traditional competition law and principles can and should play a larger role in the handling of complaints over negotiations for both retransmission consent and access to content more generally,” USTelecom said. “Instead of allowing broadcasters to exploit their government-granted spectrum to extract higher and higher retransmission consent fees ... or allowing non-broadcast content owners to use those tactics to mask what in traditional antitrust law would be examined more closely as unreasonable refusals to deal, questionable exclusive dealing arrangements, illegal tying, and related anticompetitive ploys, an updated Communications Act should focus instead on ensuring that competitive video providers have reasonable access to programming, regardless of its source.” The association said its members face barriers in video including franchise rules, in addition to programming issues.
Other stakeholders were still submitting their comments at our deadline. Netflix is not filing any comments, a spokeswoman told us. NAB was planning to submit comments later, a spokesman said. NAB has traditionally defended the retrans system as working well and pushed back against the pay-TV companies criticizing the business model. Neither AT&T nor DirecTV were filing directly, spokespeople said. Comcast is also not filing directly, a spokeswoman said, instead relying on NCTA to submit comments. An NCTA spokesman didn’t supply the association’s comments by our deadline Friday.
“Over the last four years, the retransmission fees paid by CenturyLink have grown approximately 145 percent, ranging from increases of 20 percent to 733 percent depending on the broadcast station,” CenturyLink said. It said lawmakers should “take a deregulatory approach under which the 1992 Cable Act would be amended to allow providers the right to carry national programming from an adjacent or alternate market or source during a broadcast retransmission consent negotiation breakdown. The balance of negotiating power between broadcasters and MVPDs could be at least partially restored by amending the law to allow video providers to carry national broadcast programming from an alternate market or source and to otherwise prohibit marketplace activity that has the result of effectively limiting access to such alternate markets or sources during a broadcast retransmission negotiation impasse.”
NTCA attacked the retrans system. “Ultimately, it is consumers that pay the price in ever-increasing rates and frequently the loss of programming and access to on-line content as they are held hostage to broadcasters’ abuse,” NTCA said. It criticized “programmers of all kinds” for practices of “forced tying” and “forced tiering.” NTCA wants Congress to “interject market forces into the retransmission consent regime” and criticized FCC non-duplication and syndicated exclusivity rules. It lamented a lack of transparency of the current system and wants the creation of a standstill provision. NTCA cited Local Choice, an unsuccessful Senate broadcast a la carte proposal from the last Congress, as “one possible solution” worth resurrecting in the new Congress.
The Free State Foundation decried the Communications Act’s public interest standard as “unfit” for the modern video mark. “Basic tier cable channel requirements, basic tier cable rate regulations, program carriage mandates, and must-carry and retransmission consent rules should be eliminated, albeit with reasonable transition periods to allow time for adjusting existing arrangements and protecting reliance interests,” Free State said. Regulation should be mostly limited to “findings of consumer harm and market power,” it said. The FTC should assume “jurisdiction over consumer privacy matters related to digital video services,” Free State said.
This white paper is the sixth that House Republicans issued since announcing their desire to overhaul the Communications Act in December 2013. Senate Republicans have also voiced interest in beginning such a process this year. Committee Republicans typically post responses to their white papers days after the response deadline.