FCC Won't Tighten Broadcaster-Pay-TV Negotiation Rules

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By Kyle Daly

July 14 — The Federal Communications Commission won't change rules governing how pay-TV providers negotiate with broadcasters for rights to provide programming, including sports events, despite pay-TV provider calls for the commission to weigh in.

Pay-TV providers, including Comcast Corp., DISH Network and AT&T/DirecTV, pay broadcasters such as Sinclair Broadcast Group Inc. and Gannett Company Inc. to bring their programming to subscribers through “retransmission consent” negotiations. But fights over rapidly rising broadcaster rates for retransmitting programming have sparked bitter disputes over programming blackouts and bickering over whether the FCC should modify the test it uses to determine if negotiations resulting in blackouts were conducted in good faith.

FCC Chairman Tom Wheeler, in a July 14 blog post, said the agency won't change the “totality of circumstances” test, which is based on a formula taking all circumstances of a negotiation into account.

Pay-TV providers argue that the FCC—in evaluating good faith—should call foul on broadcaster behaviors like blacking out stations when talks fall apart. The providers, and industry groups, have pushed the FCC to tighten its standards for what constitutes good faith so broadcasters can't use blackout threats as a negotiating tactic.

The FCC's announcement leaves the pay-TV and broadcast industries to continue wrestling over retransmission consent under existing rules.

It “is clear that more rules in this area are not what we need at this point,” Wheeler wrote. However, the FCC doesn't intend to “turn a blind eye to disputes,” he said. He also invited Congress to expand the agency's authority in the area if it sees fit to do so.

No Change to Test

Wheeler concluded that the agency's current standard for weighing the totality of circumstances is “pretty broad and ought not be constrained.”

The agency believes any significant change to the test would mean “narrowing it down,” ultimately making it less effective, Wheeler told reporters July 14.

Broadcasters welcomed Wheeler's announcement. The National Association of Broadcasters “applauds [the FCC's] conclusion that no new rules are needed,” association spokesman Dennis Wharton said in a statement.

American Cable Association President and CEO Matthew Polka said his organization is “shocked and appalled” by the decision and believes it will only “perpetuate and most likely escalate negotiating schemes that will result in consumer harm on a colossal scale.”

To contact the reporter on this story: Kyle Daly in Washington at kdaly@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

For More Information

Wheeler's blog post is available at: http://src.bna.com/gNf.

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