Fight Ahead on Broadcast Exclusivity Rule

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By Lydia Beyoud

Aug. 12 — FCC Chairman Tom Wheeler circulated a package of items Aug. 12 intended to help the FCC meet a Sept. 4 statutory deadline to open proceedings required under last year's reauthorization of the nation's satellite TV laws, according to an FCC blog post.

Several contentious items required by the Satellite Television Extension and Localism Act Reauthorization (STELAR) Act of 2014 already have been taken up by the Federal Communications Commission, such as streamlining the effective-competition filing process for cable operators. As the commission moves further into the area of modifying its video market and retransmission consent rules under STELAR, broadcasters, cable groups and other video market companies are expected to ratchet up the pressure on the commission over policy changes.

One of the most controversial of Wheeler's latest proposals is likely to be an order to remove the FCC from the process of enforcing exclusivity contracts between in- and out-of-market broadcast affiliates during retransmission disputes. The National Association of Broadcasters immediately struck back at the proposal, saying the FCC's role is vital to protect “localism” for local media content.

Wheeler: ‘Thumb off the Scales.'

The rules would prevent cable and satellite multichannel video programming distributors (MVPDs) from providing out-of-market broadcast stations when a local channel has been blacked out during a retransmission consent dispute. The FCC adopted a further notice of proposed rulemaking (FNPRM) on the rules in March 2014.

“In this item, the Commission takes its thumb off the scales and leaves the scope of such exclusivity to be decided by the parties, as we did in the Sports Blackout Order last year,” Wheeler said.

NAB decried the order, saying the network non-duplication and syndicated exclusivity rules are a “lynchpin of the local broadcast business model” and help sustain free local news and lifeline information.

While broadcasters hate the idea, the proposed order wouldn't be a major boon to cable providers either, said a cable industry source, speaking on background.

“Unfortunately, Wheeler’s proposal will not make cable great again. Cable companies would still need retransmission consent from out-of-market network stations and that is highly unlikely when the Big 4 networks are constantly intervening to block their TV station affiliates from granting retransmission consent beyond their home markets today,” the cable source said. “It's essentially a status quo move and the broken retransmission consent regime will continue to bleed consumers,” the source said.

STELAR Provisions

The Satellite Television Extension and Localism Act Reauthorization (STELAR) Act of 2014 required the FCC to open a proceeding to review rules regarding the satellite, cable, and broadcast television markets.

STELAR also required the FCC to begin a review of its “totality of the circumstances test,” one part of the commission's two-pronged framework for evaluating good faith negotiations in retransmission consent deals.

Wheeler circulated a notice of proposed rulemaking that proposes (NPRM) “a robust examination of practices used by parties,” particularly in light of recent retransmission consent negotiations. The goal of the NPRM “is to ensure that these negotiations are conducted fairly and in a way that protects consumers,” Wheeler said.

Satellite Parity for ‘Orphan Counties.'

Under STELAR's market review mandate, Wheeler proposed to adopt a process for satellite TV providers to seek modification of a TV station's designated market area (DMA) to address the problems faced by residents of “orphan counties” near state borders. Cable companies are already allowed to petition the FCC for modification of a DMA.

The FCC unanimously approved an NPRM to implement Section 102 of STELAR on March 26 so that households can receive local news, weather emergency information, election results and local sports broadcasts from their state, even if they are included in a broadcaster's DMA from another state.

Local governments would also be able to petition for modification of DMAs for satellite companies, though broadcasters must still grant consent in all cases, Wheeler said.

Contest Rules Could Move Online

Two far less controversial items Wheeler teed up for a vote were a proposal to allow broadcasters to post the terms of station-run contest rules online, instead of over the air.

Republican Commissioner Michael O'Rielly spearheaded the effort. An NPRM on the proposal received unanimous support from the commission Nov. 21. 

Wheeler also put out a recommendation to adopt several proposals discussed in a 2013 AM radio revitalization NPRM, with an attached FNPRM and a notice of inquiry on additional updates for AM radio rules. Democratic Commissioner Mignon Clyburn and Republican Commission Ajit Pai have both been active on the issue.

“This comprehensive set of actions modernizes our rules to keep them in line with the public interest in an ever-changing marketplace, and will help to ensure the continued vitality of AM radio,” Wheeler said.

To contact the reporter on this story: Lydia Beyoud in Washington at

To contact the editor responsible for this story: Heather Rothman at

Text of Wheeler's blog post is at

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