Video services

FCC Looks to Reform Retrans Rules

There's a lot of money at stake in content licensing agreements, and when negotiations go south, it's not only the big guys who lose out.

To protect consumers from TV blackouts, Federal Communications Commission (FCC) chairman Tom Wheeler is in the process of circulating an order that would give pay-TV providers the ability to import an out-of-market broadcast signal if a local broadcaster decides to withhold content. The move would replace existing "exclusivity rules" regulating out-of-market broadcasts and would substantially tip the balance of power in retransmission negotiations toward pay-TV providers.

"These rules prevent an MVPD from providing subscribers an out-of-market broadcast station, for example, when a retransmission consent dispute results in a local station being dropped from carriage," said Wheeler in a blog post. "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. In so doing, the Commission would take 50-year-old rules off our books that have been rendered unnecessary by today’s marketplace."

With the rapid rise of broadcast licensing fees in recent years, pay-TV operators have been clamoring for the FCC to take up retransmission reform. According to SNL Kagan (as reported by the American Television Alliance), retransmission rates for broadcast networks will hit $6.3 billion in 2015 and rise to $10.3 billion by 2021. Rep. Anna Eshoo (D-CA) once called the business "frankly a racket," and the American Cable Association (ACA) has made retransmission consent one of the top issues on its regulatory agenda. (See Rep. Rips Retrans 'Racket' .)

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Not surprisingly, the National Association of Broadcasters (NAB) is less than pleased with Wheeler's latest plan. In a statement responding to the chairman's blog post, the NAB declared that:

"Exclusivity rules are a linchpin of the local broadcast business model and help sustain viewer access not only to high-quality network entertainment programming, but also to local news and lifeline information. The order currently circulating at the Commission imposing changes to these rules would threaten the vibrancy of our uniquely free and local broadcast system. NAB strongly opposes this order that would ultimately cause harm to consumers and their reliance on localism.

Beyond the order on exclusivity rules, Chairman Wheeler also circulated a notice of proposed rulemaking (NPRM) to "review the so-called 'totality of the circumstances test' for good faith negotiations over transmission of broadcast TV signals," suggesting he wants the FCC to look at negotiations even beyond the blackout issue. He noted that the Commission will evaluate negotiation practices and attempt to ensure that they are handled fairly "and in a way that protects consumers."

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

kq4ym 8/27/2015 | 11:08:00 AM
Re: Others could benefit Always interesting to see the squabbles between the NAB folks and everyone else trying to get a toe into the business. Whether there will ever be a peaceful solution is up in the air. I'm not so sure of their claim the move will "ultimately cause harm to consumers and their reliance on localism." Other than local news an hour or so daily, what's really local in broadcast tv today?
msilbey 8/14/2015 | 11:13:14 AM
Re: OTA Ah yes! Had thought it was Adam who tried out the product. Wasn't there some newer version that launched recently, or am I misremembering?

btw- welcome to the message boards :)
DaveZNF 8/14/2015 | 10:02:19 AM
Re: OTA You mean THIS DVR+? ;) 

But, yes, OTA reception is an issue for many. My fortunes shifted (unfavorably) with the digital transition as the ATSC HD that was squatting on UHF moved to VHF. Or maybe it's the other way around. The end result was worse receptivity and with HD, vs NTSC, it's that "digital cliff" -- there's no intermediate grainy picture, you get reception or you don't. At my current location, I'd need at least an attic antenna if not rooftop for complete coverage... along with rewiring my house to distribute that signal. No receptivity considerations was Aereo's killer feature. 

TiVo and Channel Master are doing interesting things in the way they merge OTA and OTT content. The former with OnePass and the latter with Linear Channels. But there's still room for better unification... irrespective of whether it's online-only like Apple is supposedly trying to do, or by merging OTA via antenna like DISH (in some cases).
msilbey 8/14/2015 | 9:44:40 AM
Re: Others could benefit Aren't you the same guy who's had so much trouble getting OTA signals at your house?! OTOH, I agree we should be seeing more comingling of OTA and premium TV. You tried out Channel Master DVR+ yet?
DaveZNF 8/13/2015 | 7:22:34 PM
Others could benefit

Adjusting retransmission criteria for local broadcasts could also facilitate newer players in this space. For example, Sony's over-the-top streaming service is rolling out piecemeal (geographically) largely due to needing to strike deals in every market. Further, the rumored Apple TV video service that is now rumored delayed is rumored to be partially stymied by retransmission and licensing. What I don't get is why these folks don't just stick ATSC OTA tuners in their boxes and commingle the antenna content with the 'cable" content. Isn't that how DISH handles the locals in some markets? This obviously wouldn't apply to out of market stuff and perhaps there are other factors at play that I'm just not aware of. 

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