FCC Moves to End Sports Blackout Rule

The FCC moved closer to eliminating the agency’s 40-year-old sports blackout rule, drawing the ire of broadcasters who say such a move will only speed the migration of major events to cable and satellite pay platforms.

On Wednesday, the agency released a notice of its proposed change, an indication that at least for now there is enough support among the five commissioners to eliminate the rule. There will now be a 60-day period for the public to file comments and response to comments on the proposed change.

The rules allow for sporting events to be “blacked out” in a market if it is not available on a local station, meaning that cable and satellite companies are prevented from carrying the signal of a distant station that is carrying the event.

The change still would not prevent sports leagues from negotiating their own private agreements for blackouts with broadcasters.

“We recognize that elimination of our sports blackout rules alone might not end sports blackouts, but it would leave sports carriage issues to private solutions negotiated by the interest parties in light of current market conditions and eliminate unnecessary regulation,” the FCC said.

The rationale for the rule was to help out teams that struggle to fill seats, but critics have said that the regulation is outdated. The blackout rules have been a bane to hometown fans of sporting events, some of whom would trek to other market areas just to gain reception to key games.

But Dennis Wharton, spokesman for the National Assn. of Broadcasters, said that sports blackouts are “exceedingly rare.” “We’re concerned that the FCC proposal may hasten the migration of sports to pay-TV platforms, and will disadvantage the growing number of people who rely on free, over-the-air television as their primary source for sports.”

The NFL and Major League Baseball have opposed the elimination of the rule. Separately, Sen. John McCain (R-Arizona) and Sen. Richard Blumenthal (D-Conn.) have proposed eliminating the antitrust exemption for sports leagues if they do not stop including sweeping blackout provisions in contracts.

The proposal to eliminate the rule has been around for some time. The FCC took public comment on the proposal in 2012, and broadcasters argued then that the result would be more viewers stuck with having to find their teams on pay platforms. The rules, they say, prevent satellite and cable providers from using compulsory licenses to “circumvent” sports leagues’ contracts for broadcast rights to their games. Compulsory licenses allow cable and satellite services to retransmit broadcasts without consent of the program owners.

The Sports Fans Coalition, a D.C. based advocacy group, also is pushing for the rule’s elimination, contending that there is a “false premise that blackouts significantly affect attendance and revenues.”

David Goodfriend, chairman of the coalition, said that the FCC’s action was “the beginning of the end of the Sports Blackout Rule in particular and government subsidization of anti-fan behavior by sports leagues more generally.”  Goodfriend is a former Dish Network executive, and the satcaster has been among his lobbying clients.

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