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FCC to Review Oversight of Retransmission Negotiations

The FCC is giving greater scrutiny to negotiations between broadcasters and cable and satellite operators, after high-profile disputes have seen station signals pulled from channel lineups in the standoff over retransmission fees.

In a blog post, FCC chairman Tom Wheeler said that he is circulating a rulemaking notice that “undertakes a robust examination of practices used by parties in retransmission consent negotiations, as required by Congress. The goal of the proposed rulemaking is to ensure that these negotiations are conducted fairly and in a way that protects consumers.”

Broadcasters already are objecting to another of Wheeler’s proposals, which would eliminate a rule that prevents a cable or satellite provider from picking up an out-of-market broadcast station when a retransmission dispute leads to a local station being dropped or pulled from carriage.

Wheeler wrote that the elimination of the rule would mean that the FCC “takes its thumb off the scales and leaves the scope of such exclusivity to be decided by the parties.”

In a statement, Dennis Wharton, a spokesman for the National Assn. of Broadcasters, said that the exclusivity rules “are a linchpin of the local broadcast business model and help sustain viewer access not only to high-quality entertainment programming, but also to local news and lifeline information.” They said that the elimination of the rules would “threaten the vibrancy of our uniquely free and local broadcast system.”

As broadcast retransmission fees have grown — SNL Kagan recently estimated that they would reach $6.3 billion this year — multichannel providers have pushed the FCC and Congress to reform the rules, calling them outdated.

When CBS stations were pulled from Time Warner Cable systems in 2013, the agency did not step in, even as the standoff stretched to a month.

The FCC’s latest review will look at the way in which it judges whether negotiations are conducted in “good faith.” That is the extent to which the Communications Act gives the agency oversight over how retransmission deals are reached.

Wheeler said that the proposed rule changes, along with others he outlined in his blog post, will “bring governance up to date with the practical realities of today’s media landscape and will ensure that consumers remain well-served by our media policies.”

Robert Kenny, spokesman for broadcast industry group TVfreedom.org, said, “A fair and balanced approach regarding future programming disputes requires that the FCC scrutinize pay-TV providers that manufacture TV blackouts that, in effect, disrupt customers’ access to valued broadcast TV content.

“In reality, local TV programming costs amount to just a small fraction of pay-TV subscriber charges and the public interest would be best served if federal regulators were to focus on policies that address the full gamut of monthly fees.”

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