PITTSBURGH, August 31, 2015 - The American Cable Association urged the Federal Communications Commission to accompany repeal of its network non-duplication and syndicated exclusivity rules with prohibitions on broadcast TV networks blocking or disincentivizing their affiliated TV stations from signing retransmission consent agreements with out-of-market cable operators, particularly deals that permit consumers to receive traditionally available distant signals whose continued availability Congress has repeatedly sought to protect, such as significantly viewed stations and other stations that serve "orphan counties."
In letter to the FCC filed Aug. 28, ACA said it was concerned that unless checked by FCC action, broadcast TV networks will be emboldened by the elimination of the network non-duplication and syndication rules to prohibit any out-of-market retransmission consent contracts involving their independent affiliates, potentially severing millions of MVPD subscribers from historically carried out-of-market stations that have been providing more locally relevant information than in-market stations for many years.
"Without restricting broadcast network interference, the repeal of the rules - and the Chairman's assertion that the government should not have a role in determining the scope of a local broadcaster's exclusivity - will give the networks a clear sign that the FCC does not object to the networks' blocking or disincentivizing MVPDs from carrying out-of-market stations that have been a part of their service for decades. The FCC should block the networks from both disrupting the market and cutting off consumers from receipt of more local news, weather and emergency reports broadcast by adjacent-market stations," ACA President and CEO Matthew M. Polka said.
The FCC's rules permit network stations to ban MVPDs from importing out-market-network stations within a 55-mile radius from the station's community of license reference point in rural markets and within in a 35-mile radius in non-rural markets. Stations may not invoke network non-duplication in communities located beyond the FCC-specified geographic boundaries, even if the communities are within the stations' Designated Market Area (DMA). ACA is concerned that retransmission consent agreements between MVPDs and out-of-market network stations serving communities outside the geographic limits are most at risk, requiring the FCC to do more for consumers than just repeal the network non-duplication and syndicated exclusivity rules and nothing else.
ACA explained that the FCC's exclusivity rules serve two separate goals in that they not only provide local broadcasters an extra-contractual means of enforcing their private rights, but also put limits on the extent to which exclusivity can be enforced, both in geographic terms and with respect to significantly viewed stations.
Under FCC rules, significantly viewed TV stations are those deemed to have a significant viewership in markets outside of their DMA. Even if significantly viewed station signals fall within the exclusivity zone of a local affiliate of the same network in another market, that local station may not utilize the FCC's network non-duplication rules to bar MVPD carriage of the out-of-market duplicating programming. ACA told the FCC it is aware of reports that some broadcast networks have adopted a broad policy of prohibiting their affiliates - including significantly viewed stations and other stations that serve "orphan counties" - from granting retransmission consent to MVPDs beyond the boundaries of the station's DMA. "Orphan counties" are those in a state that are different from the state of the majority of counties in the DMA. As a result, stations serving the DMA often do not provide equivalent news and weather coverage of the state of the orphan counties.
"Concerns about network interference are not limited to cable operators alone as some broadcast station groups have also expressed frustration with their networks' interference in their ability to reach agreements with cable operators to continue serving communities that they've served for decades. When local broadcasters and cable operators both want to provide a more local service to customers who have been disenfranchised by an outdated DMA system, the FCC shouldn't allow executives in New York and Los Angeles to interfere with such local decisions that serve the public interest," Polka said.
ACA said that to address these problems, the FCC can adopt as a new per se violation of the good faith negotiation obligation a prohibition on any agreement that has the effect of limiting the ability of a station to grant retransmission consent to an MVPD, whether through an outright prohibition, a requirement for network approval prior to execution of an agreement, or any other means that has the purpose of influencing or disincentivizing the station's grant of retransmission consent out-of-market.
Alternatively, the FCC could achieve the same outcome by clarifying that interference by broadcast networks with the ability of a station to exercise its right to negotiate retransmission consent with an out-of-market cable operator violates existing good faith standards.
its filing, ACA acknowledged the difference between protecting the carriage of
traditionally offered out-of-market stations and permitting the carriage of
out-of-market stations in areas where they have traditionally not been made
available. ACA made clear that the FCC
can take the limited step of protecting traditionally offered out-of-market
stations without needing to rule on the broader question of whether or not
broadcast network interference should extend any further.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 850 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit http://www.americancable.org/
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