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ACA: FCC Should Protect Consumers Harmed By Broadcasters’ Bad Faith

ACA: FCC Should Protect Consumers Harmed By Broadcasters’ Bad Faith

PITTSBURGH, January 15, 2016 - The American Cable Association, a leader in fighting against TV stations' abusive retransmission consent bargaining practices, used an extensive filing to call on the Federal Communications Commission to adopt new rules that will protect consumers from the noxious negotiating tactics broadcasters have used to produce an unprecedented number of signal blackouts and skyrocketing fees that inflate cable bills.

In the second of two wide-ranging filings with the FCC, ACA cemented its case for a host of targeted proposals designed to ensure that TV stations negotiate carriage deals with multichannel video programming distributors (MVPDs) in good faith as required by federal law.  ACA presented its recommendations as either a menu of per se violations of the good faith standard or key criteria on which the FCC could rely as evidence that TV stations are acting in bad faith based on the totality of the circumstances.  In its latest filing, ACA conclusively rebutted claims of the broadcast industry that good faith reforms would actually make things worse.

"Despite their protestations, TV station owners have failed to demonstrate that the marketplace and FCC's rules are working to protect consumers and that maintenance of the status quo for retransmission consent negotiations would serve the public interest.  The time for change in the FCC's retransmission consent rules, long overdue, has arrived," ACA President and CEO Matthew M. Polka said. 

Interestingly, ACA noted that several broadcasters have acknowledged to the FCC that they have some of the same concerns as ACA in their negotiations, showing that broadcasters are not universal in saying the marketplace and rules are perfect, though none of these stations have yet to endorse any of ACA's specific reforms.

The FCC is reviewing a key portion of the retransmission consent rules as directed by Congress in the Satellite Television Extension and Localism Act Reauthorization of 2014 (STELAR), a bipartisan measure passed in 2014 in response to lawmakers' frustration with a record-setting number of TV station-initiated blackouts and the escalating fees MVPDs are strong-armed into paying and ultimately pass along to consumers' as external costs.

In its filings, ACA urged the FCC to adopt a "harm-to-the-public" standard when evaluating claims under the totality of the circumstances test.  ACA identified the following conduct and proposals that the FCC should view to be either a per se violation of the good faith rules, or at the very least, evidence of bad faith to be considered under the totality of the circumstances test:

A broadcaster's insistence on bundling top four-rated broadcast signals with regional sports networks ("RSNs") or other "must have" programming" in retransmission consent negotiations.

*        Refusal of a negotiating party to substantiate claims made during negotiations.

*        Blackouts involving online programming in connection with retransmission consent negotiations as a means to gain leverage in negotiations.

*        Blackouts involving linear programming before "marquee" events in connection with retransmission consent negotiations as a means to gain leverage in negotiations.

*        Third-party interference in retransmission consent negotiations for historically carried out-of-market stations.

*        Conditioning retransmission consent on set prices, terms, and conditions for after-acquired broadcast stations or unlaunched programming networks.

*        Discrimination by an MVPD-affiliated broadcast station based on vertical competitive effects.

In addition, ACA recommended that the FCC consider both a demand for, and an insistence on, negotiating terms based on most favored nation ("MFN") provisions to be evidence of bad faith under the totality of the circumstances test.

"The time has come for broadcasters to recognize that actors within their industry are taking advantage of their market power and ineffective good faith rules, and engaging in conduct and offering proposals that are not consistent with good faith bargaining.  Reforms are necessary, and ACA's proposals are narrowly tailored to address these problems in the market," Polka said.

About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 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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