FCC Votes to Open Retrans NPRM

In a unanimous vote this afternoon, the FCC agreed to open a Notice of Proposed Rule Making (NPRM) related to the issue of Retransmission Consent. Recently a hot button topic as a result of several high profile disputes, the FCC’s concern with retransmission consent comes on the heels of a congressional hearing on the matter. While commissioners differ on the degree of actions that should be taken, all agree that adherence to the seven good faith standards in the rules are paramount.

To be sure, no new rules were adopted at this meeting; this was merely a vote to look into the matter and to hear from all of the concerned stakeholders; broadcasters, MVPDs and consumers. More than one commissioner warned that no parties to any negotiation should read into the NPRM any likely outcome, nor should anyone use the NPRM as a delaying tactic in their negotiations. The standards of good faith negotiation still stand. After all, the commission could go through the process and decide to do nothing – kind of like looking at the desert tray and just ordering coffee.

What does it mean for the industry? This is one more chance for all interested parties to go on record. If you are a broadcaster, the process works fine as a vast majority of retransmission consent negotiations are completed quietly and without incident. If you are a cable operator, the process is broken and the smaller a cable operator you are the worse it is broken. No doubt the ACA will be prepared to show that smaller cable operators pay a disproportionate higher rate as the result of MFN’s and weaker relative market leverage. The commissioners even specified that they want to hear from organizations that represent consumers too.

Make no mistake, retransmission consent will not be going away – that will require an act of congress. It is expected that the main focus of the commission will be to find a way to keep the signals available to consumer while cable ops and broadcasters hash out their deals and to find away to prevent consumers from being “held hostage” by the process.

In a related note, Comcast and Sinclair announced a “multiyear agreement-in-principle” for the carriage of 36 stations in 22 markets.