Regulators voted to review their so-called “totality of the circumstances test” to determine whether station owners, cable and satellite operators are negotiating in good faith — something that Congress ordered the FCC to assess when there’s an impasse over retransmission consent terms. Last month Wheeler said that he would favor an order enabling a pay TV company to import a signal from an out-of-market station if a local broadcaster pulls its programming in a contract dispute.
Today’s FCC order notes that consumers have more flexibility to switch pay TV providers than they had when current rules were adopted in 1992. That “has improved broadcasters’ leverage in retransmission consent negotiations.” What’s more, major network affiliates offer must-have programming which means a cable or satellite company that loses them “may permanently lose subscribers to rival” pay TV providers.
As a result “retransmission consent fees have steadily grown and are projected to increase further, thereby applying upward pressure on consumer prices.”
American Cable Association CEO Matthew Polka applauded the vote, saying he hopes the FCC will “establish vigorous policies designed to stop TV station misconduct, including sudden TV signal blackouts as well as blocking [pay TV distributors’] broadband subscribers from accessing otherwise free online content during or after a negotiating impasse.” He also wants the FCC to “bring a halt to the practice of TV stations insisting on setting prices, terms, or conditions for broadcast stations they may later acquire or for programming networks they may launch in the future as part of current retransmission consent negotiations.”
But National Association of Broadcasters EVP Dennis Wharton warned that the notice “at first blush, appears to go much further than Congress directed,” adding that “nothing in this proceeding will necessarily translate to lower cable prices for consumers.”
The broadcast TV trade group says it also wonders whether the FCC “should be taking actions that benefit heavily consolidated companies that dominate the video landscape like Dish, AT&T/DirecTV, Time Warner Cable/Charter and Verizon. Consumers will be left wondering why the FCC is working overtime to tip the scales even further in favor of these mega-companies.”