TWC, CBS May Feel Pressure From FCC Concern, Say Consumer Groups, Media Attorneys
Acting Chairwoman Mignon Clyburn’s affirmation she might consider FCC involvement in the retransmission dispute between Time Warner Cable and CBS could add pressure to the parties to reach a resolution that would restore the broadcaster’s stations to the operator’s lineup, said some consumer advocates and broadcast attorneys in interviews Monday. Clyburn and Commissioner Jessica Rosenworcel expressed their concern for the affected customers after Friday’s FCC monthly meeting (CD Aug 12 p1). The statement from Clyburn counters the stance that previous chairmen have taken on the commission’s authority to act, said consumer groups that want retrans rules changed. NAB opposed further government involvement in the retrans consent process.
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The FCC has authority to intercede in retrans fights, said Public Knowledge and the American Cable Association. “With unprecedented impact on broadband users, we think it’s certainly justified,” said Chris Lewis, Public Knowledge director-government relations. When consumers are being impacted and aren’t subject to the actual retransmission of the broadcast signal, “it’s a sign that companies may not be negotiating in good faith,” he said. The FCC has authority to broker a resolution, he said.
ACA is hopeful that the FCC will examine retrans disputes more specifically, said President Matt Polka. The group appreciates the comments from the commissioners, but the most effective action for the commission to take is to follow up on the retrans consent rulemaking and the media ownership rulemaking, “where retransmission consent reform issues are front and center and squarely placed before the commission,” he said. While there is pressure to encourage a deal for consumers, “a deal for a deal’s sake is not something that will actually fix what is a broken retransmission consent system,” he said. The system is the underlying problem that the FCC has the authority to fix, he added.
Mediacom also urged the commission to act. “If it continues its current posture, blackouts will keep happening and prices will keep rising at extraordinary rates,” said Mediacom General Counsel Joseph Young in letter to the FCC (http://bit.ly/165fGVp). It would benefit the incoming chairman and consumers if Clyburn “ordered a comprehensive re-evaluation of the conclusion that the commission is essentially powerless,” said the operator.
Uncertainty on how Clyburn will proceed is a strong motivator for a new CBS/Time Warner Cable retrans deal, said Scott Flick, a Pillsbury Winthrop broadcast lawyer. “Even though we might not know what the FCC thinks it is now capable of doing, it’s probably also true that neither party really wants to find out.” But “I don’t see either party wanting to avoid it so badly that they would give in to any offer that was coming from the other side,” he said.
NAB urged against further government involvement. Time Warner Cable and other pay-TV providers “appear to be deliberately forcing retrans disruptions in hopes of injecting government into free market negotiations,” an NAB spokesman said. “Rewarding this cynical strategy is the very thing policymakers should avoid, because the mere suggestion of government involvement could lead to more disruptions, not fewer.” CBS and Time Warner Cable had no comment.
Clyburn’s statement “is a sign that the government in watching and that it’s concerned and expressing its interest in safeguarding the interests of the viewers,” said Barbara Esbin, a Cinnamon Mueller cable attorney who like Flick isn’t part of the CBS/Time Warner Cable retrans negotiations. Each side is under a great deal of pressure already, she said. “There are a lot of points of pressure.” It’s unclear how much the FCC statements will add to that, said Esbin. “An acting chairperson would be hesitant to try to put through a rulemaking order on a controversial subject during this period of time when an incoming chairperson is waiting in the wings.”
FCC involvement could influence Congress to back away, Flick said. If the FCC says it’s going to step in, that would be an encouragement for Congress to step back, he said: If Congress sees that the FCC believes it has authority, “Congress may feel as though its involvement isn’t needed.” However, the appetite for Congress or the FCC “to deeply involve themselves in retransmission negotiations is limited for a number of reasons,” Flick added: It’s a market process, and “the more the FCC or Congress tries to insert itself, inevitably, the more tangled the process becomes."
Congress looks to the FCC as the expert agency to deal with issues like this, Polka said. Given the size and scope of this blackout, “it’s time for the FCC to act because these problems are only going to get worse,” he said. Retrans consent was never intended to pay CBS reverse compensation or pay it for NFL sports rights, he added: “It was never about the network."
Congress didn’t intend for these negotiations “to have expanded the way that they have and to impact so many consumers so often,” said Lewis of Public Knowledge, which opposed the blocking of content on CBS.com. The blackouts seem more and more common, “and the last thing we want is for them to spill out over into blackouts over the Internet,” he added. “It really is unprecedented.”