Academic journal article Federal Communications Law Journal

When Silence Isn't Golden: Analogizing the FCC's Discontinuance Regulations to Prevent Retransmission Consent Blackouts

Academic journal article Federal Communications Law Journal

When Silence Isn't Golden: Analogizing the FCC's Discontinuance Regulations to Prevent Retransmission Consent Blackouts

Article excerpt

Table of Contents I. INTRODUCTION II. BACKGROUND    A. Policy Basis and Evolution of Retransmission Consent      Negotiations       1. The Problem with Retransmission Consent: Imbalanced         Negotiations       2. The Case Made by Broadcasters for Increased         Retransmission Consent Fees       3. The Case Made by MVPDs that Increased Fees and         Blackouts Hurt Consumers    B. Regulating Retransmission Consent Negotiations: the Good      Faith Standard       1. FCC Efforts at Strengthening Good Faith Standards         a. MVPD Response to the FCC's Proposed Strengthened           Good Faith Standards         b. Broadcasters 'Response to FCC's Proposed           Strengthened Good Faith Standards       2. Legislative Proposals to Strengthen the FCC's Enforcement         Powers in Retransmission Consent Negotiations    C. Discontinuance Rules: An Alternative Framework to Discourage      Blackouts III. ANALYSIS    A. Proposed FCC and Congressional Reforms May Not Be Realistic      or Robust Enough to Prevent Blackouts    B. The FCC Can and Should Intervene to Prevent Future Blackouts IV. CONCLUSION 

I. INTRODUCTION

Most cable customers would find it unfathomable that they could fail to receive local weather warnings due to an impasse in negotiations between local broadcasters and cable providers. Yet as more retransmission consent negotiations between broadcasters and cable companies fail to result in an agreement, blackouts of local networks for cable customers will become more frequent, resulting in the loss of local programming for a large cross-section of the community who no longer rely on over-the-air TV signals.

Blackouts have reached an all-time high in recent years, having affected viewers in 91 markets in 2012, almost twice the number of blackouts in 2011. (1) In 2013, there were 19 (2) publicized instances of broadcast negotiation impasses that resulted in blackouts of 94 stations. (3) And while broadcasters are quick to point out that most of the 15,000 retransmission disputes from 2009-2012 were resolved without a blackout, (4) the increase in lengthy blackouts suggests that the possibility of being without critical local programming is not an impossibility. In fact, as broadcasters and cable companies consolidate, deeper pockets on both sides will allow parties to dig in their heels to withstand longer blackouts in the future. (5) The 32 days during which CBS was blacked out on Time Warner Cable in August 2013 affected more than three million cable customers and had the potential to prevent local weather warnings from reaching cable subscribers in Dallas, Los Angeles, New York City, and five other markets. (6) During the blackout, wildfires raged in Colorado just a few hours from Denver, one of the affected markets. (7)

Blackouts were not always the looming threat in negotiations between broadcasters and cable providers that they are now. Congress created the retransmission consent regime for a television market in which broadcasters and cable providers had equal leverage. (8) Cable operators were regional monopolies, with typically only one or two cable companies controlling access to multichannel video programming in each region. (9) Broadcast stations had exclusive regional access to network programming, including high-value sports and entertainment content. (10) This original balance of power no longer exists. Today, four or more multichannel video programming distributors (MVPDs) serve many markets, but broadcasters continue to enjoy exclusive access to network programming. (11) Also, the 1992 Cable Act includes no provision for network-owned stations that also own powerful cable channels. (12) These network-owned and operated stations can use their market power from cable holdings as well as network programming to influence retransmission consent fees. (13)

While the market has changed in recent years, the governmental interest in ensuring public access to local broadcast content from diverse sources remains the same. …

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