Amendment Threatens Retransmission Consent

Apr 21, 2006  •  Post A Comment

Industry lobbyists in Washington late Friday were circulating the summary of a legislative amendment by Reps. Nathan Deal, R-Ga., and Charlie Bass, R-N.H., that could deal a major blow to retransmission consent-the law that clears the way for broadcasters to seek payment from cable TV and satellite television operators for carrying their signals.

The amendment, which is expected to be offered when the House Energy and Commerce Committee votes on video franchising reform legislation next week, would essentially provide for arbitration if the parties fail to agree on a deal within 90 days. A network official said it was unclear whether Rep. Deal had the votes for a measure that would also require broadcast and cable TV networks to file pricing information for their programming at the Federal Communications Commission.

In response, Dennis Wharton, a spokesman for the National Association of Broadcasters, said, “We will strenuously oppose the Deal amendment.”

The blow-by-blow description of the amendment being circulated follows:

Section 1: Arbitration

  • Allows a cable operator or multichannel video programming distributor (MVPD), after 90 days of failed retransmission consent negotiation, to opt for baseball-style arbitration, as defined in the FCC’s News-Hughes arbitration conditions.

  • Only those broadcast stations which are owned or controlled by a company which also owns and controls non-broadcast programming can be brought to arbitration.

  • Under this agreement, both the cable operator or MVPD and the broadcaster submit their final offer for the primary broadcast signal, which they believe reflects the fair market value.

  • The arbitrator then chooses one of the two agreements which most closely approximates the fair market value of the programming carriage rights.

  • The arbitrator is directed to consider the inflationary impact of any final offer on the price of a basic cable tier.

    Section 2: Transparency

  • Provides for every cable operator and MVPD to provide to the FCC any change in rates, terms and conditions for the right to receive and retransmit video programming.

  • Using this data the FCC is to annually publish statistical reports including:
    • A price index of the range of rates charged to cable operators and MVPDs by programmers and broadcasters.

    • Programming price averages.

    • The percentage of programming increases.

    • Programming rates charged by region and company size.

    • The FCC is directed to protect the data and only publish it in aggregated form so as not to violate any private contract.

    Section 3: Pool Bargaining

  • Allows any cable operator or MVPD which meets the FCC’s definition of a small cable company to combine with any other small cable operator or MVPD to pool together to negotiate carriage with a programmer or broadcaster.

    Section 4: Definition of a Small Cable Company

  • Requires the FCC to reexamine the definition of a small cable company. The FCC last reexamined such definition in 1992.

  • Provides for the FCC, in its reexamination, to consider whether any company effectively operates as a small cable company in a single DMA.