Reaction to FCC Retransmission Announcement

Early reaction was generally positive to the news that the Federal Communications Commission would be issuing a rulemaking on network neutrality, likely within the first quarter of 2011, though fans of retransmission reform were calling it a first step and suggesting more work needs to be done.

“We are very pleased to see the FCC begin a new look at retransmission consent," said Public Knowledge President Gigi Sohn. "These disputes between broadcasters and cable operators are becoming more frequent and increasingly bitter, and consumers are more than ever becoming innocent victims of those disputes. That’s why we and others asked the FCC in March to start a rulemaking on the issues."

"This is a good step toward resolving retransmission disputes, but the FCC will need to do more than just help cable companies and broadcasters," said Corie Wright, policy counsel for Free Press. "A definition of good-faith bargaining does little to stop companies from threatening to pull channels from subscribers, and it does less to help consumers who have lost channels they paid for during a blackout."

Cable operators in the form of the American Television Alliance (ATVA) called the NPRM "welcome news for millions of American TV viewers."

"The NPRM is a constructive step forward and serious review of a marketplace that has undergone significant changes and merits a fresh look," said National Cable & Telecommunications Association spokesman Brian Dietz. "ACA applauds the Federal Communications Commission's intention to launch a rulemaking to review the broken retransmission consent regime that local TV stations have been abusing to gouge cable operators and their customers for many years, especially in small markets where ACA members are most active," said American Cable Association President Matt Polka. ACA was one of the signatories on a Time Warner Cable-spearheaded petition to get the FCC to reform retrans rules, including mandating outside arbitration in standstill agreements.

If the government injects itself into the "private business negotiations of retrans," says National Association of Broadcasters President Gordon Smith, it could ultimately mean the flight of the Super Bowl from free TV. "NAB strongly endorses educating consumers with the multiple options available to them in the exceedingly rare instance when a retransmission consent dispute arises, including the antenna TV option. In the final analysis, injecting Washington into private business negotiations that have a 99% success rate only serves to embolden pay-TV companies," said Smith.

In light of the FCC's announcement, Sen John Kerry (D-MA) said he would not proceed with retransmission consent legislation.

Separately, News Corp chief operating officer Chase Carey set the stage for significantly higher payments from cable operators in the future. “We could have asked for a lot more,” Carey said, and would ask for greater sums in the future. While Cablevision accused the company of charging an “unfair price,” even after agreeing to terms, Carey indicated in his remarks that News Corp. has so far intentionally pursued shorter term deals with cable companies -- compared to the 10-year agreement struck by CBS and Comcast -- with an eye toward ramping up rates fairly quickly. The Fox broadcast network is the most important channel in the company’s portfolio “and should be the most profitable,” Carey said.