FCC Takes Action to Improve Retransmission Consent Process

The Federal Communications Commission adopted a Report and Order that strengthens its rules governing retransmission consent negotiations. This Order will help curtail a practice that has put upward pressure on cable and Direct Broadcast Satellite programming costs as well as prices to consumers.

The Communications Act requires cable systems and other pay television services to obtain a broadcast television station’s retransmission consent before carrying the station’s signal. The Act also requires broadcasters and pay television service providers to negotiate retransmission consent agreements in good faith.

The Order prohibits a television broadcast station ranked among the top four stations (as measured by audience share) from negotiating retransmission consent jointly with another top four station if the stations are not commonly owned and serve the same geographic market. Joint negotiation by these stations leads to higher retransmission consent fees because the practice reduces competition between the stations. Additionally, the threat of losing the programming of two or more top four stations at the same time gives the stations undue bargaining leverage in negotiations with Multichannel Video Program Distributors. To target collusive behavior effectively, the Order also defines joint negotiations.

Chairman Wheeler, Commissioners Clyburn, Rosenworcel, Pai and O’Rielly with Chairman Wheeler, Commissioners Clyburn, Rosenworcel, Pai and O’Rielly issued statements.