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FCC Chairman Proposes Limits On Local TV Alliances For Retransmission Deals

By | Thursday March 6, 2014 @ 11:00am PST

UPDATE, 12:41 PM: Public interest groups like Chairman Tom Wheeler’s retransmission consent and TV station shared services agreement proposals better than I envisioned. Public Knowledge says the plans “will represent a meaningful attempt to rein in programming costs.” Free Press CEO Craig Aaron lauded the chairman’s “willingness to steer clear of the mistakes of FCC predecessors who turned a blind eye” to TV alliances and ownership limits. But National Association of Broadcasters CEO Gordon Smith says he’s “disappointed but not surprised” by the initiative. “The real loser will be local TV viewers, because this proposal will kill jobs, chill investment in broadcasting and reduce meaningful minority programming and ownership opportunities.”  

PREVIOUS, 11:00 AM: Chairman Tom Wheeler is sure to frustrate public interest groups with the timid proposals he’s offering as part of the FCC‘s quadrennial review of media ownership rules, which is already two years overdue.Tom Wheeler He wants to bar two or more of the four biggest stations in a market from jointly negotiating retransmission consent deals with pay TV providers. For other stations, he’d adopt a “rebuttable presumption” that the cost of joint negotiations for retrans deals outweighs the benefits and therefore should be deemed a “failure to negotiate in good faith.” But for the most part he’s just seeking comment on whether ownership limits are still needed, as he “tentatively concludes” that the FCC should keep its restrictions on cross-ownership of newspapers and TV stations in a market. The proposal also will ask for comments on whether the agency should eliminate restrictions on combos of newspapers and radio stations, and radio and TV.

Related: FCC Fines Viacom, ESPN, And NBCU $1.9M For Misuse Of Emergency Alert Sounds: Video

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Bill Would Empower FCC To Protect Pay TV Subscribers In Retransmission Disputes

The proposal today from Rep. Anna Eshoo (D-Calif) offers just the kinds of reforms that pay TV execs want, especially following the recent 32-day blackout of CBS-owned properties on Time Warner Cable systems. Many cable and satellite providers say that they’re virtually powerless to resist broadcasters who demand big price increases for the right to retransmit their shows. The ranking Democrat on the House Communications Subcommittee says her Video CHOICE Act would change that and ensure that pay TV subscribers aren’t  ”caught in the middle of a dispute they have no control over.” Her bill would give the FCC the authority to keep local TV stations on cable or satellite systems during negotiations. The proposal would bar owners of broadcast stations from making deals that also require pay TV providers to carry the company’s cable channels. It would give subscribers the freedom to order pay TV service without broadcast channels that demand high retransmission fees. (The signals are available for free to anyone with an antenna.) The Act also calls on the FCC to study the impact of sports networks on pay TV costs in the 20 largest regional sports markets. Eshoo offered her bill ahead of her subcommittee’s hearing this week to consider extending the Satellite Television Extension and Localism Act — which expires at the end of 2014 — and to renew the FCC’s power to step in to retransmission disputes if it believes at least one side isn’t negotiating in good faith. Read More »

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DirecTV And Time Warner Cable Urge FCC To Block Gannett Purchase Of Belo

UPDATE, 7:50 AM: Gannett has a response for critics who asked the FCC to reject its acquisition plan with Belo. “This transaction is entirely consistent with all FCC rules, policies and precedent, and will bring substantial benefits to the public,” the company says.

PREVIOUS, WEDNESDAY PM: The $1.5B deal announced last month would not only make Gannett the nation’s No. 4 TV station owner. It would have “new virtual duopolies” in St. Louis, Phoenix, and Tucson — raising the danger of retransmission consent fights — according to a filing today by the pay TV companies joined by the American Cable Association. Gannett has “cited its expectation of increased retransmission content fees as a central rationale for the transaction.” The complaint adds that consumers would end up paying higher pay TV bills if Gannett had the leverage to obtain higher payments from distributors who carry their local stations. And there’s a greater risk of blackouts if pay TV companies resist. The filing notes that FCC rules limit a company from owning multiple stations in a market. But instead of buying them outright, Gannett plans to use what the filing calls “a series of shills or ‘third-party sidecars,’ which appear to have been established for the primary purpose of holding Belo’s broadcast licenses.” These arrangements “are increasingly common among broadcasters.” St. Louis and Phoenix pose “particular concerns,” the filing says: Gannett owns NBC affiliates in both cities; Belo has … Read More »

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Sinclair Stations Could Go Dark On Dish Network Tonight

UPDATE, 9:10 AM: Sinclair’s angry about Dish’s “corporate greed” charge, and has fired back to “set the record straight.” The broadcaster says that the retransmission consent payments it wants for its stations “are substantially lower than the amounts Dish is paying for other far less popular channels it carries.” Broadcasters have long noted that cable and satellite companies pay less for stations carrying ABC, CBS, Fox, and NBC than they do for low-rated cable channels. But distributors point out that broadcasters’ signals are worth less because they’re also available for free over the air and on Web sites such as Hulu. Sinclair adds that its negotiations with Dish “involve matters other than pricing” — noting that broadcasters are in court charging that Dish’s ad-zapping Hopper DVR infringes on their copyrights. Sinclair is urging Dish customers to switch to a service “that values Sinclair stations enough to carry them,” including DirecTV or a local cable or telco video provider.

PREVIOUS, 6:55 AM: Here we go again, another retransmission consent contract dispute between Dish Network and a broadcaster. A blackout could affect Dish customers in 45 cities where Sinclair owns or provides services to stations — including affiliates of Fox (20 stations), MyTV (18), ABC (11), CW (14), CBS (9), NBC (1) and Azteca (1). “We carry more than 1,800 local broadcast stations nationwide. Sinclair is asking for more than any other station anywhere in the country,” says Dish SVP Dave … Read More »

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Lawmakers Ponder: Are Big Media Companies Too Powerful?

That wasn’t the precise topic of the Senate Commerce Committee hearing today. (It had the boring title: “The Cable Act at 20.”) But the question — as well as ones about whether the federal government over-regulates media — bubbled underneath the discussion of problems including higher-than-inflation annual pay TV price hikes, and contract disputes that sometimes result in blackouts of consumers’ favorite channels. Committee Chairman Jay Rockefeller (D-W Va.) says that there’s too little competition in a system where pay TV customers “are still forced to pick larger and larger packages of channels no matter how few they watch.” His view resonated with Colleen Abdoulah, a witness who chairs the American Cable Association which primarily represents small and mid-sized cable operators. She says that broadcasters make “crazy payments for sports (rights) because they can be forced onto consumers…This abuse of power should be outlawed.” Mark Cooper of the Consumers Federation of America also called for changes that would enable pay TV customers to just buy the channels they want. “The only way to break the market power (of major networks and programmers) is to ensure consumers have choices.” Read More »

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Hearst: Time Warner Cable Holds Subs “Hostage” To Change TV Carriage Laws

UPDATE, 2:24 PM: Time Warner Cable’s response to Hearst: “Negotiations are ongoing,” it says. That’s it. But the American Cable Association, an industry trade group, was more outspoken about the broader dispute over retransmission consent rules. “Broadcasters support the status quo because it allows them to leverage monopoly market power and friendly federal regulations to slam viewers with sudden signal blackouts that don’t end until targeted pay-TV providers surrender outrageous amounts of cash, driving up monthly bills,” it says. “The evidence is convincing that the market is broken and that rules and regulations that pre-date Netscape’s IPO need to be modernized to reflect current market conditions.”

PREVIOUS, 12:15 PM: There’s something fishy about the negotiations to resolve the week-long contract dispute between Time Warner Cable and Hearst Television, according to the broadcast company’s president David Barrett. His stations in 13 communities went dark on the No. 2 cable company’s systems last week in a disagreement over how much TWC should pay to carry their programming. But peace should be at hand: Hearst told TWC yesterday that it could accept a deal that’s just 5% higher than the offer the cable company made on July 9. The dispute “is ripe for settlement – today,” Barrett says. What’s the hang-up? Hearst says that TWC hasn’t responded to its proposal. Barrett thinks he knows why. TWC, he says, is ”acting as the conductor of the public relations bandwagon” to … Read More »

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Dish Network Resolves Retransmission Consent Show Down With Hoak Media

Dish Network subscribers who live in the markets with one of Hoak Media’s 14 TV stations can see its programming again after a week-long black out. The companies settled their dispute, which Dish said followed Hoak’s demand for a 200% fee increase and for the satellite company to stop offering the new AutoHop feature on its DVRs. Broadcasters are suing Dish over the technology which enables users to automatically skip past ads in recorded shows from the major networks. Although the companies aren’t disclosing settlement terms, Dish sure makes it sound like the little known company caved. Dish is keeping the AutoHop in Hoak’s markets. “Dish will not entertain negotiations that tie AutoHop to local retransmission fees,” a spokesman says. Dish SVP of Programming Dave Shull also says that Dish will continue to offer “the best channel choices at the lowest everyday prices in the industry.” Meanwhile the American Television Alliance — a coalition of cable and satellite companies and  activist groups that oppose re-transmission consent black outs — blasted Hoak’s “greed.” The Dallas-based company’s “latest stunt blocked programming of the Stanley Cup Finals and Belmont Stakes,” ATVA says. “Until Congress and the FCC reform retransmission consent rules, broadcasters will continue their games of dragging consumers into business negotiations.” Hoak’s stations are mostly in the mid-west and south.

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Is Congress Prepared To Deregulate Television?

Rep. Steve Scalise (R-LA) and Sen. Jim DeMint (R-SC) apparently think so based on the cable- and satellite-friendly bill they submitted today called the Next Generation Television Marketplace Act. It would end retransmission consent — the rules that require pay TV providers to negotiate deals with local broadcasters to carry their programming. It doesn’t stop there: The proposal also would end restrictions that enable syndicators to sell shows exclusively into different markets. And it would scrap rules that bar cable companies from importing network programming from out-of-market stations when they can’t strike deals with local broadcasters. DeMint used the trendy magic words — “job creation” — to support the bill. To promote innovation, he says, “we need to stop issuing new regulations and instead remove and modernize rules written to address the last century’s business and regulatory models.” DirecTV agrees, saying that the proposal would “eliminate byzantine regulations that shackle innovation, competition and consumer choice.”

But when it comes to wielding political clout, the bill’s supporters probably are no match for the National Association of Broadcasters which says it “respectfully” opposes the legislation. “Current law ensures access to quality local news, entertainment, sports and life-saving weather warnings. The proposed changes to the Communications Act strike at the core of free market negotiations and broadcast localism, thereby threatening a community-based information and entertainment medium that serves tens of millions of Americans each day.”

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Cablevision Tells FCC: Let Us Carry Just The TV Networks We Want

No major cable operator hates paying broadcasters for the right to retransmit their free over-the-air programming more than Cablevision. Last year, it allowed ABC and Fox stations to go dark on Cablevision systems while trying to hammer out payment deals. So it’s interesting to see the three-point plan that Cablevision submitted to the FCC today to ensure that subscribers aren’t deprived from seeing the Oscars or the World Series while companies work out their differences.

First, it wants regulators to prevent broadcasters from packaging their services in a way that would require pay TV services to carry cable channels they don’t want in order to land programming from a must-have network such as ABC, CBS, Fox and NBC. Second, if the cable operator can’t strike a deal with a network’s local station, then Cablevision wants the freedom to cut deals that would enable it to import signals from out-of-market network affiliates. And, third, Cablevision wants to be able to publicize the fees that broadcasters want. Read More »

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Stations Go Dark On Dish In Retrans Spat

Nellie Andreeva

A relatively small standoff over retransmission consent will probably get big attention because of its timing. LIN Media’s 17 stations, mostly CBS, Fox and CW affiliates, went dark on Dish Network systems today, just two days after the FCC said it will review the current retransmission-consent rules so that it can prevent such blackouts. The markets impacted by the spat include Albuquerque, N.M., Austin, Texas, and Buffalo, N.Y. At the center of the dispute are fees broadcast stations, previously free to cable and satellite providers, now want to charge for their programming.

“We only want what is fair for our local stations, so that we can continue providing the premium news, sports, entertainment and other local programming that is most important to viewers,” said LIN Media president and CEO Vincent L. Sadusky.

Dish’s statement included direct accusations against the station owner: “LIN Media is simply being greedy, insisting on a rate increase so immense that Dish Network and its customers couldn’t possibly absorb it. Their onerous demands and burdensome contract terms would result in payments of millions of dollars more each month, exceeding current market rates and demanding more money than we pay most of our popular national networks.”

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