PITTSBURGH, June 30, 2014 - With cable operators increasingly prevented from providing their customers with out-of-market broadcast signals, the American Cable Association called on the Federal Communications Commission to adopt rules that would give operators the freedom to negotiate carriage agreements with willing out-of-market stations to ensure consumer access to vital information, such as news pertaining to their home states, and timely emergency weather warnings.
"The FCC must protect, to the greatest extent possible, the ability of multichannel video programming distributors (MVPDs) to negotiate retransmission consent with willing sellers for out-of-market signals that in the MVPDs' view best satisfy consumer needs," ACA President and CEO Matthew M. Polka said.
ACA set forth its views in comments filed June 26 as the agency continues to look for ways to align the retransmission consent rules with market conditions as they exist today rather than the period following passage of the 1992 Cable Act. On March 31, the FCC took a big first step in the right direction by banning collusion in negotiating retransmission by any of a market's top-four rated stations that are not under common ownership.
In the comments, ACA stressed that the FCC should shore up the retransmission consent regime by making it a per se violation of the good-faith bargaining rules for a network or a local TV station to prevent an MVPD from reaching a retransmission consent agreement with an out-of-market station.
First adopted in 1966 when cable was a nascent technology and retransmission consent wasn't needed, the broadcast exclusivity rules allow a local broadcaster to prevent an MVPD from carrying network or syndicated programming from a distant market station inside its 35/55 mile protected radius. By prohibiting carriage only within the local affiliate's zone of exclusivity, MVPDs have been free to carry distant signals in the areas outsize this zone. Depending on the size of a designated market area (DMAs), some of which are quite large, this left a considerable open field for distant signal carriage. With retransmission consent now required, networks and local affiliates have used these rules to prevent MVPDs from carrying distant signals counter to Congress and the FCC's public policy protecting distant signal carriage.
In some cases, networks and their affiliates have expanded the exclusivity zone to include entire DMAs, thus contractually preventing distant network carriage in locations otherwise permissible under FCC rules, and local TV stations, as an enforcement mechanism, have withheld retransmission consent from MVPDs contingent on the MVPD not carrying a distant affiliate. ACA noted that these practices especially harm consumers beyond the 35-mile radius in cases where a signal from a neighboring market better serves their communities' interests and needs than a DMA-assigned local TV station.
ACA said the FCC shouldn't allow television networks and local stations to interfere with the exercise of retransmission consent by other stations otherwise willing to grant out-of-market retransmission consent or with the ability of MVPDs to carry out-of-market stations under such circumstances.
"Adopting ACA's approach would ensure that cable operators have the ability to provide consumers in their service territories with the broadcast signals that provide the best local content for the community. These decisions are better made on the local level by local cable operators than by the national broadcast networks and Nielsen, a global information and measurement company," Polka said.
At the same time, ACA urged the FCC to prohibit the exercise of network non-duplication and syndicated exclusivity when the local station has not granted, and is not carried by the MVPD. The rationale for protecting the local station against distant signal importation disappears entirely when the station is not carried. ACA argued that this relief, coupled with the prohibition on third-party interference, should better protect consumers against loss of access to network programming during a retransmission consent negotiating impasse.
ACA also asked the FCC to raise the limit of its small cable system exemption from 1,000 to 2,500 subscribers, excluding systems affiliated with MSOs serving more than 10% of the market. ACA noted that the FCC has historically adjusted the exclusivity rules to minimize their impact on small cable systems and that changed market conditions support raising the exemption.
ACA reiterated its strong support for extension of the Grade B or noise limited signal contour exception should network non-duplication rules be retained, as recommended by ACA member Block Communications. Broadcast stations should have no reasonable expectation of exclusivity against adjacent-market stations receivable over-the-air in the community. Longstanding FCC policy supports ACA in this view. Allowing broadcast stations to block cable customers from receiving network programming available over-the-air squarely conflicts with this policy and should no longer be permitted.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 850 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit http://www.americancable.org/
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