ACA to Petition FCC for Retransmission Consent Rules

ACA is drafting a petition for rulemaking that would ask the FCC to alter its retransmission consent and network nonduplication rules so cable operators have more flexibility in negotiations with broadcasters. The current rules give broadcasters a “monopoly” to dictate the terms of cable carriage in small markets, said ACA Pres. Matthew Polka: “We think that the free market ought to be allowed to work.”

The network nonduplication rule is an impediment for small operators when facing an impasse in retransmission negotiations with broadcasters because networks are allowed to block cable’s ability to import an out-of- market network station, Polka said: “Cable operators cannot shop for a better deal.” The ACA expects to file its petition in the next month, which would be added to the Satellite Home Viewer Extension & Reauthorization Act (SHVERA) rulemaking (CD Jan 26 p3).

ACA has made retransmission consent issues its major focus this year, Polka said. In an effort to collect data that measures the economic impact of the situation, the group put a notice on its website inviting companies to weigh in with their retransmission consent difficulties. So far, there has been only a “trickle” of responses, but Polka said he expects that to change in the months ahead.

NCTA has not weighed in on the issue yet, although it’s following the struggles that Cox and Cable One have had recently in retransmission disputes with Nexstar Bcstg. (CD Feb 3 p4), as well as some other disputes involving carriage of digital TV stations. “In a sense, it is a system-by-system type of issue,” a spokesman said.

ACA anticipates that retransmission consent disputes will continue to mount in the 2nd half of the year as election cycles expire. Those negotiations will be particularly challenging for small cable companies as they renegotiate carriage terms. Already, some broadcasters are taking a strong stand in pushing for cash-for- carriage, believing they have more bargaining power with the growth of DBS.

Nexstar’s demand for a 30 cents-per-subscriber fee resulted in the breakdown of negotiations resulting in the loss of cable carriage of 5 of its TV stations. Recently, Sinclair Bcst. Group, which owns 62 TV stations in 39 markets, laid down a marker with cable stations, demanding 50 cents per subscriber to carry digital TV signals. Cable operators have resisted, resulting in the loss of carriage of some of Sinclair’s stations. On its website, Sinclair published a letter urging viewers who were missing their TV signals to contact cable companies about the dispute.

“If you would like the cable companies to provide our digital signal, we ask that you contact them to let them know this,” the letter said. Sinclair argues that its fee request is a small price to pay, which cable ought to be willing to shoulder since DBS pays to carry digital TV signals. “We paid billions of dollars to acquire the stations that we own and also spent more than $150 million to build out the infrastructure to broadcast a digital signal,” the company’s statement said.