FCC chairman Tom Wheeler has circulated to the other commissioners a bundle of orders and proposals to fulfil modernise rules regarding the satellite, cable and broadcast TV markets, as required under the December 2014 Satellite Television Extension and Localism Act Reauthorisation (STELAR) act. Work under the STELAR legislation will accomplish two primary pro-consumer objectives. The FCC will extend to satellite TV a process allowing parties to seek modification of a TV station’s local TV market to add or delete communities to better reflect market realities. The change will also allow local governments to seek changes to satellite markets alongside broadcasters and satellite providers.
There is unanimous support among commissioners for a notice of proposed rulemaking (NPRM) to review the so-called “totality of the circumstances test” for good faith negotiations over retransmission of broadcast TV signals, which have led to temporary blackouts for pay TV customers.
The FCC has established a list of objective good faith negotiation standards, the violation of which is considered a per se breach of the statutory obligation to negotiate in good faith. The notice undertakes a robust examination of practices used by parties in retransmission consent negotiations, as required by Congress.
Wheeler also put forward an order that proposes elimination of “exclusivity rules”, which he said have been rendered unnecessary in today’s marketplace. These rules prevent a TV distributor from providing subscribers an out-of-market broadcast station, for example, when a retransmission consent dispute results in a local station being dropped from carriage. The FCC will leave the scope of such exclusivity to be decided by the negotiating parties, as it did in the Sports Blackout Order last year.
The National Association of Broadcasters (NAB) issued a statement of opposition to removing exclusivity rules, which it sees as “a lynchpin of the local broadcast business model”, sustaining viewer access to entertainment, local news and lifeline information. NAB vice president of communications Dennis Wharton said, "It is curious that the FCC keeps relying on the rationale that it is taking such pro pay-TV actions because the rules are decades-old, but refuses to even review or remove broadcast ownership rules that were imposed under market circumstances that clearly no longer exist."
