FCC Chairman Tom Wheeler yesterday used a blog post to announce that the Commission’s pending rulemaking concerning its retransmission consent rules is ending without the adoption of any additional rules. This proceeding was to review the “totality of the circumstances” test in determining whether TV stations and MVPDs (cable and satellite television systems) were negotiating in good faith to reach a retransmission consent agreement. In last year’s Notice of Proposed Rulemaking in this proceeding, the FCC proposed a number of possible negotiating tactics that could be declared to be per se violations of the good faith standard – including items such as ending retransmission consent before a major television event (like the Super Bowl) or blocking access to online streams of programming to Internet subscribers who were affiliated with the MVPD involved in the retransmission dispute (see our summary of the proceeding here). Many broadcasters and industry analysts feared that there would be regulations adopted that could restrict TV stations’ ability to negotiate favorable retransmission consent deals. But the Commission seems to have reached the conclusion that they can already, under existing rules, cajole parties to reach a deal if the need arises and that no more specific regulations are needed.
In his blog post, Chairman Wheeler stated that after FCC staff had conducted an extensive review of the record, “it is clear that more rules in this area are not what we need at this point.” He noted that the FCC has an existing nine-point test to judge the compliance of parties with the good faith requirement, plus the broader “totality of circumstances” standard that can be used to find a party in violation even when none of the specifically prohibited conduct has occurred. While little enforcement action has actually been taken in this area, it has often been threatened to bring parties to the table and encourage a voluntary settlement. The Chairman seemed to think that the existing remedies were enough to act in extreme cases, and trying to decide in more specificity which practices were prohibited and which were permitted “could limit future inquiries.” In other words, adopting more specific prohibitions could make it more difficult to rely on the broader “totality of circumstances” test in any particular case that did not involve a specifically prohibited activity.
The FCC opened the rulemaking in compliance with a directive from Congress in the STELA Reauthorization Act of 2014. The directive reflected lawmaker concerns about “blackouts” of TV station signals that sometimes occurred during contentious negotiations between a broadcaster and a multichannel video programming distributor (“MVPD”) over retransmission consent terms. STELAR required the Commission to consider possible changes to its existing rules governing “good faith” negotiations between TV broadcasters and MVPDs, but the statute did not explicitly direct the FCC to adopt any new rules.
The Chairman’s blog post further warned that the FCC would “use the authority Congress has conferred on the Commission to help to bring negotiations to a conclusion.” He pointed to an ongoing dispute between a broadcaster and a satellite television company, where the FCC has brought the parties to Washington to negotiate with oversight from the FCC and, when no settlement was reached, sent “comprehensive information requests” to both sides in its efforts to see if either party was violating the good faith test. This shows that, despite broadcasters dodging what could have been a very damaging bullet, the Commission has not abandoned oversight of retransmission consent negotiations and outrageous conduct, either from the broadcaster or from the MVPD, can still bring FCC action.