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Rosenworcel's 'Latest Thinking' at Odds With Cantwell Letter

Broadcasters believe a letter from Senate Commerce Chair Maria Cantwell, D-Wash., could move FCC Chairwoman Jessica Rosenworcel to refresh the record on a nearly decade-old proceeding on classifying streaming services as MVPDs, but the programming networks don’t agree. Rosenworcel’s March 24 letter (see 2303310061) to Sen. Charles Grassley, R-Iowa, “reflects her latest thinking on the matter,” emailed an FCC spokesperson Friday in response to questions about Rosenworcel’s stance and Cantwell's comments. The FCC “lacks the power to change these unambiguous provisions on its own,” the Chairwoman wrote then.

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Cantwell’s letter urged the agency to refresh the record to acknowledge changes in the streaming and video marketplace since 2014 and suggested such a refresh could inform both the FCC and Congress. Cantwell noted commenters in the docket suggested the FCC would have the authority to reclassify streaming services if the agency interpreted the definition of an MVPD in the Communications Act to “to be flexible, technology-neutral, and not tied to a specific methodology for delivering programming,” She also said the agency doesn’t need to wait for Congress to create a new statutory copyright regime for streaming service to change the rules. “In the absence of a statutory copyright license for online video programming, linear television streaming services would be required to negotiate directly with local broadcasters under current good faith negotiation requirements of the Communications Act,” Cantwell wrote.

Broadcasters such as Nexstar want the agency to classify streaming services as MVPDs because they can’t currently negotiate directly with streaming services over carriage the way they do with cable and satellite companies. However, national TV networks such as Fox and CBS negotiate with streamers without the input of their affiliates. Designating streamers as MVPDs would put them under the same rule regime as cable and satellite, allowing direct retransmission consent negotiations.

Broadcasters and advocates touted Cantwell’s letter Thursday as progress toward a record refresh, which broadcasters have been lobbying about for several years. “Nexstar believes Sen. Cantwell makes a compelling case for closing the ‘streaming loophole’ and allowing local broadcasters to negotiate directly with over-the-top providers such as Youtube TV, Hulu, FuboTV and others,” said a Nexstar news release. Cantwell’s letter and an expression of support Thursday from Sen. Marsha Blackburn, R-Tenn., are a “major development in the vMVPD proceeding,” emailed Cooley attorney Robert McDowell, a former FCC commissioner. “Having the Democratic Chair of the Senate Commerce Committee and a senior Republican senator who serves on both the Commerce and Judiciary committees [in support of the broadcast position] sends a strong bipartisan signal to Chairwoman Rosenworcel and her FCC colleagues that the status quo has to change, and soon.”

Before Cantwell’s request, broadcast industry officials had seen Rosenworcel’s letter to Grassley as an indication the current FCC wouldn’t take up the matter. On an earnings call in May, Nexstar CEO Perry Sook suggested the industry should revisit the matter in several years. “I think that's probably going to be the window, absent a legislative act or something that might accelerate the process,” Sook said then (see 2305090078). Broadcasters noted Rosenworcel supported the 2014 NPRM that proposed interpreting MVPD to include internet-based services, but her letter to Grassley takes a firm stance in the other direction. The record created in response to that NPRM showed “online video programming distributors do not neatly fit in these statutory definitions because they lack a physical connection to subscribers and do not use any electromagnetic frequencies when delivering programming to their viewers,” she told Grassley.

Generally, one would expect the FCC Chair to respond favorably to the Commerce Committee Chair of the same party for a request to update a record; it is not a huge ask,” emailed New Street’s Blair Levin, a former FCC chief of staff. It isn’t outside FCC jurisdiction to provide updated information to Congress, as Cantwell requested, Levin said. “Given, however, the late stage of the Chair's tenure, the likely need to accelerate some larger issues once the Democrats have a majority, and the relative ineffectiveness of the broadcasters with this Chair, the general rules may not apply,” Levin conceded.

It’s not unreasonable for the Commission to issue a notice inviting comments to refresh the record,” on a proceeding from 2014, said Free State Foundation President Randolph May. “Ultimately, I do think it is up to Congress to take a holistic view in updating the Communications Act and Copyright Act to take account of the dramatically changed marketplace.”

That large broadcasters Gray Television and Nexstar announced retransmission deals with streamers such as YouTube TV and Hulu in 2023, said a broadcast network executive in an interview, demonstrates government intervention isn’t needed. Local TV channels are well represented on streaming services, he said. The broadcaster position also faces opponents on Capitol Hill, the executive said. “I am skeptical of FCC proposals to extend legacy rules to the flourishing online video market,” said Sen. Ted Cruz, R-Texas, in remarks Thursday. “It’s for Congress to decide whether and how to regulate streaming; the FCC should be deregulating broadcasters so they can compete.”