Retrans Blackout Reporting Rule Won't Bring Consumer Rebates
The FCC commissioners' unanimously adopting a retransmission consent blackout reporting requirement for multichannel video programming distributors (MVPD) likely doesn't mean the agency will also mandate rebates for subscribers due to those blackouts anytime soon, pay-TV and broadcast experts tell us. The blackout reporting order was released Friday. The FCC is unlikely to push rebates during the last days of outgoing Chairwoman Jessica Rosenworcel's administration and incoming Chairman Brendan Carr is unlikely to consider rebates, some pay-TV watchers say. Neither Rosenworcel's nor Carr's offices commented Monday.
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The blackout notification item is “stupid, but harmless," is how one broadcast executive characterized it for us. The FCC’s rebate proposal, which drew widespread condemnation from MVPDs (see 2403110057), is much more controversial, the executive added. The blackout reporting item was likely approved to “clear the decks” before the new administration arrives, broadcast industry officials told us.
While the blackout reporting proposal didn't see sizable or sustained opposition, the rebate idea is far more contentious, a lawyer with retrans experience told us. The Rosenworcel FCC attempting to get a rebates order done would be surprising considering House Commerce Committee Chair Cathy McMorris Rodgers, R-Wash., has asked that it avoid controversial issues during the transition to the incoming Donald Trump White House (see 2411060043).
International Center for Law & Economics Senior Scholar Eric Fruits emailed that with the agenda for the Jan. 15 meeting -- Rosenworcel's last -- not including retrans consent blackout rebates, the issue has been back-burnered. No items are scheduled for a vote during that meeting (see 2412230045). Fruits -- a critic of the blackout rebates proposal (see 2403060071) -- said the reporting requirements "seem to be fairly 'light touch.'" A rebate would be unworkable due to such challenges as identifying the affected subscribers, he said. "My guess is that the FCC says that they have now 'done something' about retransmission consent agreement blackouts, call it a day, and move on."
Blogging for Free State Foundation on Monday (see 2501060058), former FCC Commissioner Mike O'Rielly wrote that the Trump administration and its Department of Government Efficiency should avoid stepping into the morass that is video regulation. He said while retrans consent reform deserves attention, it would likely get bogged down in a fight with broadcasters.
“Broadcaster blackouts confuse and frustrate viewers, so, of course, it makes sense for the FCC to track them," ACA Connects Chief Regulatory Counsel Brian Hurley said in an emailed statement. "This reporting does nothing about the excessive fees and onerous conditions imposed by broadcasters that lead to blackouts in the first place, but it can help policymakers get clearer on the scope of the problem.”
The retrans rebate NPRM was adopted 3-2 along party lines 12 months ago (see 2401100026). In his dissent, Carr called it a form of rate regulation "at a time when consumer choice has never been greater and traditional MVPDs are bleeding market share to new, unregulated competitors."
Rebates would be particularly burdensome and difficult for small providers given the challenge of deciding on amounts and the mechanism for delivering rebates or refunds, said NTCA General Counsel Jill Canfield.
The recent letter from Carr to Disney CEO Bob Iger that touched on retransmission consent matters was primarily focused on the network/affiliate relationship, and didn’t foreshadow FCC intervention in negotiations between broadcasters and MVPDs, broadcast industry officials told us (see 2412240021). The blackout reporting item and the ABC letter don’t appear related, broadcast industry officials told us. Carr’s letter to Iger was aimed more at the issue of virtual MVPDs and negotiations over streaming services, broadcasters told us. Broadcast affiliate groups have long pushed for the FCC to address the issue of networks negotiating with streamers on affiliate stations’ behalf by reclassifying linear streaming services as MVPDs. Yet Rosenworcel and Carr have said the agency lacks authority to do so. Broadcasters said they see Carr’s letter as an attempt at using the chair’s “bully pulpit” without reversing his prior position.
In the blackout reporting order, the FCC said that since adopting the good-faith negotiation rules in 2000, it has received "relatively few complaints" about violations of them, even though blackouts have affected a growing number of subscribers. The FCC said it typically learns of blackouts through news reports or informal communications with staff, not from consumer complaints: "No existing source of information serves the two purposes we aim to fulfill: for the Commission and public to receive timely and transparent information as blackouts are occurring, and to create an accurate, robust historical database that can reveal trends and commonalities and inform analysis of the effects of blackouts on competition and consumers."
Under the order, MVPDs notify the FCC about blackouts, including their duration and how many subscribers are affected, though the subscriber information is confidential. Broadcasters can voluntarily supplement the notifications, the FCC said.
The reporting requirement doesn't apply to virtual MVPDs. While some virtual MVPDs carry broadcast stations, it's "an open question" whether FCC retransmission consent regulations apply to them, the agency said, adding that it thus didn't include virtual MVPDs in the rulemaking.