House Media Market Hearing Witnesses Call 92 Cable Act 'Obsolete,' Fault Retrans
The 1992 Cable Act is largely “obsolete” and “mostly unnecessary,” MoffettNathanson analyst Craig Moffett said in his response to lawmakers' written questions after a September House Communications Subcommittee hearing on the state of the media market. The hearing in part touched on coming 2019 Satellite Television Extension and Localism Act (STELA) reauthorization and the Next Generation Television Marketplace Act (HR-6465) to repeal compulsory copyright licenses and retransmission provisions in the Cable Act (see 1809270062). The committee released responses Tuesday.
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The Cable Act “largely pertains to video markets that would be judged highly competitive by almost any observer,” except for “broadcasters and Retransmission Consent,” Moffett said to a question from Rep. John Shimkus, R-Ill., on how often the 1992 law or the 1996 Telecom Act should be reauthorized. The 1996 law “has many critically important elements that relate to less robustly competitive infrastructure markets,” but “there seems little appetite for a comprehensive rewrite” of the statute,” Moffett said. “Greater frequency of revisiting” the statutes would “probably be counter-productive,” as frequent updates are “difficult in a period of rapid technological change.”
The issues the Telecom Act addressed “have become so large and so intertwined … that a re-write of the 1996 Act would come to encompass something like a third of the U.S. economy,” Moffett said. “Smaller, more targeted, legislative actions will be more valuable.” It's “almost impossible to treat issues like net neutrality and peering/interconnection, for example, without also dealing with privacy, antitrust, cybersecurity, cyber health, patents and intellectual property protections,” Moffett said.
House Commerce ranking member Frank Pallone, D-N.J., asked whether there's a “significant cause and effect relationship between network infrastructure investment” and FCC adoption of now-rescinded 2015 net neutrality rules, noting “we've heard the major ISPs that deliver much of the media content assert” those rules “would depress network infrastructure investment.” MoffettNathanson has “not seen any discernible impact on spending as a result of either the passage of, or the repeal of” the 2015 rules,” Moffett said. “These kinds of changes would take a decade or more to play in out ways that were clearly discernible.”
Retrans "unquestionably leads to higher consumer prices for video,” Moffett responded to Rep. Yvette Clarke, D-N.Y. “The simplest solution” to balancing negotiations “would be to eliminate the network non-duplication rules,” Moffett said. “The only credible argument against doing so is that it would compromise the availability of local broadcast programming, both directly” and indirectly. The current regime “theoretically supports local news, but at the expense of consumer prices,” Moffett said.
Clarke was the only lawmaker to also address questions to ABC's Ocean Treks Executive Producer Jeff Corwin and Kagan Media Research's Ian Olgeirson, which also focused on retrans. “Broadcast retransmission consent fees, irrespective of a negotiation imbalance, have risen significantly over the past five years,” Olgeirson said. Litton Entertainment doesn't “negotiate retransmission consent deals and therefore have no insight into the construction of those contracts,” Corwin said. He represented Litton at the September hearing.