Retrans Blackout Rebate NPRM Defends FCC Authority, Makes Few Implementation Assertions
The retransmission consent blackout rebate NPRM that FCC commissioners adopted 3-2 along party lines last week (see 2401100026) asks numerous questions about agency authority and implementation but has few tentative conclusions about how such a rebate regime might work. The approved NPRM was released Wednesday.
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"When consumers are saddled with a blackout like this, I think they deserve a refund," Chairwoman Jessica Rosenworcel said in a statement. "They should not be asked to shell out for programming that they were promised but are unable to watch." Commissioner Geoffrey Starks said Rosenworcel and Commissioner Anna Gomez backed his additions to the item that examine why blackouts have increased. Gomez didn't issue a statement.
The FCC "is reportedly doubling down [on a broken retrans regime] that gives insatiable mega-broadcasters even more leverage over smaller cable operators seeking fair and reasonable rates," ACA Connects said after last week's adoption. NCTA didn't comment Wednesday.
"It will be easy to cast minority dissents on this item as representing some kind of retrograde, pro-business, anti-consumer stance straight out of the bloodless capitalist playbook," Commissioner Nathan Simington said in his dissent. He said the agency was wrong both in its cited legal authority and on its assertion that such a rebate would benefit consumers. Instead, he said, a rebate requirement would give broadcasters greater leverage in retrans talks with MVPDs. Commissioner Brendan Carr in his dissent said the item was proposing a form of rate regulation. He similarly raised the specter of rate regulation in his December dissent vote regarding the MVPD early termination fees NPRM (see 2312130019).
In the NPRM the agency disputes the idea a rebate requirement would be rate regulation, as the proposal doesn't limit what cable operators can charge for a channel. "Rather, it would simply require the operator to rebate the amount it charges if it does not deliver the product," the commission said.
The NPRM asks numerous questions about calculating such a rebate. Citing the complexity of carriage contracts, it asks if any rebate requirement should simply require that cable and direct broadcast satellite operators' rebate should "in good faith approximate the value of the consumer’s access to the channel."
Pointing to data indicating increased numbers of retrans-related blackouts in recent years, the NPRM asks why and whether either broadcaster or MVPD market consolidation is a factor. It also asks whether there are ways to incentivize programmers and MVPDs to limit such blackouts. The NPRM asks a variety of enforcement questions, such as whether state and local authorities have the ability to handle enforcement or if the FCC is better equipped.
In the item, the agency points to its cable customer service regulatory authority as also covering its ability to require rebates, as does its oversight of video programming public interest requirements. The NRPM asks questions about other possible sources of regulatory authority. "Blackout-related rebates are precisely the type of customer service concerns that Congress meant to address" in the Cable Act's Section 632, the FCC said. Section 632 covers customer protection. The agency said that while cable operators are subject to effective competition and thus not subject to rate regulation, that doesn't limit Section 632's customer service provision.