Two proposed Federal Communications Commission rules on carriage dispute blackouts are generating a lot of discussion. FCC chair Jessica Rosenworcel announced Wednesday that they’re looking for public comment on two proposals to “further the FCC’s strategic goal to empower consumers in the media marketplace.” The first would require multichannel video programming distributors (cable/satellite/virtual MVPDs) to issue rebates to consumers when blackouts happen “due to a failure to reach a retransmission consent agreement with broadcast station(s)/group owners,” while the second would force those MVPDs to notify the FCC via an online portal if there’s a blackout for 24 hours or more. And both are drawing some fire.
To start with, here’s Rosenworcel’s comment on the rationale here, via Variety‘s Todd Spangler:
“Enough with the blackouts,” Rosenworcel said in a statement. “When consumers with traditional cable and satellite service turn on the screen, they should get what they pay for. It’s not right when big companies battle it out and leave viewers without the ability to watch the local news, their favorite show, or the big game. If the screen stays dark, they deserve a refund.”
This appears to be just about broadcast affiliates, so it wouldn’t cover disputes affecting the likes of ESPN or TBS. Beyond that, carriage disputes do often currently see some level of rebate as it is, with Charter recently handing out a $15 credit to subscribers over the 12-day Disney blackout (including both broadcast network ABC and cable networks like ESPN) and DirecTV giving a $10 credit over the 12-week Nexstar dispute (involving local broadcast affiliates). This would potentially involve a more regulated version of what level of rebate should be offered (these are currently voluntary rebates from the MVPDs). But some groups are strongly against that, including ACA Connects (which represents 500-plus small- and mid-size cable companies):
“The nation’s independent broadband and cable providers work hard every day to deliver high-quality programming and services to their customers at fair prices,” ACA Connects president/CEO Grant Spellmeyer said in a statement. “They hate blackouts as much as anyone. Unfortunately, the proposals announced today do not appear to address the root cause of these blackouts: the insatiable demand of broadcasters for outrageous, ever-increasing fees. We urge the FCC to focus on tackling this underlying problem and to avoid proposals that are more likely to make it worse by giving mega-broadcasters even more leverage in their negotiations with smaller cable operators.”
The NCTA – The Internet & Television Association, which represents larger MVPDs, declined to comment to Variety. So this isn’t providers necessarily being unilaterally against this. But the ACA Connects opposition is notable. And there’s some rationale behind it; media analyst Phillip Swann outlined some of that in a column on his TV Answer Man site titled “FCC Proposal to End TV Blackouts Is Full of Favoritism & Fecklessness“:
While we approve of the sentiment of [Rosenworcel’s] remarks, most, if not all, cable and satellite operators already provide rebates to viewers who lose channels in carriage disputes. By example, DIRECTV provided a $10 rebate to subscribers in the recent Nexstar dispute, albeit it was a one-time credit. Charter’s Spectrum TV also voluntarily provided a $15 credit to customers in last month’s Disney 11-day blackout. But if the FCC requires cable and satellite operators to provide the rebate by law, it would give the broadcasters more leverage in the negotiations, particularly if the rebates were larger and more frequent. This would actually ’empower’ the broadcasters to play hardball in carriage talks, which could lead to more blackouts. The rebate requirement would do nothing to put pressure on the broadcasters to settle the dispute.
As Swann notes, too, the second proposal on the portal notification doesn’t seem likely to actually accomplish all that much. It’s not hard to find out when blackouts are coming, whether via media coverage or via one or the other side (or more frequently, both) warning viewers and lobbying for their position while blaming the other side.
These are just proposals for comment at this point, though. They’re far from a finalized form, and further still from actual implementation. So there’s still plenty that could change with them. We’ll see what happens with these and where it goes from here.
