Some Broadcasters Would Ditch Must-Carry Rules, Attorneys Say
Some TV broadcasters could live without rules that allow stations to opt for mandatory carriage by pay-TV distributors, Skadden Arps attorney Antoinette Cook Bush said during a BroadbandUS.TV webcast on the FCC’s retransmission consent rules. “I think some broadcasters would say, ‘Get rid of all the rules,” Bush said. There is “a contingent of broadcasters that are very supportive of [must-carry rules] but there are a lot of broadcasters that are not and it would not matter to them if you got rid of must carry,” she said. Some broadcasters would also support eliminating network and syndicated exclusivity rules because they limit the geographic area in which stations can negotiate for exclusive programming rights, said Pillsbury Winthrop attorney John Hane.
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The FCC has the authority to make unenforceable existing contracts that call for market exclusivity, said Cristina Pauze, vice president of federal regulatory affairs for Time Warner Cable. The commission has taken similar steps in the past with regard to exclusivity provisions in contracts, she said, pointing to its MDU exclusivity ban and program access rules. “They could do it here also,” she said.
Independently owned pay-TV networks are hoping for new rules that will put them on more of an even footing with the major broadcast networks when it comes to negotiating carriage deals, said Richard Waysdorf, senior vice president of business affairs and distribution for Starz. “What we can charge is limited by what’s left over after all the broadcast groups have conjured up these deals that take up the bulk of what consumers are paying the cable systems,” he said. “It’s created two classes of programming networks,” he said -- those that also own broadcast networks and those that don’t. Broadcast-affiliated networks have an unfair advantage on the amount of programming the distributors are willing to buy, on launching new programming services and on the rates they get from distributors, he said.
Meanwhile, broadcast networks are getting more involved in their affiliates’ retransmission consent negotiations with cable operators, said Ross Lieberman, vice president of government affairs for the American Cable Association. Larger operators have also seen that trend, Pauze said. “We had potentially big impasses with both Fox and Sinclair, and in some of those instances we've had a station owner tell us ‘Well, I'd like to go with that deal, but I can’t,'” because the network wants more and has final say, she said. “The network, if it doesn’t own the station, should not be the one approving the agreement.”