Reforming Retransmission Consent

I. INTRODUCTION II. RETRANSMISSION CONSENT III. THE CURRENT DISPUTE: WHAT EACH PARTY WANTS A. Cable Providers B. Broadcasters C. Consumers IV. POSSIBLE SOLUTIONS A. FCC Proposals 1. Improving Good Faith Standards 2. Revision of Notice Requirements 3. Extending "Sweeps" Prohibition to Non-Cable MVPDs 4. Elimination of Network Nonduplication and Syndicated Exclusivity Rules B. Non-FCC Proposals 1. Interim Carriage 2. Mandatory Binding Arbitration 3. Does the FCC Have the Necessary Authority? V. RECOMMENDATIONS AND CONCLUSIONS I. INTRODUCTION On October 16, 2010, approximately three million cable TV subscribers across the New York metropolitan area lost access to their local Fox stations and missed the first two games of the World Series. (1) Previously, on March 7, 2010, nearly 3.1 million households lost their local ABC signal and missed the first fourteen minutes of the Academy Awards. (2) In 2008, 1.5 million Time-Warner subscribers lost access to fifteen broadcast stations in fifteen local markets for one month. (3) For nearly one month in 2007, seven hundred thousand Mediacom subscribers in twelve states lost access to twenty-three stations including affiliates of Fox, ABC, NBC, CBS, and the CW. (4) In 2005, seventy-five thousand cable subscribers in Missouri, Louisiana, and Texas lost access to their local Nexstar broadcast affiliates for nearly one year. (5) Examples of these types of signal blackouts date back even further. (6) More recently, on February 18, 2011, Univision pulled its broadcast signal from 7,000 Rhode Island households for three months. (7) In March 2011, DISH Network consumers in seventeen markets lost their CBS, FOX, NBC, and CW signals for six days. (8) In September 2011, LIN TV pulled eight broadcast signals from the Mediacom cable systems in Florida, Michigan, and Indiana causing blackouts for nearly 1.2 million subscribers that lasted nearly six weeks. (9) Multiple other blackouts have occurred this year. (10) Each of these blackouts was the result of failed negotiations between the cable or satellite provider and the broadcaster. (11) Under the current regulatory scheme, broadcasters and cable providers must enter into negotiations with each other for permission to retransmit a broadcast signal over a cable system. (12) The vast majority of these retransmission consent negotiations are resolved privately, without government intervention and without the loss of broadcast signals to cable subscribers. (13) However, sometimes the negotiations reach an impasse, and the result can be signal blackouts for cable subscribers. When this happens, consumers are inevitably harmed. Recently, there has been a growing dispute between cable providers and broadcasters about how to deal with such breakdowns in negotiations. While cable providers call for reform of the retransmission consent regulations, broadcasters resist government intervention. (14) Meanwhile, the FCC has recognized the problem facing consumers and recently initiated proceedings to try to solve it. (15) This Note will examine the contours of the dispute between cable providers and broadcasters and discuss the possible solutions to this growing crisis. In Part II, a brief history of the retransmission consent regulations of the 1992 Cable Act is put forth as necessary background information. (16) Part III of the Note addresses the positions that cable companies and broadcasters have taken in the dispute. Part IV will discuss possible solutions to the dispute. Finally, Part V will offer some recommendations and conclusions as to what the best solution may be. II. RETRANSMISSION CONSENT Originally, cable television existed to serve locations that could not receive broadcast signals. (17) The cable company's job was to take the signal from the airwaves and retransmit it to a subscriber's household. …