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FCC Makes “Bad Faith” Retransmission Consent Finding for 20 Broadcasters

Randy Sukow Nov 8, 2019

In the 27 years since the Cable Act of 1992 gave TV broadcasters the right to negotiate “retransmission consent” for cable, satellite and other multichannel providers to air their local signals, the FCC historically has given the stations and stations groups wide leeway to conduct those negotiations. But today the Commission handed broadcasters a rare rebuke by finding that 20 TV stations belonging to nine different station groups acted in bad faith in negotiations for carriage of their signals on AT&T’s DIRECTV satellite and U-verse services.

“As of the release date of this order, these subscribers have been without access to the defendant stations’ signals through DIRECTV and U-verse for approximately five months,” the FCC said. The order urges AT&T and the broadcasters “to expeditiously go to the bargaining table” to settle the dispute. It does not mention other possible sanctions should broadcasters continue to violate good-faith rules.

"This was clearly one of the more egregious examples of how broadcasters routinely hold consumers hostage into paying higher and higher retrans fees, rather than being stewards of the public airwaves," an AT&T spokesperson said in an Axios report.

Broadcaster monopoly control over local signals and unreasonable negotiations have long been a complaint of rural broadband and video service providers. Recently, Frank Scotello, NRTC’s senior VP of Operations and Programming, noted one rural provider saw the cost of offering local signals increased by 387 percent.

The FCC in a Memorandum Opinion and Order found that “including a persistent refusal to negotiate, an unreasonable delay of negotiations, and a failure to respond to AT&T’s proposals, violated each of the per se good faith standards raised in AT&T’s Complaint.” The Commission cited existing good-faith rules that stations may not refuse to negotiate with multichannel video program distributors (MVPDs); must agree to meet with MVPDs in a timely manner at reasonable locations and must explain their reasons for rejecting MVPD retransmission proposals.

While various station groups own the broadcast licensees in question, all the stations negotiated with AT&T as a block through a single representative. According to the order, AT&T contacted the representative in March 2019 to discuss renewing earlier retransmission agreements, which were to expire in late May and early June 2019.  AT&T filed its good-faith complaint with the FCC on June 18.

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