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FCC bans broadcaster collusion in retrans negotiations

Mon, 03/31/2014 - 1:31pm
Brian Santo

The FCC issued two key decisions today, one that prohibits broadcast stations from joining together in retransmission consent negotiations, the other opening another 100 MHz of spectrum for Wi-Fi applications.

Under the new regulations, two or more separately owned Top-4 broadcasters in the same market would be prohibited from banding to negotiate retrans deals.

The practice has been called “collusion” by the American Cable Association (ACA), which represents smaller cable operators who have long claimed they are at a disadvantage in retransmission negotiations with allied broadcasters.

The current FCC apparently agreed. Its new rules will take effect in 30 days.

The rules are a victory for cable operators over broadcasters, but a dark cloud might be forming on the horizon. A House Committee has just released a version of a bill that would allow broadcast stations to band together for retransmission negotiations, provided an MVPD agreed to the arrangement.

The bill in question, the Satellite Television Extension and Localism Act (or STELA), is still in its early stages of the legislative process, which means there will be plenty of opportunity for the cable industry to win removal of that provision. Nonetheless, if left in, it would trump the regulations issued today by the FCC. The ACA is gearing up to campaign for this provision's removal.

ACA president and CEO Matthew M. Polka said, “Adoption of today’s order extracts from a broadcaster’s bite one of several practices that most obviously harm consumers and competition.  ACA members are ecstatic that the FCC is finally banning coordinated retransmission consent negotiation between two separately owned, top-rated stations in the same market.”

NCTA president and CEO Michael Powell said, “As we have long maintained – and as the Department of Justice has confirmed – such coordinated behavior harms consumers by artificially inflating the cost of watching over-the-air broadcast stations on cable systems.  By enforcing the ‘good faith’ provisions of the retransmission consent regime, the FCC’s sensible action will help protect consumers from anticompetitive marketplace practices.”

Separately, the Federal Communications Commission adopted a Report and Order modifying the rules governing the operation of Unlicensed National Information Infrastructure (U-NII) devices operating in the 5 GHz band.

The rules adopted today remove the current restriction on indoor-only use of spectrum and increase the permissible power which will provide more robust access in the 5.150-5.250 GHz band. This in turn will allow U-NII devices to better integrate with other unlicensed portions of the 5 GHz band to offer faster speeds and reduce congestion at crowded Wi-Fi hot spots such as airports and convention centers, the Commission explained.

Powell offered comment on this measure as well: “By enabling higher power, outdoor Wi-Fi operations to share an underutilized portion of the 5 GHz band, Chairman Wheeler and his colleagues have embraced a win-win solution that will help alleviate existing congestion and deliver a substantially faster Wi-Fi experience to American consumers.”

The Telecommunications Industry Association (TIA) applauded the move. Grant Seiffert, president of TIA, said “the FCC is optimizing critical swaths of unlicensed spectrum to enable next generation Wi-Fi.”

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