Two competing bills were introduced in the House Thursday designed to reform retransmission consent and other FCC rules. The one that has greater support thus far would obligate MSOs to create a tier of channels provided through retransmission consent agreements, and would give the FCC authority to block blackouts when retransmission consent negotiations break down.

The Next Generation Television Marketplace Act, was introduced in the House by Reps. Steve Scalise and Cory Gardner.

The other bill is the Video Choice (Consumers Have Options In Choosing Entertainment) Act of 2013, introduced by Reps. Anna G. Eshoo and Zoe Lofgren.

The Next Gen TV Act proposes to simply eliminate many regulations. The Video Choice Act aims to make the current regulatory regime fairer.

Of the two, the latter seems as if it is being received far more warmly by the industry and consumer groups. The idea that the regulations governing video industry need revision is gaining support.

Scalise’s office announced the Next Gen TV Act, explaining, “The bill removes government interference from what should be strictly free market business relationships between and among content creators, network programmers, television broadcast stations, and multichannel video programming distributors.”

It would:

  • Repeal those provisions of the Communications Act that mandate the carriage and purchase of certain broadcast signals by cable operators, satellite providers, and their customers.
  • Repeal the Communications Act’s “retransmission consent” provisions and the Copyright Act’s “compulsory license” provisions.
  • Repeal ownership limitations imposed on local media operators, allowing businesses to evolve and adapt to today’s dynamic communications market.

With the Video Choice Act, Eshoo and Lofgren take a far less radical route.

This bill gives the FCC the authority to prevent blackouts if retransmission consent negotiations break down.

It prevents TV broadcast stations from colluding during retrains consent negotiations, something that should be extremely salient to smaller cable operators. No station can negotiate a retrans agreement “that is directly or indirectly conditioned on carriage of any other programming affiliated with such station (or with a person who owns or controls, is owned or controlled by, or is under common ownership or control with such station).’’

During the breakdown of negotiations between Time Warner Cable and CBS earlier this year, CBS blocked TWC broadband subscribers from accessing its content online. The Video Choice bill directs the FCC to determine if that constitutes a failure to negotiate in good faith. If the FCC determines the answer is “yes,” the FCC would presumably have the authority to demand the programmer desist.  

One provision establishes that “Each cable operator of a cable system shall offer its subscribers a separately available retransmission consent service tier that consists only of the signal of each television broadcast station electing retransmission consent…”

That tier would have to be optional. MSOs would be explicitly barred from compelling subscribers to accept the retrans tier.

Finally, it directs the FCC to conduct annual studies on the cost of regional and national sports networks to MVPDs.

The NCTA, Time Warner Cable, Suddenlink, and the American Television Alliance are among those who distribute their praise to both the Democrats and Republicans for recognizing that the system is broken and needs to be fixed. Smaller MSOs studiously did not mention Scalise or the Next Gen TV bill as they praised the Video Choice legislation.

American Cable Association (ACA) president and CEO Matthew M. Polka issued two statements. The first mentioned the Eshoo bill and bordered on the jubilant. In part, he said, “Retransmission consent was created by law, and ACA respects these lawmakers’ judgment that consumers should have the right to receive cable television service without also being forced to purchase the broadcast stations that elect retransmission consent.” The second mentioned the Scalise bill and thanked the Congressman for addressing the issues.

Earle MacKenzie, chief operating officer of Shenandoah Telecommunications and an ACA Board Member, praised the Video Choice bill and said, “It is time to overhaul the 1992 Cable Act because broadcasters should not be allowed to black out millions of innocent pay-TV consumers or charge excessive carriage fees to Shentel and other pay-TV providers for the right to retransmit 'free' TV signals.

"Shentel urges Congress to embrace with speed the reform proposals in Rep. Eshoo's bill because retransmission consent reform is an issue that impacts every consumer that subscribes to a video package."

The NCTA statement reads, “The bills introduced today by Reps. Eshoo and Scalise are very different, but each independently highlights what is quickly becoming a growing consensus – namely, that laws enacted over twenty years ago are out of sync with the realities of today’s video marketplace and in many cases serve to inhibit innovation, thwart fair competition, and harm consumers.  In particular, we welcome an examination of a retransmission consent regime that is increasingly fractured and in need of some repair.”

“We applaud Reps. Eshoo, Lofgren, Scalise, and Gardner for their efforts to reform the rules governing the distribution of broadcast TV stations and related matters,” said Suddenlink Chairman and CEO Jerry Kent. “Their bills represent an important step forward in protecting consumers from TV station blackouts and out-of-control retransmission costs.  We encourage Congress to engage in an open-minded discussion about solutions to these growing problems.”