Retransmission consent negotiations have been coming down to the wire more and more in recent years, as broadcasters have sought to recoup more of the value they feel their signals have, and cable operators have resisted increases in their expenses. Federal Communications Commission (“FCC”) rules currently require cable operators to notify both subscribers and the local franchise authority (“LFA”) 30 days before a change in services or rates. Removal of a channel because of expiration of a retransmission consent agreement falls within the scope of the rule. However, when retransmission consent negotiations continue right up to the 11th hour before an existing agreement expires, or the parties agree to extend an agreement a week or even a day at a time, there are obvious practical problems with a 30-day rule that requires notice before you know whether a channel is actually going to be removed.
The FCC is now proposing to modify its rules to require notification to viewers of removal of a channel because of a failed retransmission consent negotiation be given “as soon as possible” when negotiations fail less than 30 days before removal of the channel. Notices 30 days in advance would continue to be required if negotiations fail more than 30 days before the end of a retransmission consent contract and for all channel and rate changes not related to last-minute retransmission consent negotiations. The FCC also seeks comments on whether to reduce the 30 day notice period to 15 or 5 days.
The FCC is also proposing to eliminate its own requirement for separate notices to the LFA, because LFAs have the authority to specify for themselves what notices they want, either through their own franchising process or through authority granted to them by the Communications Act.
Eliminating notices at the 30-day point when the cable operator does not yet know the final outcome of negotiations makes sense. Right now, cable subscribers may be notified of the impending removal of a channel, but the channel may never be removed. And what happens if negotiations proceed, stall, and resume? How many notices should subscribers get, and how do you avoid confusing them?
If notice of a prospective channel removal is not required until retransmission consent negotiations are considered to have failed, subscribers are more likely to have an accurate picture of what to expect.
Of course, the simpler a proposal looks, the more complicated it can become. The FCC asks how “as soon as possible” should be defined, as those words are far from precise in their meaning. It also asks how notices should be delivered – by newspaper ads (a method the FCC is moving toward abandoning as obsolete for notices of broadcast applications), by a slate or crawl on the channel being taken dark, or by some other method.
Finally, the FCC says that it will accept comments on other possible changes in notices that cable systems must give their subscribers.
Comments will be due 30 days after the Notice of Proposed Rulemaking is published in the Federal Register, with reply comments due 15 days later. Watch www.commlawblog.com for a post when the comment deadline is established.