Modern Television Act of 2019 Would Undermine Local Television Retransmission Consent Negotiations

Two leading members of the U.S. House of Representatives, Steve Scalise (R LA) and Anna Eshoo (D CA) have teamed up to introduce the Modern Television Act of 2019.  While purportedly designed to help consumers, we believe this legislation would undermine the current retranmission consent process, which is essential for funding local journalism.  According to Rep. Eshoo’s website, the legislation:

  • Extends the so called “Good Faith” negotiation requirements (that otherwise expire on December 31st) and applies these requirements to small- and medium-sized cable operator buying groups. This will allow smaller competitors to band together in negotiations for programming and lower costs for consumers. (Effective 90 days after enactment.)
  • Protects consumers from experiencing broadcast blackouts when MVPDs and broadcasters fail to extend an agreement by requiring MVPDs carry a broadcast signal while the parties continue negotiations for up to 60 days. Parties are retroactively paid for their content aired during this time. (Effective 90 days after enactment.)
  • Repeals retransmission consent, compulsory copyright licenses, and several other outdated statutory provisions and regulations. This would allow free-market contract negotiations to happen under traditional copyright law. (Effective 42 months after enactment.)
  • Establishes a mechanism by which the FCC may, but is not required to, compel parties to seek “baseball-style” binding arbitration through a neutral third-party arbitrator, following an extended impasse or a finding of bad faith. Consumers are protected from blackouts that otherwise would have occurred, and copyright holders are paid for their content during this process. (Effective 42 months after enactment.)
  • Preempts federal, state, and local authority to regulate rates of cable services. (Effective 42 months after enactment.)
  • Requires the Government Accountability Office to report specific metrics about the impact of this Act on consumer and the marketplace every two years. Based on the totality of these metrics the FCC must determine if this Act has had a net positive, net negative, or indeterminate impact on consumers and the marketplace. If the FCC finds a net negative impact, it must recommend specific policies for Congress to improve the marketplace.
  • Ensures consumers have access to local programming by retaining the ability of a local television broadcast station to require carriage on cable and satellite providers in their local market. (Effective immediately, no change in law.)

NYSBA opposes this legislation. The legislation calls for significant government intrusion into the free market retransmission consent negotiation process.  Since its inception in 1992, the retransmission consent process has worked well.  Local TV stations are being compensated for the most popular programming that is seen on a cable or satellite service.  Broadcast related retransmission consent fees remain well below the programming fees paid by cable operators for cable networks, even though local stations attract more viewers.

Perhaps most importantly, government regulations actually encourage blackouts.  Rather than negotiating in the free market, in our opinion, cable and satellite systems use government regulations as leverage.  We are witnessing this process in action right now.  For example the number of retransmission consent disputes with AT&T has increased recently.  These new disputes just happen to coincide with the satellite industry’s desire to extend the Satellite Television Extension and Localism Act Reauthorization (STELAR).  This legislation not only allows satellite companies to import distant TV signals, it gives the government some authority over retransmission consent negotiations.  It seems that every time STELAR is up for renewal, there is an increase in retransmission consent disputes.  The so called “Modern Television Act of 2019” would simply encourage more disputes.

For more information on the Modern Television Act of 2019 click HERE.

 

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