In compliance with the tenets of the STELA Reauthorization Act of 2014 (STELARA), the FCC released an order last week implementing certain STELARA provisions pertaining to retransmission consent negotiations among broadcasters and multichannel video program distributors (MVPDs).

Signed into law last December, STELARA extends for five years the statutory license that grants direct broadcast satellite (DBS) operators the right to retransmit broadcast television programming to their customers. In addition to extending the compulsory satellite license, STELARA also mandates several important changes to the retransmission consent process that lay the groundwork for future reforms. Such changes include provisions that prohibit broadcasters from participating in joint retransmission consent negotiations with other broadcasters that serve the same market and from  preventing the entry of “significantly viewed” signals from other designated market areas into their local markets. Among other things, STELARA also requires the FCC to review its definition of “good faith negotiations” within the context of retransmission consent and establish a technical working group to make recommendations on a downloadable security system to replace the existing “CableCard” set top box security solution.

Specifically, the FCC’s order incorporates into the agency’s rules STELARA Sections 101 and 103(b) which extend the compulsory license sunset date to December 31, 2019 and prohibit a television broadcast station from “coordinating negotiations or negotiating on a joint basis with another television broadcast station in the same local market . . . to grant retransmission consent” to a MVPD unless the stations in question are commonly owned or controlled. Pursuant to STELARA Section 105, the FCC also repealed its rule forbidding the deletion or repositioning of local commercial television stations by MVPDs during audience ratings “sweeps” periods. With respect to distant market significantlyviewed channels, the order directs broadcasters not to limit the ability of MVPDs to carry such signals into their local markets unless the broadcast stations in question are under common control. The order also extends through January 1, 2020 “good faith” negotiation requirements and existing restrictions against exclusive retransmission consent agreements between broadcasters and MVPDs.

Because the rule modifications were expressly mandated by STELARA and thus entail no exercise of the FCC’s administrative discretion, the FCC explained that “notice and comment procedures” for implementing the rule changes prescribed in the order “are unnecessary under the ‘good cause’ exemption to the Administrative Procedure Act.”