Taking a novel approach to broadcast retransmission consent, Senate Commerce Committee Chairman Jay Rockefeller (D-WV) joined forces with ranking committee member John Thune (R-SD) in unveiling a proposal that would allow subscribers to multichannel video program distribution (MVPD) services to select the local broadcast channels they want while permitting MVPDs to bill subscribers directly for licensing fees connected with the broadcast channels of their choice.
The “Local Choice” proposal announced last Friday by Rockefeller and Thune is intended to eliminate broadcast channel blackouts that, in recent years, have occurred with increasing frequency when broadcasters and MVPDs fail to agree on retransmission terms. In the words of a two-page summary distributed by the committee, the plan guarantees that “viewers have transparency on retransmission prices” and also “gives viewers more control over their MVPD subscription” as it requires every local broadcast TV channel “to be made available to MVPD subscribers.” Observers also believe the plan has the potential to improve the quality of local television by forcing broadcasters to compete directly for viewers.
Under the proposed Local Choice option, broadcasters would set a price each year that individual subscribers would be required to pay to receive the broadcasters’ signals through the MVPD. The MVPD, in turn, would collect these fees from the subscribers and remit them to the broadcasters. MVPDs would not be permitted to tie receipt of broadcast channels to the purchase of non-broadcast programming. Existing “carry one, carry all” requirements for cable and satellite basic tier channels would remain in place, and local broadcasters would still be able to select among the current options of entering into retransmission negotiations with MVPDs or demanding “must-carry” rights.
A Senate Commerce Committee staffer told reporters that Rockefeller and Thune are urging that their proposal be “seriously considered as part of the STELA reauthorization process.” Last month, members of the House and of the Senate Judiciary Committee adopted separate bills that would extend the compulsory licensing terms of STELA (i.e., the Satellite Television Extension and Localism Act) through the end of 2019, and House and Senate negotiators are expected to begin the mark-up process next month. Countering, however, that the Local Choice proposal “represents a significant rewrite of the Communications Act,” National Association of Broadcasters (NAB) executive vice president Dennis Wharton stressed that NAB “has always supported a clean reauthorization of STELA, and we do not believe this bill is an appropriate vehicle for reviewing the retransmission consent process.”