FCC Seeks Comment on Obligation for MVPDs to Report TV Station Blackouts

The FCC has released a Notice of Proposed Rulemaking (NPRM) requesting public comment on a process requiring multichannel video program distributors (MVPDs) – cable systems, Direct Broadcast Satellite (DBS) operators, and certain other video content delivery services – to give notice of local commercial television broadcast station blackouts due to breakdowns in retransmission consent negotiations between stations and MVPDs. The FCC believes that collecting such notices in a publicly available, centralized database would benefit the FCC and the public by providing comprehensive information about disruptions in local television station carriage.

An MVPD is permitted to carry the signal of a broadcast television station only if the station has elected mandatory carriage (“must carry”) or the parties have entered into a retransmission consent agreement setting forth the terms and conditions of carriage. When television stations first gained the right to negotiate terms of carriage in 1993, most television viewers could watch a local TV station only over-the air or on their local cable system. Because the cable system was typically the only available MVPD option, stations usually were not able to obtain cash compensation for carriage. This situation changed, however, with the advent of DBS and telco overbuilds, and to a certain extent the delivery of network and other programming through “over-the-top” (internet) platforms.

As viewing options increased, viewers were able to shift from one MVPD platform to another if their favorite stations were blacked out, and were unlikely to shift back once the blackout ended. Competition among MVPDs in local markets therefore provided television stations with greater leverage in retransmission consent negotiations. Retransmission consent compensation to broadcast stations – and station blackouts – increased dramatically between 2010 and 2020. Retransmission consent fees are now a primary revenue source for large television station groups, while MVPDs are under increasing pressure to cut costs as subscriber revenues are flat or decrease.

The FCC’s rules require parties to negotiate retransmission consent in good faith, but few complaints alleging failure of good faith negotiations are filed, and the FCC has little ability to end blackouts or resolve retransmission consent negotiation breakdowns. Because of their effect on constituents’ ability to watch their favorite TV programs, and because blackouts which involve large MVPDs and large station groups affect numerous markets and viewers, blackouts frequently become important issues for members of Congress.

Against this background, the FCC issued the NPRM to provide a way for the FCC and the public to access information about television station blackouts caused by the failure of an MVPD to obtain retransmission consent. The FCC proposes that MVPDs be required to provide notice to an FCC-hosted web portal within 48 hours of commencement of any retransmission consent related blackout which lasts for more than 24 hours, and to provide notice within two business days after the blackout ends. Notice would include the names of the MVPD and stations affected, the network affiliations and ownership group of the stations, the affected Designated Market Areas (DMAs), and the number of subscribers affected. This information would be available to the public, although MVPDs could request that the number of subscribers be kept confidential.

Specific matters the FCC has requested comment on are:

• • Whether such reporting should be mandatory or voluntary.
  • Whether reporting obligations should be imposed only on MVPDs, on broadcasters, or both.
  • How “blackouts” should be defined. The FCC asks if the definition should exclude Class A and LPTV stations.
  • What the appropriate threshold for reporting should be. The FCC asks if all blackouts that exceed 24 hours should be reportable, or whether the duration should be longer or shorter, or whether other factors should be considered.
  • Whether using an FCC-hosted portal, with one notice at the start of blackout and one at the end, is the most appropriate process for reporting blackouts.

Comments on the NPRM are due within 30 days after publication in the Federal Register, with reply comments due 60 days after publication.

If you have questions about the proposed television station blackout notification rules, please contact an attorney in our Media practice group.