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Consumer, Pay-TV Groups React to Anti-Blackout Legislation

17 Sep, 2013 By: Chris Tribbey

A House bill that would open up more options for pay-TV subscribers is earning early rave reviews from public advocacy groups and some pay-TV operators.

Dubbed the Video CHOICE (Consumers Have Options in Choosing Entertainment) Act of 2013, the proposed bill would amend the Communications Act of 1934, giving subscribers more choices when retransmission agreements between a broadcaster and pay-TV company expires.

The bill would give the Federal Communications Commission the power to prevent blackouts during retransmission fee negotiations, and would prevent companies from bundling pay channels with over-the-air channels. Consumers would also be given the option of opting out of broadcast channels.

The legislation would also call for the FCC to do a study on programming costs for regional and national sports networks in the top 20 regional sports markets, possibly opening the door for sports programming to be sold separately by pay-TV operators.

The proposed legislation comes after millions of Time Warner Cable subscribers lost access to CBS and Showtime content, including online, due to negotiations over retransmission fees.

U.S. Rep. Anna Eshoo, D-Calif., submitted the bill in the hopes of opening up more discussion among legislators over how consumers are treated during pay-TV disputes.

“A vibrant video marketplace is one in which there is healthy competition, consumer choice and basic protections to ensure consumers aren’t caught in the middle of a dispute they have no control over,” Eshoo said. “Recurring TV blackouts, including the 91 U.S. markets impacted in 2012, have made it abundantly clear that the FCC needs explicit statutory authority to intervene when retransmission disputes break down. This discussion draft is intended to spur constructive, actionable debate on ways to improve the video marketplace for video content creators, pay-TV providers and, most importantly, consumers.”

Both AT&T and Verizon — which operate the U-verse and FiOS pay-TV services, respectfully — praised the proposed legislation.

“Representative Eshoo’s legislation highlights the need to fix a broken retransmission consent system that now too often leaves consumers in the dark,” said Peter Davidson, SVP of federal government affairs for Verizon. “We look forward to working with Representative Eshoo and other members of Congress who believe that consumers would be well served by reforming this outdated system.”

Jeffrey Blum, deputy general counsel for Dish Network, said the legislation is a right step toward fixing “the broken retransmission consent system.”

“Critically, the discussion draft proposes concrete legislative ideas to give consumers greater choice over their programming, tackles the growing problem of bundling of cable channels with network channels, and empowers the FCC with significant authority to curtail blackouts,” he said.

Matthew M. Polka, president and CEO of the American Cable Association (ACA), called the proposals “common sense reforms.”

“ACA agrees that the nation’s top media regulator — the Federal Communications Commission — should have the authority to prevent TV signal blackouts as part of its mandate to protect the public interest, convenience and necessity,” he said. “We also agree with Rep. Eshoo that consumers should not have to buy local TV stations that elect retransmission consent as part of their pay-TV package.”

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