Implementation of Provisions of the Television Viewer Protection Act of 2019 Governing Negotiation of Retransmission Consent Between Qualified Multichannel Video Programming Distributor Buying Groups and Large Station Groups
| Published date | 18 June 2020 |
| Citation | 85 FR 36798 |
| Record Number | 2020-11130 |
| Section | Rules and Regulations |
| Court | Federal Communications Commission |
Federal Register, Volume 85 Issue 118 (Thursday, June 18, 2020)
[Federal Register Volume 85, Number 118 (Thursday, June 18, 2020)]
[Rules and Regulations]
[Pages 36798-36801]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-11130]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[MB Docket No. 20-31; FCC 20-63; FRS 16773]
Implementation of Provisions of the Television Viewer Protection
Act of 2019 Governing Negotiation of Retransmission Consent Between
Qualified Multichannel Video Programming Distributor Buying Groups and
Large Station Groups
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Federal Communications Commission
(Commission) revises its rules governing good faith negotiation of
retransmission consent, to implement provisions of the Television
Viewer Protection Act of 2019 governing negotiations between qualified
multichannel video programming distributor buying groups and large
broadcast station groups.
DATES: These rule revisions are effective on July 20, 2020.
FOR FURTHER INFORMATION CONTACT: For additional information on this
proceeding, contact Raelynn Remy of the Policy Division, Media Bureau
at [email protected], or (202) 418-2936.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order (Order), FCC 20-63, adopted on May 12, 2020, and released on
May 13, 2020. The full text is available for public inspection and
copying during regular business hours in the FCC Reference Center,
Federal Communications Commission, 445 12th Street SW, Room CY-A257,
Washington, DC 20554. This document will also be available via ECFS at
FCC-20-63A1.docx. Documents will be available electronically in ASCII,
Microsoft Word, and/or Adobe Acrobat. The complete text may be
purchased from the Commission's copy contractor, 445 12th Street SW,
Room CY-B402, Washington, DC 20554. Alternative formats are available
for people with disabilities (Braille, large print, electronic files,
audio format), by sending an email to [email protected] or calling the
Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530
(voice), (202) 418-0432 (TTY).
Synopsis
1. In this Report and Order (Order), we revise Sec. 76.65 of our
rules, which governs good faith negotiation of retransmission consent,
to implement provisions in section 1003 of the Television Viewer
Protection Act of 2019 (TVPA).\1\ Under section 1003, the Commission
must adopt rules that provide for negotiation of retransmission consent
between ``qualified multichannel video programming distributor [MVPD]
buying group[s]'' and ``large [broadcast] station group[s]'' as those
terms are defined in the TVPA. As discussed below, we adopt our
proposals from the NPRM in this proceeding: (i) To define the term
``large station group'' as used in section 1003 to mean, in relevant
part, an entity whose individual television broadcast station members
collectively have a national audience reach of more than 20 percent;
\2\ (ii) to define the term ``qualified MVPD buying group'' as used in
section 1003 to mean, in relevant part, an entity that negotiates on
behalf of MVPDs that collectively serve no more than 25 percent of all
households receiving service from any MVPD in a given local market; \3\
and (iii) to codify in Sec. 76.65 of our rules the provisions
governing negotiation of retransmission consent between qualified MVPD
buying groups and large station groups, as well as the definitions of
``local market'' and ``multichannel video programming distributor'' set
forth in section 1003(b)(3). As proposed, we also make minor conforming
changes to Sec. 76.65.
---------------------------------------------------------------------------
\1\ This Order adopts rules that implement only section 1003 of
the TVPA. The Media Bureau has addressed implementation of section
1004 of the TVPA, which establishes truth-in-billing requirements
applicable to MVPDs and providers of fixed broadband internet access
service, in a separate proceeding. Through this rulemaking, we
fulfill our statutory obligation to revise our rules to specify that
``certain small MVPDs can meet the obligation to negotiate
[retransmission consent] in good faith . . . by negotiating with a
large station group through a qualified MVPD buying group.''
\2\ Aside from satisfying the audience reach requirement, a
``large station group'' otherwise must meet the definition set forth
in section 325(b)(7)(D) of the Act.
\3\ Aside from satisfying this requirement, a ``qualified MVPD
buying group'' otherwise must meet the definition set forth in
section 325(b)(7)(C) of the Act.
---------------------------------------------------------------------------
I. Background
2. In December 2019, Congress enacted the TVPA, which is the latest
in a series of statutes that have revised the Communications Act of
1934 (Act) to establish parameters for the carriage of television
broadcast stations by MVPDs.
[[Page 36799]]
Section 1003 of the TVPA revised section 325(b) of the Act principally
by allowing smaller MVPDs to negotiate collectively as a buying group
for retransmission consent with large broadcast station groups.
Specifically, section 1003(a)(3) revised section 325(b)(3)(C) by adding
new subsection 325(b)(3)(C)(vi), which directs the Commission to
commence a rulemaking proceeding to revise its retransmission consent
rules to specify that: (1) A [MVPD] may satisfy its obligation to
negotiate retransmission consent in good faith under section
325(b)(3)(C)(iii) with a large broadcast station group by designating a
qualified MVPD buying group to negotiate on its behalf, so long as the
qualified MVPD buying group itself negotiates in good faith in
accordance with such clause; (2) it is a violation of the obligation to
negotiate in good faith under section 325(b)(3)(C)(iii) for the
qualified MVPD buying group to disclose the prices, terms, or
conditions of an ongoing negotiation or the final terms of a
negotiation to a member of such group that is not intending, or is
unlikely, to enter into the final terms negotiated by the group; and
(3) a large broadcast station group has an obligation to negotiate
[retransmission consent] in good faith under section 325(b)(3)(C)(ii)
with respect to a negotiation with a qualified MVPD buying group.
3. In addition, section 1003(b) of the TVPA amended section
325(b)(7) of the Act principally by adding new subsections 325(b)(7)(C)
and (D), which define the terms ``qualified MVPD buying group'' and
``large station group,'' respectively, for the purpose of applying the
new good faith negotiation provisions of section 325(b)(3)(C)(vi).\4\
New section 325(b)(7)(C) of the Act defines ``qualified MVPD buying
group,'' in relevant part, as an entity that:
---------------------------------------------------------------------------
\4\ Section 1003(b) also amended section 325(b)(7) of the Act by
adding subsections (b)(7)(E) and (F), which define the terms ``local
market'' and ``multichannel video programming distributor,''
respectively.
---------------------------------------------------------------------------
Negotiates [retransmission consent] on behalf of two or
more multichannel video programming distributors--
none of which is a [MVPD] that serves more than 500,000
subscribers nationally; and
that do not collectively serve more than 25 percent of all
households served by a [MVPD] in any single local market in which the
applicable large station group operates.
4. Moreover, new section 325(b)(7)(D) of the Act defines ``large
station group'' as a group of television broadcast stations that are
directly or indirectly under common de jure control permitted by the
regulations of the Commission, generally negotiate agreements for
retransmission consent as a single entity, and include only television
broadcast stations that have a national audience reach of more than 20
percent.
5. In January 2020, the Commission issued the NPRM, which proposed
to revise section 76.65 of its rules as set forth above. The pleading
cycle for the NPRM ended on March 16, 2020. Three parties filed
comments in response to the NPRM,\5\ and no parties filed reply
comments. Commenters uniformly support our proposals.
---------------------------------------------------------------------------
\5\ These parties are: ACA Connects--America's Communications
Association (ACA Connects); the National Association of Broadcasters
(NAB); and NTCA--the Rural Broadband Association (NTCA).
---------------------------------------------------------------------------
II. Discussion
6. We adopt the unopposed revisions to section 76.65 of our rules
proposed in the NPRM. First, we revise Sec. 76.65 to define the term
``large station group'' as, among other things, an entity whose
individual television station members collectively have a national
audience reach of more than 20 percent. We conclude that this
interpretation of the term ``large station group'' finds support in the
text and structure of the TVPA, and would best effectuate Congressional
intent.\6\ In particular, as we noted in the NPRM, the text of the
first two clauses in the definition of ``large station group'' require,
respectively, that stations comprising a ``large station group'' be
under ``common de jure control'' and negotiate agreements as a ``single
entity.'' We find that these two requirements properly characterize
only stations that collectively comprise a group, rather than
individual stations, and that the third clause of the definition thus
should be interpreted as imposing a requirement that must be true of
the stations collectively. Moreover, as we observed in the NPRM, the
TVPA contemplates that ``qualified MVPD buying groups'' and ``large
station groups'' would be counterparties in a retransmission consent
negotiation. Because the former term imposes a market share cap of 25
percent on the MVPDs ``collectively,'' we conclude that the 20 percent
market share threshold for ``large station groups'' similarly should be
construed to apply to the stations collectively.\7\ Finally, given that
a key purpose of the new good faith negotiation provisions is to level
the playing field by ``allow[ing] smaller MVPDs to collectively
negotiate as a buying group [with large station groups] for
retransmission consent,'' we adopt our tentative finding that Congress
could not have intended to create a collective negotiation mechanism to
address the growing bargaining power of large station groups but then
defined those groups in a way that would render the mechanism
unavailable as a practical matter. As we stated in the NPRM, a contrary
interpretation, whereby each station in the group individually must
have at least a 20 percent national audience reach, would be illogical
given that there are currently no stations that meet this threshold.
---------------------------------------------------------------------------
\6\ As we noted in the NPRM, this interpretation also is
harmonious with the Commission's ownership restrictions.
\7\ We do not find that the presence of the term
``collectively'' in the statutory definition of ``qualified MVPD
buying group,'' as contrasted with the absence of that term in the
definition of ``large station group,'' compels a different reading
of the statute. In particular, we agree with ACA Connects's
assertion that the structure of the respective definitions required
that Congress insert the word ``collectively'' in the former
definition, but not in the latter.
---------------------------------------------------------------------------
7. We also adopt our proposal to construe the phrase ``all
households served by a [MVPD]'' in the statutory definition of
``qualified MVPD buying group'' to mean all households that receive
service from any MVPD, rather than all households served by a specific
MVPD in a given local market. Because the percentage of households that
subscribe to a particular MVPD (or class of MVPDs) relative to the
total number of households that subscribe to any MVPD in a given market
is a competition metric that the Commission historically has utilized,
we conclude that this is the most reasonable reading of the relevant
phrase. We also believe, as noted in the NPRM, that adopting the
alternative interpretation would create practical problems given that
the statute provides no guidance as to which MVPD in a given market
should serve as the benchmark for the relevant threshold.
8. Finally, we adopt our proposals: (i) To codify in Sec. 76.65
the provisions governing negotiation of retransmission consent between
qualified MVPD buying groups and large station groups set forth in
section 325(b)(3)(C)(vi)(I)-(III) of the Act, as added by section
1003(a)(3) of the TVPA and the definitions of ``local market'' and
``multichannel video programming distributor'' set forth in section
325(b)(7)(E) and (F) of the Act, as added by section 1003(b)(3) of the
TVPA; and (ii) to delete the phrase ``as defined in 17 U.S.C. 122(j)''
in Sec. 76.65(b)(1)(viii) and (ix). Commenters uniformly support
[[Page 36800]]
these revisions to Sec. 76.65, and no party has opposed them.\8\
---------------------------------------------------------------------------
\8\ Although NTCA--the Rural Broadband Association ``supports
the Commission's proposal as an initial first step toward fixing the
broken retransmission consent process,'' it asserts that the
Commission must go further to address anticompetitive behavior by
content providers, including forced tying, tiering, and other unfair
bargaining tactics. Those issues, however, were not discussed in the
NPRM and are therefore beyond the scope of this proceeding.
---------------------------------------------------------------------------
9. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), the Commission has prepared this Final Regulatory
Flexibility Analysis (FRFA) concerning the possible significant
economic impact on small entities by the rules adopted in the attached
Order. The Commission will send a copy of the Order, including this
FRFA, to the Chief Counsel for Advocacy of the Small Business
Administration (SBA). In addition, the Order and FRFA (or summaries
thereof) will be published in the Federal Register.
10. In this Order, pursuant to section 325(b)(3)(C) of the Act, as
amended by section 1003 of the Television Viewer Protection Act of 2019
(TVPA), we revise our retransmission consent rules to specify, among
other things, that certain small multichannel video programming
distributors (MVPDs) may satisfy their obligation to negotiate
retransmission consent in good faith by negotiating with a large
broadcast station group through a qualified MVPD buying group. In
particular, we revise Sec. 76.65 of our rules to define: (i) The term
``large station group'' as used in section 1003 of the TVPA to mean, in
relevant part, an entity whose individual television station members
collectively have a national audience reach of more than 20 percent;
and (ii) the term ``qualified MVPD buying group'' as used in section
1003 to mean, in relevant part, an entity that negotiates on behalf of
MVPDs that collectively serve no more than 25 percent of all households
receiving service from any MVPD in a given local market. In addition,
we codify in Sec. 76.65 the provisions governing negotiation of
retransmission consent between qualified MVPD buying groups and large
station groups, as well as the definitions of ``local market'' and
``multichannel video programming distributor'' set forth in section
1003(b)(3). We also make minor conforming changes to Sec. 76.65.
11. The action in this Order is authorized pursuant to sections
4(i), 4(j), 303(r), and 325 of the Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 154(j), 303(r), and 325, and section 1003 of
the Television Viewer Protection Act of 2019.
12. Without mentioning the IRFA, a couple of parties commented on
the impact of the rules adopted in this Order on small entities. For
example, NTCA asserts that a major challenge faced by smaller MVPDs in
negotiating retransmission consent is the unequal bargaining power they
possess due to their size relative to the bargaining power of
programmers. NTCA argues that large MVPDs are able to obtain more
favorable retransmission consent rates because they provide
broadcasters with a larger number of potential viewers that, in turn,
generates additional advertising revenue. By contrast, NTCA contends,
broadcasters are able to extract higher per-subscriber rates from
smaller MVPDs because the broadcaster stands to lose little by denying
the smaller MVPD access to programming. According to NTCA, smaller
MVPDs often do not have the option of discontinuing video programming
because a substantial portion of their customers cannot receive an
over-the-air broadcast signal, and thus rely on their MVPD to carry
broadcast stations that serve as a principal source for local news and
weather reports. NTCA argues that allowing smaller MVPDs to negotiate
retransmission consent agreements through a larger buying group will
enable them to obtain access to programming at more reasonable rates.
ACA Connects argues that swift adoption of the proposed rules will
enable smaller MVPDs to utilize the TVPA's new protections promptly.
13. The RFA directs agencies to provide a description of, and where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. The RFA generally defines
the term ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A small business concern is one which: (1) Is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the SBA. Below is a
list of such small entities:
Cable Companies and Systems
Cable System Operators
Open Video Services.
Satellite Master Antenna Television (SMATV) Systems
Direct Broadcast Satellite (DBS) Service
Television Broadcasting
14. The Order does not adopt any reporting or recordkeeping
requirements. The Order revises the Commission's rules to permit
certain small MVPDs to meet their statutory obligation to negotiate
retransmission consent in good faith by designating a qualified MVPD
buying group to negotiate on their behalf with a large broadcast
station group. In particular, the Order revises such rules by
clarifying the meaning of the statutory terms ``large station group''
and ``qualified MVPD buying group'' so as to facilitate smaller MVPDs'
use of the new collective bargaining provisions consistent with
Congressional intent. These rule revisions impose no new regulatory
compliance burdens on small television broadcast stations.
15. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its approach, which may
include the following four alternatives (among others): ``(1) the
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance and reporting requirements under the rule for such small
entities; (3) the use of performance, rather than design standards; and
(4) an exemption from coverage of the rule, or any part thereof, for
small entities.''
16. In this Order, the Commission implements section 1003 of the
TVPA in a way that will reduce burdens on smaller MVPDs that negotiate
retransmission consent against large broadcast station groups with
greater bargaining leverage by allowing such MVPDs to negotiate
collectively as a buying group. As noted, the rule revisions adopted in
the Order will not have an adverse economic impact on any small
entities, and would have a positive economic impact on smaller MVPDs
that choose to avail themselves of the TVPA's new collective bargaining
provisions in their negotiations with large broadcast station groups
that possess market power.
17. The Commission will send a copy of the Order, including this
FRFA, in a report to be sent to Congress pursuant to the Congressional
Review Act. In addition, the Commission will send a copy of the Order,
including this FRFA, to the Chief Counsel for Advocacy of the SBA. The
Order and FRFA (or summaries thereof) will also be published in the
Federal Register.
18. This document does not contain proposed new or revised
information
[[Page 36801]]
collection requirements subject to the Paperwork Reduction Act of 1995.
In addition, therefore, it does not contain any new or modified
``information burden for small business concerns with fewer than 25
employees'' pursuant to the Small Business Paperwork Relief Act of
2002.
19. Accordingly, it is ordered that, pursuant to the authority
found in sections 4(i), 4(j), 303(r), and 325 of the Communications Act
of 1934, as amended, 47 U.S.C. 154(i), 154(j), 303(r), and 325, and
section 1003 of the Television Viewer Protection Act of 2019, this
Report and Order is adopted, effective thirty (30) days after the date
of publication in the Federal Register. It is ordered that, pursuant to
the authority found in sections 4(i), 4(j), 303(r), and 325 of the
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j),
303(r), and 325, and section 1003 of the Television Viewer Protection
Act of 2019, the Commission's rules are hereby amended. It is further
ordered that, should no petitions for reconsideration or petitions for
judicial review be timely filed, MB Docket No. 20-31 shall be
terminated, and its docket closed. It is further ordered that the
Commission's Consumer and Governmental Affairs Bureau, Reference
Information Center, shall send a copy of this Report and Order,
including the Final Regulatory Flexibility Act Analysis, to the Chief
Counsel for Advocacy of the Small Business Administration. It is
further ordered that, pursuant to section 801(a)(1)(A) of the
Congressional Review Act, 5 U.S.C. 801(a)(1)(A), the Commission shall
send a copy of the Report and Order to Congress and the Government
Accountability Office.
List of Subjects in 47 CFR Part 76
Cable television, Communications.
Federal Communications Commission.
Cecilia Sigmund,
Federal Register Liaison Officer.
For the reasons discussed in the preamble, the Federal
Communications Commission amends part 76 of title 47 of the Code of
Federal Regulations (CFR) as set forth below:
PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE
0
1. The authority citation for part 76 continues to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 302a, 303,
303a, 307, 308, 309, 312, 315, 317, 325, 338, 339, 340, 341, 503,
521, 522, 531, 532, 534, 535, 536, 537, 543, 544, 544a, 545, 548,
549, 552, 554, 556, 558, 560, 561, 571, 572, 573.
0
2. Amend Sec. 76.65 by revising paragraphs (b)(1)(viii) and (ix) and
(b)(2) and adding paragraphs (b)(3) and (4) to read as follows:
Sec. 76.65 Good faith and exclusive retransmission consent
complaints.
* * * * *
(b) * * *
(1) * * *
(viii) Coordination of negotiations or negotiation on a joint basis
by two or more television broadcast stations in the same local market
to grant retransmission consent to a multichannel video programming
distributor, unless such stations are directly or indirectly under
common de jure control permitted under the regulations of the
Commission.
(ix) The imposition by a television broadcast station of
limitations on the ability of a multichannel video programming
distributor to carry into the local market of such station a television
signal that has been deemed significantly viewed, within the meaning of
Sec. 76.54 of this part, or any successor regulation, or any other
television broadcast signal such distributor is authorized to carry
under 47 U.S.C. 338, 339, 340 or 534, unless such stations are directly
or indirectly under common de jure control permitted by the Commission.
(2) Negotiation of retransmission consent between qualified
multichannel video programming distributor buying groups and large
station groups. (i) A multichannel video programming distributor may
satisfy its obligation to negotiate in good faith for retransmission
consent with a large station group by designating a qualified MVPD
buying group to negotiate on its behalf, so long as the qualified MVPD
buying group itself negotiates in good faith in accordance with this
section.
(ii) It is a violation of the obligation to negotiate in good faith
for a qualified MVPD buying group to disclose the prices, terms, or
conditions of an ongoing negotiation or the final terms of a
negotiation to a member of the qualified MVPD buying group that is not
intending, or is unlikely, to enter into the final terms negotiated by
the qualified MVPD buying group.
(iii) A large station group has an obligation to negotiate in good
faith for retransmission consent with a qualified MVPD buying group.
(A) ``Qualified MVPD buying group'' means an entity that, with
respect to a negotiation with a large station group for retransmission
consent--
(1) Negotiates on behalf of two or more multichannel video
programming distributors--
(i) None of which is a multichannel video programming distributor
that serves more than 500,000 subscribers nationally; and
(ii) That do not collectively serve more than 25 percent of all
households served by multichannel video programming distributors in any
single local market in which the applicable large station group
operates; and
(2) Negotiates agreements for such retransmission consent--
(i) That contain standardized contract provisions, including
billing structures and technical quality standards, for each
multichannel video programming distributor on behalf of which the
entity negotiates; and
(ii) Under which the entity assumes liability to remit to the
applicable large station group all fees received from the multichannel
video programming distributors on behalf of which the entity
negotiates.
(B) ``Large station group'' means a group of television broadcast
stations that--
(1) Are directly or indirectly under common de jure control
permitted by the regulations of the Commission;
(2) Generally negotiate agreements for retransmission consent under
this section as a single entity; and
(3) Include only television broadcast stations that collectively
have a national audience reach of more than 20 percent;
(3) Definitions. For purposes of this section and section 76.64 of
this subpart, the following definitions apply:
(i) ``Local market'' has the meaning given such term in 17 U.S.C.
122(j); and
(ii) ``Multichannel video programming distributor'' has the meaning
given such term in 47 U.S.C. 522.
(4) Totality of the circumstances. In addition to the standards set
forth in paragraphs (b)(1) and (2) of this section, a Negotiating
Entity may demonstrate, based on the totality of the circumstances of a
particular retransmission consent negotiation, that a television
broadcast station or multichannel video programming distributor
breached its duty to negotiate in good faith as set forth in paragraph
(a) of this section.
* * * * *
[FR Doc. 2020-11130 Filed 6-17-20; 8:45 am]
BILLING CODE 6712-01-P
