FCC official urges firms to solve broadcast fights

WASHINGTON Tue Mar 1, 2011 6:41pm EST

WASHINGTON (Reuters) - Broadcasters and cable companies should not wait for the U.S. government to intervene in spats over fees for broadcast content, a communications regulator said on Tuesday.

"Please go forward and continue to negotiate and continue to reach deals. Don't rely on government to reach that deal for you," Federal Communications Commission member Robert McDowell said at the National Association of Broadcasters' (NAB) State Leadership Conference.

The FCC on Thursday will consider amending its rules related to retransmission consent, or the negotiations over how much TV distributors should pay for the right to carry the free-to-air broadcast signals of ABC, CBS, Fox and NBC.

McDowell said an unintended consequence of opening a comment period on an item is it can "raise expectations that the government is going to somehow intervene."

He said he hoped cable companies and broadcasters would continue with good faith negotiations and not "wait for the FCC to change the dynamics somehow."

While most retransmission consent negotiations go on quietly behind closed doors, the disputes caught widespread attention in November after Cablevision Systems Corp failed to reach a timely programing deal with News Corp for Fox programing.

As a result, more than 3 million New York-area homes experienced a 15-day blackout of local Fox news, the opening of the World Series baseball championship and popular shows like "House," "Glee" and "The Simpsons."

The FCC largely stays out of such fights, asking companies to negotiate fees in good faith, but after the high profile Fox-Cablevision spat the agency pledged to explore actions to protect customers from blackouts.

BALL IN FCC'S COURT

"There's probably no single issue that is of greater concern to the economics of broadcasting than the resolution of retransmission consent," said Gordon Smith, NAB's president and chief executive, said at the conference.

Smith noted that a legislative solution to retransmission disputes would be difficult to pass given the current state of gridlock on most issues in Congress. "The ball is in the court of the FCC," he said.

But sweeping changes are not possible without congressional consent as the FCC has limited authority in this area.

"The commission's power is limited to looking at the good faith-bad faith dichotomy. The statute specifically says that merely asking for more money does not constitute bad faith," McDowell said.

McDowell urged the conference attendees against using the FCC's plans to take up retransmission consent at its monthly meeting on Thursday as an excuse to stop negotiations in hopes of government intervention.

But he said Thursday's measure will provide plenty of opportunity for those interested to comment as the FCC considers changes to the rules governing retransmission consent negotiations.

(Reporting by Jasmin Melvin; Editing by Steve Orlofsky)

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