New FCC chairman Tom Wheeler has a long to-do list - from overhauling net neutrality to coordinating a spectrum auction. But he is now adding an update to media ownership rules to his plate, a move that's intended - in part - to keep your cable prices down.

In a Thursday blog post, Wheeler admitted that the commission is two years behind in assessing its media ownership rules. The FCC is supposed to review the rules every four years, but has not done so for six. "So it goes without saying that the video marketplace has changed dramatically since the FCC last updated these rules," he said.

Overall, the topic is rather technical and wonky, but it could ultimately affect the channels that show up on your TV and how much you pay for cable.

Among the issues Wheeler pledged to tackle is something known as re-transmission consent, or how much cable and satellite companies pay to carry broadcast networks. The average consumer is likely familiar with this issue because fights over re-transmission consent have led to TV blackouts over the years - most recently when CBS was pulled from Time Warner Cable in December.

According to Wheeler, these agreements are supposed to be worked out on a one-on-one basis: one broadcaster negotiates with one cable company. Instead, broadcasters have been teaming up to negotiate deals all together, even though they are rivals.

"This tends to put upward pressure on cable prices," Wheeler said. "Joint negotiations have been documented to increase prices to cable systems."

"At least some of those costs ultimately are borne by the consumer in the form of higher cable or Direct Broadcast Satellite (DBS) fees," the chairman said. "Witness the fact that some operators have begun adding 'below the line' retransmission fees to consumer bills."

As a result, Wheeler proposed that the FCC ban two or more of the big four local broadcasters from joining forces in re-transmission consent negotiations. "This action will return retransmission consent to one-on-one negotiations as intended by Congress, rather than many against one  with potential consequences for the consumer as one who ultimately pays the price," Wheeler said.

Not surprisingly, the broadcasters were not pleased.

"Broadcast companies across America have demonstrated that sharing arrangements lead to more local news and provide robust competition to giant pay TV providers," Gordon Smith, CEO of the National Association of Broadcasters (NAB), said in a statement. "The real loser will be local TV viewers, because this proposal will kill jobs, chill investment in broadcasting and reduce meaningful minority programming and ownership opportunities."

"Coincidentally, two industries would benefit from today's proposal: Big Cable companies who want less competition for advertising in local markets, and wireless companies who support punitive FCC actions that drive more TV stations into spectrum auctions," Smith said.

The cable industry, meanwhile, is all for it. "We are pleased that Chairman Wheeler intends to circulate an order that would rein in the anticompetitive practice which currently allows separately owned broadcast stations to jointly negotiate for retransmission consent payments," the National Cable and Telecommunications Association (NCTA) said in a statement. "As Chairman Wheeler stated, this type of coordinated behavior has resulted in increased prices which are ultimately borne by consumers. We urge the Commission to move forward in adopting the Chairman's proposal."

Wheeler's proposal, meanwhile, also addressed ownership of TV stations. In small- and medium-sized local markets, FCC rules have long restricted owners to a single TV station, he said. But stations are getting around that by via joint sales agreements (JSAs) - where "one station sells advertising time for another station in the same market," he said.

Ultimately, this "means these larger stations selling the advertising are the de facto owners of smaller stations," he said. As a result, Wheeler proposed applying rules currently used in the radio market to TV. Specifically, "where 15 percent or more of a station's advertising sales are generated by another station, that party is considered to have effective control," he said.

At this point, Wheeler's proposal is just that; the full commission would need to vote on it for it to become official. "I look forward to working with my colleagues to advance the public interest," Wheeler concluded.

Further Reading

Home Entertainment Reviews