FCC OKs Rules for Deals on Retransmission

The Federal Communications Commission approved rules to help satellite and cable television companies reach agreements with TV stations to carry their signals.

The law requires that broadcasters enter into “good faith” negotiations with satellite and TV companies, and the FCC rules spell out appropriate action by the broadcasters.

The rules are especially important for satellite TV companies such as EchoStar Communications Corp. and DirecTV that face a May 29 deadline to reach retransmission agreements with broadcasters, or be forced to remove the signals from their systems. New laws passed in November to spur competition with cable operators gave satellite companies six months to reach agreements with local TV stations for carrying their signals.

EchoStar, which serves 3.6 million customers, has reached an agreement only with Fox’s 22 station signals. Hughes Electronics Corp.’s DirecTV, which serves more than 8.2 million customers, has contracts with Walt Disney Co.’s ABC, General Electric Co.’s NBC and News Corp.’s Fox to air their local stations. Under the ABC agreement, DirecTV will also carry Disney’s new 24-hour SoapNet cable channel.

In a letter to the FCC, EchoStar charged that a “major broadcasting group” is trying link an agreement on carrying its broadcast stations to higher fees, amounting to $500 million for related cable channels. Typically, the major networks have forced cable operators to carry sister cable channels, from MSNBC to SoapNet, as a condition for retransmitting their broadcast signals.

Battles have broken out this year as these retransmission consent agreements between broadcasters and cable operators have come up for renewal--with Fox pulling its signals when Cox Communications refused to expand carriage of cable channels and Time Warner and ABC currently engaged in a similar battle.

The FCC’s new rules list seven criteria for determining whether a broadcaster is negotiating in good faith. Broadcasters can’t refuse to negotiate with a satellite or cable company and can’t delay negotiations, the FCC said. If a cable or satellite company makes an offer, the broadcaster must provide concrete reasons for rejection.

Cable and satellite companies can complain to the FCC and agency staff will quickly resolve those complaints.