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, 36798-36801 [2020-11130]

Download as PDF 36798 Federal Register / Vol. 85, No. 118 / Thursday, June 18, 2020 / Rules and Regulations websites, to the extent such websites are maintained, in order of priority: (1) The applicant station’s internet website; (2) The applicant’s internet website; or (3) The applicant’s parent entity’s internet website. (B) If the applicant does not maintain an internet website for the station or itself, or if the applicant’s parent entity does not maintain an internet website, the applicant shall post online notice on an internet website: (1) That is accessible to members of the public without registration or payment requirements, or any other requirement that the user provide information, or response to a survey or questionnaire in exchange for being able to access information on the website; and (2) That is locally targeted to the area served and/or to be served by the applicant station (e.g., local government internet website, local community bulletin board internet website, state broadcasters’ association internet website). (iii) Commencement of posting. The online notice shall be posted no earlier than the date of release of the Hearing Designation Order, Order to Show Cause, or other order designating issues for hearing, and no later than the fifth business day following release of said order. (iv) Length of posting. The online notice must be posted for a minimum of 30 consecutive days. (b) Within seven (7) days of the last day of broadcast of the notice required by paragraph (a)(1) of this section, the applicant shall file a an original statement and one copy with the Secretary of the Commission setting forth the dates and times on which the on-air announcements were made, the date the online notice was first posted, and the Universal Resource Locator (URL) address of the internet website on which online notice is posted. (c) The failure to comply with the provisions of this section is cause for dismissal of an application with prejudice. However, upon a finding that applicant has complied (or proposes to comply) with the provisions of section 311(a)(2) of the Communications Act, and that the public interest, convenience, and necessity will be served thereby, the presiding officer may authorize an applicant, upon a showing of special circumstances, to give notice in a manner other than that prescribed by this section; may accept notice that is given in a manner which does not conform strictly in all respects VerDate Sep<11>2014 16:26 Jun 17, 2020 Jkt 250001 with the provisions of this section; or may extend the time for giving notice. 418–0530 (voice), (202) 418–0432 (TTY). [FR Doc. 2020–11127 Filed 6–17–20; 8:45 am] Synopsis 1. In this Report and Order (Order), we revise § 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 § 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 § 76.65. BILLING CODE 6712–01–P 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 Federal Communications Commission. ACTION: Final rule. AGENCY: 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 Raelynn.Remy@fcc.gov, or (202) 418– 2936. SUMMARY: 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 fcc504@fcc.gov or calling the Commission’s Consumer and Governmental Affairs Bureau at (202) SUPPLEMENTARY INFORMATION: PO 00000 Frm 00084 Fmt 4700 Sfmt 4700 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. 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. E:\FR\FM\18JNR1.SGM 18JNR1 Federal Register / Vol. 85, No. 118 / Thursday, June 18, 2020 / Rules and Regulations 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: • 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 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. VerDate Sep<11>2014 16:26 Jun 17, 2020 Jkt 250001 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. II. Discussion 6. We adopt the unopposed revisions to section 76.65 of our rules proposed in the NPRM. First, we revise § 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 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). 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 PO 00000 Frm 00085 Fmt 4700 Sfmt 4700 36799 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. 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 § 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 § 76.65(b)(1)(viii) and (ix). Commenters uniformly support 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. E:\FR\FM\18JNR1.SGM 18JNR1 36800 Federal Register / Vol. 85, No. 118 / Thursday, June 18, 2020 / Rules and Regulations these revisions to § 76.65, and no party has opposed them.8 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 § 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 § 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 § 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 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. VerDate Sep<11>2014 16:26 Jun 17, 2020 Jkt 250001 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 PO 00000 Frm 00086 Fmt 4700 Sfmt 4700 • 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 E:\FR\FM\18JNR1.SGM 18JNR1 Federal Register / Vol. 85, No. 118 / Thursday, June 18, 2020 / Rules and Regulations 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 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. VerDate Sep<11>2014 16:26 Jun 17, 2020 Jkt 250001 2. Amend § 76.65 by revising paragraphs (b)(1)(viii) and (ix) and (b)(2) and adding paragraphs (b)(3) and (4) to read as follows: ■ § 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 § 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— PO 00000 Frm 00087 Fmt 4700 Sfmt 9990 36801 (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 E:\FR\FM\18JNR1.SGM 18JNR1

Agencies

FEDERAL COMMUNICATIONS COMMISSION

[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]


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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.

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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.
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    \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.
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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

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