Photo: Alastair Pike/AFP via Getty Images.
AT&T scored a victory in a bitter battle with TV station owners Friday when the Federal Communications Commission intervened to order the broadcasters to the negotiating table.
Why it matters: The FCC rarely weighs in on the rapidly multiplying disputes between pay-TV companies and broadcasters over the costs of carrying programming. Its move here could have repercussions for disputes beyond this one.
Driving the news: The FCC granted AT&T's complaint in an order, finding that the TV station owners refused to negotiate, caused an unreasonable delay in negotiations and failed to respond to AT&T's proposals in violation of the requirement that they negotiate retransmission consent in good faith.
- "This is the most egregious example of delay that we have encountered since the good faith rules were adopted," the order said.
- The FCC also noted that it could take enforcement action by proposing a fine, although it does not do so in the order.
Backstory: AT&T filed a complaint with the FCC in June against nine broadcast station owners alleging they refused to negotiate terms for the company to carry their channels.
- The feud led to a blackout in 20 cities when the station owners pulled their signals from DirecTV and U-verse homes (though AT&T has since reached agreement with three of the nine station owners).
- AT&T noted in its complaint that the stations are connected to Sinclair Broadcast Group through services agreements.
What they're saying: An AT&T spokesperson said the dispute shows that the process for negotiating terms is broken and in need of reform.
- "This was clearly one of the more egregious examples of how broadcasters routinely hold consumers hostage into paying higher and higher retrans fees, rather than being stewards of the public airwaves," the spokesperson said in an emailed statement.
Big picture: The disputes between broadcasters and cable and satellite operators come as Congress considers legislation renewing a law that allows for importing distant signals.
- The law has been viewed as a vehicle for broader changes to media regulations, but Senate Commerce Committee Chairman Roger Wicker recently introduced legislation to simply extend it for five years.
- That includes keeping the requirement that broadcasters and pay-TV companies negotiate in good faith.
- AT&T warned that if Congress fails to renew the law this year, "(T)hese broadcaster TV blackouts will increase in frequency, as the FCC will no longer be a backstop against such bad faith conduct from broadcasters. "