From Northern Virginia through the Garden State and across the Delaware Valley, Verizon FiOs is a major provider of cable television services. As such, it has shared its thoughts with the FCC regarding a plan that would provide rebates to customers in the event local television stations are blocked, by law, from viewing due to the lack of a retransmission consent agreement.
In short, the MVPD says the Commission is overstepping its authority in requiring consumer payouts should a “blackout” transpire.
With the assistance of attorneys Evan Leo and Brenna Darling of Kellogg, Hansen, Todd, Figel & Frederick, Verizon counsel believes the Commission’s proposal to require video providers to issue customer rebates during a retransmission consent impasse “is neither legally authorized nor will it achieve the Commission’s goal of protecting consumers.”
In fact, Verizon believes that requiring rebates for channels that become temporarily unavailable “is tantamount to rate regulation, which is prohibited.”
Verizon, which made its statement in reply comments associated with MB Docket 24-40 on April 8, believes requiring such rebates cannot reasonably be considered within the Commission’s jurisdiction to establish certain “customer service standards.” And, Verizon ads, “Not a single commenter defends the Commission’s attempt to drastically increase the scope of its statutory authority.”
There’s more: Verizon believes the Commission’s proposal “is also bad policy that will harm consumers.” How so? “The record confirms that a mandatory rebate policy will embolden broadcasters and other programmers to demand increasingly higher retransmission fees,” Verizon claims. “The steep rise in programming fees in recent years demonstrates that programmers already wield significant leverage in carriage negotiations, and the Commission should not place its thumb on the scale to further advantage the side that has
dramatically increased prices.”
Acknowledging the “cord cutting” seen among MVPDs, Verizon then states that video providers — not programmers — “are the parties with the incentive to avoid blackouts and
keep consumer prices down, and video providers already respond to consumer needs during blackouts and offer credits in certain circumstances.”
Broadcast TV station owners will most certainly contest that statement.
What should the Commission do? Verizon says it is best to continue to allow providers “to take nuanced approaches to blackouts, developed through years of experience, which account for consumer and market demands.”
Lastly, while Verizon agrees with the Commission that blackouts caused by failed
carriage negotiations are an increasing problem, mandatory rebates will only exacerbate it. “If the Commission wants to reduce blackouts,” Verizon concludes, “it should reform its rules governing retransmission consent negotiations.”
As such, Verizon supports Dish proposals offered to the Commission, which would require programmers to make stand-alone offers without bundling additional programming, allow video providers to provide subscribers out-of-market programming in the case of a blackout, and allow providers to offer television channels to consumers on an à la carte basis.
