I feel a good deal of sympathy for FCC Chairman Julius Genachowski over the ongoing fight between Fox and Cablevision. My brother the educator likes to say that "responsibility without authority is trauma." Or, in other words, if you are responsible for something but don't actually have the authority to do anything about it, then the only thing you can do is suffer when things go wrong. So it is for Genachowski and Fox/Cablevision -- under the FCC's current rules. But here's the funny thing. The FCC actually has fairly strong statutory authority to take action. So while Genachowski is in a bind, he can actually fix the problem. He even has a vehicle all teed up and waiting in the form of our Petition to change the "retransmission consent" rules (I'll explain what those are below).
So how on Earth did the FCC get reduced from the consumer protection "cop on the beat" to pathetically tweeting the playoffs? The answer lies with over 15 years of deliberately learned helplessness and rulemaking that I can only charitably describe as auto-castration. Twice, in 1992 and 1999, Congress explicitly directed the FCC to make sure that broadcasters don't abuse the retransmission consent negotiation process -- the process Congress created that gives broadcasters the right to withhold their broadcast signal from subscription television providers unless they get paid off (or as we telecom policy wonks like to call it, "retrans"). Each time, the FCC went out of its way to develop rules that systemically divested itself of all capability to act.
Think I'm exaggerating? Consider this lovely gem from the FCC's Order implementing the 'Good Faith Negotiation' rule:
Although several commenters strongly favor the imposition of damages for adjudicated violations of Section 325(b)(3)(C), we can divine no statutory grant of authority to take such action. Congress instructed the Commission to revise its regulations governing retransmission consent to prohibit exclusive agreements and require good faith negotiation. We can divine no intent in Section 325(b)(3)(C) to impose damages for violations thereof. This is especially true where later in the same statutory provision, Congress expressly granted the District Courts of the United States the authority to impose statutory damages of up to $ 25,000 per violation, per day following a Commission determination of a retransmission consent violation by a satellite carrier. Commenters' reliance on the program access provisions as support for a damages remedy in this context is misplaced. The Commission's authority to impose damages for program access violations is based upon a statutory grant of authority. We note, however, that, as with all violations of the Communications Act or the Commission's rules, the Commission has the authority to impose forfeitures for violations of Section 325(b)(3)(C). 15 FCC Rcd 5445 (2000) Par. 82.
For those whose eyes glazed over during all the legalbabble (which is what lawyers use in place of technobabble), allow me to summarize:
"Because the specific statute (Sec. 325 (b)(3)(C)) does not explicitly give us authority, we decide we have no authority, even though our general authority to punish people for violating our rules would actually give us authority -- if we wanted to have it, which we don't." From this derives the oft repeated myth that the FCC "doesn't have statutory authority to do anything about retrans," even though the FCC explicitly says at the end of the same paragraph "but we actually do have authority."
In other words, Congress gave the FCC the job of Consumer Protection Cop to keep broadcasters from abusing their power as trustees of the public airwaves, and gave the FCC the power to do the job. Unfortunately, the FCC really wanted the job of "Palace Eunuch" for the Media Barons. So the FCC busily went to work lopping off everything that stood between it and its desired job as Palace Eunuch. For 15 years, the FCC has loooooovvvved its job as Palace Eunuch for the Media Barons, wearing a very impressive Palace Eunuch uniform with those great big baggy pants and the cute little fez and toy sword it waves impressively when it tells members of the public to move along and stop trying to hold big media companies accountable for their public interest obligations. And as a reward, Palace Eunuch FCC got to go every year to the Big Media Baron Convention in Las Vegas to get praised and petted -- which the FCC would reward by relaxing ownership rules further, rolling over on mergers, and rubber-stamping license renewals.
Unfortunately, all this indulgence of the Media Barons has created toxic levels of consolidation that, among other problems, has left the retrans system totally broken. Palace Eunuch FCC finds itself utterly unable to deal with these nasty brawls that keep breaking out. Worse, everyone keeps looking at it like it is supposed to be Consumer Cop FCC -- the job Congress actually intended. Unfortunately for Genachowski, much as he wants to be Consumer Cop FCC, thanks to previous FCC decisions, his existing arsenal consists of a little toy sword, a fez, and really baggy Palace Eunuch pants.
Happily for Genachowski, he can trade in the silly, baggy Eunuch pants for those bold, powerful "man pants" Delaware Republican Senate Candidate Christine O'Donnell touted as the accessory for the season. Some months back, my employer Public Knowledge and the New America Foundation, backed by a bunch of cable companies and other subscription television providers (Rule 1: when you take on the Media Barons, always bring a posse), filed a Petition with the FCC asking the FCC to review its retrans rules. We asked the FCC to modify the rules to reflect the current marketplace realities and give the FCC tools to protect consumers when the retrans fights rage out of control -- like the are now with Fox/Cablevision (and may tomorrow with Fox/DISH).
How would taking up the Retrans Petition help the current Fox/Cablevision fight? First, I have no doubt that if Genachowski even suggests that maybe the FCC will take up the issue at the November or December FCC meeting, it will inspire Fox to become a heck of a lot more reasonable in its negotiations. In the longer term, taking up our Petition to update the retrans rules is in keeping with Genachowski's commitment to put consumers first and get the FCC back on track as a Consumer Protection Cop. And it is absolutely necessary -- because the problems that cause the current crop of retrans fights are only going to get worse, not better.
So my advice to Genachowski, if he is serious about wanting to get Fox television channels back on Cablevision and about protecting television viewers generally, is that he seize this opportunity and move on our Retrans Petition. Even if the FCC doesn't adopt a rule, it will begin a very necessary discussion about how to adapt a system developed in 1993 to the realities of 2010. Or Genachowski could do nothing. In which case, he will have time to go shopping for a nice pair of those little pointy shoes with the bells on the toes to go with the baggy Eunuch pants.