Scripps’ Lawlor Wants FCC To Review Streaming Rules

Jan 31, 2024

By Ted Hearn, Editor of Policyband

Washington, D.C., Jan. 31, 2024 – With the video marketplace in a state of flux, federal regulators need to review rules that determine how local TV stations gain carriage on streaming platforms like YouTube TV, Scripps Sports President Brian Lawlor said Wednesday.

Testifying on Capitol Hill before a House panel, Lawlor called on the Federal Communications Commission to update the rules, which many TV station owners consider outdated and a source of friction with the Big Four networks.

“More than 20% of Scripps households now receive our stations through cable-replacement services known as [virtual multichannel video programming distributors] (vMVPDs). As we expect that this trend will continue to expand, we strongly support the FCC refreshing its vMVPD record, just as this committee is examining the streaming marketplace and its impact on broadcast localism,” Lawlor told the House Subcommittee on Communications and Technology.

The subcommittee took testimony for about three hours to examine recent trends in sports media rights. The hearing was announced 11 days after Comcast’s Peacock streaming service aired the NFL Wild Card game between the Miami Dolphins and the Kansas City Chiefs on a first-ever exclusive basis except in Miami and Kansas City, where the games were broadcast live.

DirecTV Chief Content Officer Rob Thun in his testimony pushed back on bringing streaming services within the negotiating framework known as retransmission consent.

“Frankly, I think we have problems as it is with retransmission consent, so I wouldn’t want to take a broken model and apply it to a brand-new business because I think it would be damaging,” he said.

DirecTV, with 11.8 million subscribers, settled a six-week retransmission consent blackout with TV station owner TEGNA on Jan. 13 a few hours ahead of the start of the NFL playoffs. DirecTV lost 64 stations in 51 markets starting on Nov. 30, 2023.

“We would love to try to figure out ways to make retransmission consent more balanced between the distributors and the broadcasters so we don’t have the fights we have. But, unfortunately, that’s not the state of play,” Thun said.

The other hearing witnesses were John Ourand, Sports Correspondent of Puck News, and John Bergmayer, Legal Director of Public Knowledge.

The issue of streaming carriage rights for local TV stations has been controversial. Typically, the ABC, NBC, CBS and Fox networks handle the negotiations with Google’s YouTube TV and Disney's Hulu + Live TV and divide the revenue with their affiliates.

The affiliates, led by National Association of Broadcasters, have asked the FCC to consider classifying streaming services that carry local TV stations as traditional cable companies. Doing so would require the streamers to negotiate retransmission consent with the stations directly, which could yield stations more revenue than they are receiving from the networks.

“Recent events, including logistical challenges and inaccessible live sports programming for millions of Americans, have proven just how drastically the landscape is changing and emphasized the need for the FCC to refresh its vMVPD record,” the Coalition for Local News said in statement after the hearing.

The coalition includes more than 600 local stations. Coalition member Scripps owns 61 local television stations in 41 markets.

The FCC has not acted, mainly because FCC Chair Jessica Rosenworcel has said she believes the FCC does not have legal authority to classify streaming services as traditional cable companies. Some Capitol Hill lawmakers want to decide the issue in a new law, while a group of Senators, led by Sen. Ben Ray Lujan (D-N.M.) are backing NAB’s position.

Lawlor said retransmission consent should not be altered beyond applying it to streamers. The Modern Television Act, introduced in the last Congress and co-sponsored by Rep. Steve Scalise (R-La.) and Rep. Anna Eshoo (D-Calif.), called for the repeal of retransmission consent.

Rep. Pat Ryan, a Democrat from New York’s Hudson Valley, has demanded an investigation by the U.S. General Accountability Office to study the connection, if any, between retransmission consent and TV sports blackouts.

“In this competitive landscape where some sports are increasingly more expensive and inaccessible to many – Congress should reject calls to undermine retransmission consent, which is essential for local broadcasters’ ability to invest in local sports and news,” Lawlor said.

The coalition’s statement made a similar point. “We echo … Lawlor’s testimony calling on Congress not to undermine retransmission consent, an essential piece of broadcasters’ ability to invest in local sports and news.”