Negotiations between TV channels/networks and pay TV operators are a breed of their own. The stakes are high, and the consequence of failure – a “dark” screen – is all too public.

But the critical factor that distinguishes these negotiations is the size regulation negotiations under three main categories of rules.

On August 26, 2016, the FCC Media Bureau governed that broadcasters are limited to the first bucket above, the Must Carry/Retransmission Consent rules. (In connection with Liberman Broadcasting, Inc. v. Comcast Corp., MB Docket No. 16-121 (August 26, 2016). This is significant because it comes in the midst of an ongoing debate over the rules of consent to retransmit and the FCC’s “totality of circumstances” test. In general, one party to a retransmission consent negotiation may seek to demonstrate, based on the “total of the circumstances” of a particular retransmission consent negotiation, that the other party has breached its duty to negotiate in good faith. Under the Media Bureau’s ruling, broadcasters can rely solely on rebroadcast consent rules to govern their carry negotiations.

The ruling stems from a complaint filed by Liberman Broadcasting, Inc. (Estrella TV). Estrella TV is a Spanish-language network with broadcast branches in Houston, Denver, Salt Lake City and elsewhere. Liberman said that, after Estrella TV moved from uncompensated “Must Carry” status to negotiable “Consent to Retransmission” status, the cable operator refused to bring the network to terms comparable to those for networks in Spanish-speaking affiliates of the operator. Instead of invoking rebroadcast consent rules, however, Liberman said the operator’s actions violated carrier program rules and parts of an FCC order prohibiting discrimination based on affiliation.

After a relatively lengthy briefing by both sides, the Media Bureau denied Liberman’s petition. The Media Bureau ruled that the Program Carriage Rules and related parts of the FCC order apply only to “video program providers” and that broadcasters, such as Liberman, are not “video program providers” when authorizing rebroadcasts of their transmission over the air signals. According to the Media Bureau, Congress created two, mutually exclusive regimes for pay-TV carriage contracts: the Must Carry/Retransmission Consent rules for broadcast signals and the Program Carriage/Program Access. He rejected Liberman’s argument that he satisfied the simple meaning of “video program seller” when Liberman tried to negotiate the paid retransmission of Estrella TV, even though Liberman himself produces about 75 percent of the programming. The Bureau found that Liberman was licensing its signal, not the programming itself.

The ruling preserves the status quo in which broadcast negotiation disputes fall within the domain of the FCC’s retransmission consent rules and the “total of circumstances” test.