Consumers Typically Pay Higher Retransmission Consent Fees While Receiving Diminished Local News Services Under Such Deals
PITTSBURGH, November 17, 2011 – The American Cable Association is blasting broadcasters’ new Shared Services Agreement (SSA) in Tucson, Ariz., that will allow Raycom Media to control the operations of three local stations, including top-rated CBS and Fox stations, even though Federal Communications Commission rules generally prohibit formal cross ownership among the four highest-rated stations in a market.
“With breathtaking disdain for the public interest, Raycom is seizing effective control of Tucson’s CBS and Fox affiliates just as the FCC is about to release a notice of proposed rulemaking asking to what extent such deals violate the ban on consolidation among the top four local stations,” ACA President and CEO Matthew M. Polka said. “As we’ve seen elsewhere, SSAs are strong indicators of bad news to come, including higher retransmission consent fees; higher advertising rates; less competition, localism and diversity; and job loss among news reporters and production employees.”
A published report said that under the Raycom-Belo SSA, all workers except sales staff will lose their jobs at Belo’s Fox station KMSB, while Raycom’s CBS affiliate KOLD will provide news to KMSB viewers going forward. Raycom expects to complete the transition within the next 120 days, with reports saying the SSA could threaten up to 20 news jobs in front of and behind the camera. (Click here to see video of KMSB anchor describing planned job cuts.) According to The Nielsen Co., Tucson is the 70th largest TV market with 442,000 TV households.
For years, ACA has highlighted how the long-broken retransmission consent regime has been made even worse by the proliferation of coordinated retransmission consent negotiations by separately owned broadcasters in the same market using legally binding arrangements, such as SSAs, and also through informal arrangements.
On Monday, ACA joined a letter to FCC Chairman Genachowski showing how local television stations that cannot lawfully merge under agency rules are nonetheless consolidating their core operations, staff and news production. The letter — co-signed by Free Press, Dish Network, Time Warner Cable and two newspaper and broadcast employee unions – noted that two stations affiliated with the Big Four networks that negotiate together have the market power to increase their pay-TV carriage fees by 21.6%, compared to situations where Big Four stations negotiate carriage separately.
“To protect consumers, the FCC should conclude that separately owned stations in the same market that coordinate their retransmission consent negotiations are not bargaining in good faith as required by law, and are violating the existing broadcast ownership limits. ACA has documented that coordinated bargaining is a prevalent practice and that at least 36 pairs of separately owned Big 4 affiliated stations in 33 different markets have engaged in coordinated negotiations through use of a single bargaining representative,” Polka said.
About the American Cable Association
Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 900 smaller and medium-sized, independent cable companies who provide broadband services for more than 7.6 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA’s members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit https://acaconnects.org/