Sunlight Needed To Expose Broadcasters’ Private Price-Fixing Schemes, Trade Group Says
PITTSBURGH, December 27, 2011 – The American Cable Association called on the Federal Communications Commission to impose transparency requirements to prevent television station owners that coordinate their retransmission consent negotiations from keeping their price-fixing schemes a secret from the public and regulators charged with enforcing station ownership limits, retransmission consent rules, and antitrust statutes.
ACA said the FCC should require broadcasters to place in their online public file any agreement, regardless of name or purported “efficiencies,” one station enters into with another separately owned TV station in the same market for ready inspection by the public, regulators and others.
“Requiring disclosure of all agreements between separately owned TV stations in the same market, particularly those that facilitate the coordination of retransmission consent negotiations, would serve the public interest by enabling regulatory and antitrust authorities to both monitor the competitive effects of such agreements and detect violations of FCC regulations and federal antitrust statutes,” ACA President and CEO Matthew M. Polka said.
The coordinated negotiation of retransmission consent among separately owned, same-market broadcasters implicates three important public policy concerns: media consolidation, the exercise of retransmission consent and antitrust compliance. In multiple filings, ACA has recommended that the FCC deem this practice to be in violation of the local television ownership limits and of broadcasters’ obligation to negotiate retransmission consent in good faith. Such coordinated retransmission consent negotiations reduce competition in local television markets and also result in higher costs to customers of pay-television providers. As ACA has documented in the past based on member surveys, the practice of coordinating retransmission consent negotiations between separately owned stations in the same market is widespread.
“Disclosure of all agreements between separately owned, same-market stations in broadcasters’ public inspection files is necessary because today the information needed to evaluate whether broadcasters are in compliance with current media ownership, retransmission consent, and antitrust rules is not otherwise readily available,” Polka said. “The public needs to know whether broadcasters are trying to eliminate competition in local markets through collusion and drive up the prices pay-television providers pay to deliver free, over-the-air television to their customers.”
In comments filed with the FCC on Dec. 22, ACA noted that a requirement to place all agreements between separately owned, same-market stations in broadcasters’ online public file would track with the rationale underlying prior FCC disclosure mandates. For example, FCC rules require the placement of Joint Sales and Time Brokerage Agreements (with confidential information redacted) in a broadcaster’s public inspection file to evaluate whether these agreements effectively undercut FCC ownership restrictions. The Department of Justice (DOJ) filed comments with the FCC asserting that same-market JSAs should be considered attributable for ownership purposes on the basis of their competitive similarity to common equity ownership. DOJ said these agreements should be made available for public inspection.
ACA stressed that DOJ’s concerns about the anti-competitive effects of JSAs directly relate to the independent cable community’s concerns about agreements between separately owned same-market broadcasters that facilitate the coordinated negotiation of retransmission consent. ACA believes that DOJ’s successful effort with the FCC to require public file disclosure of broadcaster JSAs provides support for ACA’s view that agreements among separately owned, same-market television broadcast stations that make possible coordinated broadcast carriage negotiations also should be placed in the broadcasters’ online public file.
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/