FCC Cannot Ignore This Harm To Consumers When Reviewing Deal
For Immediate Release
Contact: Ted Hearn
PITTSBURGH, September 24, 2018 – Cable bills will surely rise as night follows day if Gray Television Inc. is allowed to acquire fellow TV station owner Raycom Media. The Federal Communications Commission cannot ignore this harm as part of its public-interest review of the proposed transaction.
In reply comments filed on Friday, the American Cable Association urged the FCC not to allow Gray to distract attention from the key issue in this proceeding: If Gray purchases Raycom, its scale and market power will cause retransmission consent fees paid by multichannel video programming distributors (MVPDs) to rise. MVPDs, in turn, will pass the fees along to subscribers because they cannot absorb the programming cost increases and remain in business.
“Owning more stations in more markets allows a broadcaster to withhold programming from more stations if negotiations fail. In such circumstances, all other things being equal, retransmission consent prices will rise,” ACA President and CEO Matthew M. Polka said. “ACA urges the FCC to ignore Gray’s distractions and keep its eye on the ball.”
ACA urged the FCC to reject two particular attempts at distraction. One is Gray’s contention it will retain every incentive to avoid imposing blackouts on MVPDs. Even if this dubious assertion were true, the mere fact that Gray could threaten blackouts involving more stations after the transaction would allow it to command higher prices. Another is Gray’s contention that retransmission consent issues are more appropriately dealt with in a rulemaking. This conveniently ignores that specific harms caused by this specific transaction.
ACA also noted Gray’s concession that the proposed transaction will not trigger after-acquired station clauses with regard to the nine TV stations it is planning to divest to comply with FCC local TV station ownership rules. ACA had previously expressed concern that Gray could structure its divestitures to trigger the operation of such clauses when doing so will lead to higher prices.
“ACA is pleased to see Gray concede that its divestiture would not result in Gray’s acquiring and/or controlling the stations necessary to trigger any after acquired station clauses in its contracts. To the extent the FCC allows the transaction, it should make clear that it is conditioning its approval of the transaction on that representation,” ACA’s Polka said.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing about 800 smaller and medium-sized, independent companies that provide broadband, phone and video services to nearly 8 million customers 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/