Broadcasters’ Request Would Increase Their Retransmission Consent Leverage To Extract Higher Fees Or Impose More Harmful Blackouts On Consumers
PITTSBURGH, January 25, 2017 – The American Cable Association urged the Federal Communications Commission to reject calls from TV stations to reconsider the decision to keep its local TV ownership caps in place, noting that this action would give broadcasters even greater retransmission consent bargaining leverage to extract even higher fees from or inflict blackouts on consumers served by multichannel video programming distributors (MVPDs).
ACA, in comments filed with the FCC, strongly opposed TV station efforts to gain the right to own more than one top-four rated station in a market and the right to own two stations in any local market in the country, including markets with just a handful of stations. Under current FCC rules, an entity may own only one top-four station in a local market. The FCC’s “duopoly rule” permits ownership of two stations in a market if at least eight independently owned commercial and non-commercial television stations remain in the market post-transaction.
If successful, TV station owners will have succeeded in dismantling two bedrock media ownership restrictions that will trigger significant broadcast industry consolidation in every local market in the country. Such consolidation will force MVPDs to negotiate with powerful local TV station conglomerates bent on gouging consumers that opt to view broadcast programming offered by cable, IPTV, and satellite TV providers.
“In considering the broadcasters’ request, the FCC must take account of the fact that permitting ownership of more than one top-four rated station in a market, and duopoly ownership in every market, regardless of the number of local television ‘voices’ in the market, would exacerbate the harms to the public interest of an already broken marketplace for retransmission consent by reducing broadcast station competition for retransmission consent fees, and harming consumers and MVPDs through even higher prices and more harmful blackouts,” ACA President and CEO Matthew M. Polka said.
According to a recent report, over the past 10 years, retransmission consent fees have risen from $250 million to $7.7 billion annually. Fueling this money grab is the broadcasters’ relentless exploitation of favorable regulations that permit the wanton abuse of signal blackouts – especially before marquee sporting and entertainment events – to extract excessive compensation for “free TV” signals.
Consumers have suffered through a record number of blackouts, with nearly 300 blackouts over the last two years, and just weeks into 2017, already 75 blackouts have been reported.
ACA’s comments were formally directed at petitions for reconsideration filed by the National Association of Broadcasters and Nexstar Broadcasting. Noting that the petitions suffered serious legal failings, ACA said the broadcasters brought nothing new to the table and largely rehashed arguments from their previous filings that have been thoroughly considered and rejected by the FCC. Moreover, ACA said the broadcasters’ attempts to find material errors or omissions in the FCC’s reasoning do not support their requests for elimination or loosening of the FCC’s local television ownership restrictions.
“Broadcasters have benefited from their market power by extracting skyrocketing retransmission consent fees, which have seen 40% annual increases over the last three years. And there is no end in sight. SNL Kagan predicts that retransmission consent fees could nearly double in the next five years, to $11.6 billion,” Polka said.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing nearly 750 smaller and medium-sized, independent cable companies who provide broadband services for nearly 7 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, visithttps://acaconnects.org/