ACA Survey Reinforces Real-life Fallout Of Contentious Retrans Negotiations
PITTSBURGH, February 16, 2017 – The American Cable Association surveyed its members to determine the financial impact that broadcaster-imposed “retransmission consent” fees will have, and the results are troubling for consumers and their cable companies.
Many small and medium-sized cable companies recently concluded negotiating with corporate broadcasters for the retransmission consent rights to transmit their “free” TV signals. During these negotiations, which are almost universally described as one-sided, corporate media conglomerates extracted outrageous fees from local cable providers. As one respondent put it, the negotiations lead to “…overall price increases [that] are based on nothing other than [broadcasters’] ability to hold us hostage.”
ACA members reported that they will be forced to pay corporate broadcasters an average of 88% more in “retrans” fees by 2020. Based on ACA’s calculations, members were paying $11.00 on average per subscriber per month in 2017, which will increase to an average of $19.00 per subscriber per month by 2020. Nearly a quarter of those surveyed will see a drastic jump of at least 100% in fee increases in the next three years, and in one case that jump is expected to be 302%. These numbers reinforce early signs from ACA members that this round of negotiations was as brutal as expected.
Retrans fees are the fastest growing part of customers’ cable bills. For example, in some cases, cable subscribers across the country could see up to $15.00 in retrans fees in their monthly cable bills by 2020.
“This is distressing,” said Matthew M. Polka, President and CEO of ACA. “Corporate broadcasters have become increasingly aggressive over the years in charging for retransmission consent, and it’s clear that they have no reservations taking escalating amounts of money from consumers to line their pockets.”
Cable companies expressed concerns about the impact of retrans matters on rising cable bills and the ability to keep customers long term. “The most troubling aspect in this round of retrans negotiations is the financial burden that our customers will be forced to bear to have the ability to view channels that are available free over-the-air,” offered one survey respondent. Another ACA member lamented: “…It is not sustainable long term with our customer base. We are expecting a lot of attrition this year.”
Retransmission consent is a federal law and regulation that were created in 1992 – more than 25 years ago – to give broadcasters the right to request either mandatory carriage by cable operators, called “must carry,” or negotiated terms of carriage, retransmission consent. However, the retransmission consent laws and regulations, which allow broadcasters to take advantage of other federally granted local monopoly rules, have never been changed to reflect the massive consolidation in the television network and broadcast group industry. As a result, corporate broadcasters today continue to use outdated rules that harm consumers through annual price increases and eliminate any competition.
Polka continued: “The corporate broadcasters are out of control. No other industry operates this way. No other sector would get away with such massive price increases in just three years. Why is this okay? Quite simply, it is not, and consumers should not have to pay the bill for something Washington should have changed years, if not decades, ago.”
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, visit http://www.americancable.org/