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ACA to FCC: Probe Broadcasters' Marketing Agreements in Retransmission Consent Negotiations

The American Cable Association called on the Federal Communications Commission to open a proceeding to examine the use of local marketing agreements (LMAs) by broadcasters to attain even more bargaining power over small, independent cable operators in negotiations for signal carriage through retransmission consent.

For many years, broadcasters have used LMAs to enable one broadcaster to negotiate retransmission consent on behalf of two or more broadcasters within the same local market. These deals, which can be difficult to track, have occurred despite FCC duopoly rules that generally prohibit common ownership of two TV stations in the same local market to protect consumers and advertisers from anti-competitive conduct by broadcasters.

"ACA believes the FCC should now determine whether LMAs are skirting national policy intended to promote local broadcast competition," ACA President and CEO Matthew M. Polka said. "LMAs set the price for retransmission consent for one broadcaster and its direct horizontal competitor, leading to higher retransmission consent costs for consumers."

ACA's request for an LMA proceeding came in FCC comments filed Nov. 19 in support of Mediacom Communications Corp.'s retransmission consent complaint against Sinclair Broadcast Group, Inc.

In the proceeding, Mediacom has asked the FCC to prevent the broadcaster from withholding its signal from cable operators - an unfair, heavy-handed tactic that victimizes consumers - while the Commission considers the merits of good faith complaints.

"We hope the FCC takes this opportunity to fix a broken retransmission consent process that permits a broadcaster like Sinclair to pull its signals from cable systems while a retransmission consent grievance is being reviewed by the FCC, inflicting harm on consumers who expect uninterrupted access to local news, weather and time-sensitive information such as school closings, traffic delays and missing-child alerts," Polka said.

In its comments, ACA urged the FCC to permit cable operators to carry local broadcast signals while retransmission consent complaints are pending before the agency.

Maintenance of the status quo in such circumstances is necessary, ACA asserted, because ACA members (half of whom serve 1,000 subscribers or fewer) would suffer unacceptable subscriber loss to satellite TV providers that continued to provide all broadcast programming in the local market while the FCC was adjudicating a retransmission consent dispute.

Under the current complaint process regime, small cable operators who have been wronged have no viable option other than to accept broadcasters' proposed terms and conditions, however unreasonable, because they cannot afford to wait out the complaint process without carrying a broadcast affiliate.

"ACA has long advocated for retransmission consent reform because of the vulnerability of ACA members and their customers in retransmission consent negotiations due to a lack of market power," Polka said. "As the FCC noted when News Corp. took effective control of DirecTV, small and medium-sized cable operators are particularly vulnerable to the withdrawal of `must have' programming."

Links to Related News Stories

American Cable Association Supports Mediacom in Retrans Fight With Sinclair (Broadcasting & Cable, 11/19)
ACA Calls On FCC To Probe TV Duopolies (TV News Check, 11/19)
ACA takes aim at TV SSAs (RBR.com, 11/19)

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