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ACA Takes Retransmission Consent Reform To FCC, Congress

The American Cable Association stepped up its retransmission consent reform advocacy by launching new initiatives before Congress and the Federal Communications Commission in the wake of troubling news that the Walt Disney Co. abruptly pulled its ABC broadcast signal from 3 million cable subscribers as they anxiously awaited the start of the evening's highly popular Academy Awards ceremony.

Joining a large and diverse coalition deeply troubled with broadcasters' egregiously unfair treatment of consumers, ACA called on the FCC to start a rulemaking that would protect pay-television subscribers and promote competition as well as stop broadcasters from employing several abusive practices, including the pulling of signals just prior to nationally important events in order to extract excessive compensation from multichannel video providers.

ACA, participating in largely the same coalition, sent a letter March 9 to Congress urging lawmakers to review retransmission consent laws adopted in 1992 as the first step in a process that will protect consumers from being taken hostage by media giants determined to exploit regulatory advantages for financial gain.

"It is time to consider how to restore balance to the unique retransmission consent process and take steps to protect consumers against either seeing access to broadcast signals priced out of their reach or having that access denied to them," the letter to the leaders of the House and Senate commerce committees said.

In March 11 testimony before the Senate Commerce Committee, FCC Chairman Julius Genachowski said the FCC had been examining retransmission consent problems since late December when millions of cable customers were threatened with the loss of major college football games if broadcasters carried through on their threats to yank their signals. Those disputes involved News Corp. and Time Warner Cable and Sinclair Broadcast Group and Mediacom Communications.

"This is an issue that should be looked at seriously," Genachowski said. "It's certainly something that we'll be looking into...The rules, he added, "may have lost pace with changes in the marketplace,"

As the FCC rulemaking develops, ACA will emphasize the need to rein in TV stations that want to distort competition by charging smaller cable operators much more per-subscriber for retransmission consent than they normally charge other, usually much larger providers competing in the same market.

"The suggested remedies in the petition raise some of the ideas the FCC should consider. As this process moves forward, ACA will also address the rampant price discrimination faced by smaller cable operators and their customers and the need for regulations to fix this problem as well. Once the FCC puts this petition out for public comment, ACA will add this issue to the list of problems with the current retransmission consent rules, particularly for smaller operators, and strongly advocate for the problems to be solved," ACA President and CEO Matthew M. Polka said.

Polka added, "As troubling as the problem is for subscribers of large operators, the problem is at least twice as worse for customers of smaller, independent operators who have no leverage whatsoever against the broadcasters' abusive tactics."

ACA's decision to yield to solutions crafted by the FCC reflects years of deep disappointment with the broadcasters' stubborn refusal to put the interest of consumers first and the outcome of commercial disputes second.

"ACA believes it is necessary for the FCC to intervene to protect consumers from a fractured retransmission consent process loaded down with regulatory advantages that broadcasters zealously exploit to enrich themselves and leave cable subscribers with higher monthly bills," Polka added.

The diverse group on the FCC petition is comprised of ACA, Bright House Networks, Cablevision, Charter Communications, DIRECTV, DISH Network, Insight Communications, Mediacom Communications, New America Foundation, Organization for the Promotion and Advancement of Small Telecommunications Companies (OPASTCO), Public Knowledge, Suddenlink Communications, Time Warner Cable, and Verizon.

The coalition filed the petition on March 9, just two days after Disney pulled its ABC signal in New York City area from 3 million Cablevision Systems Corp. just hours before the start of the Oscars ceremony. The signal was restored about 15 minutes into the ABC broadcast after pressure built on Disney to end its anti-consumer hardball tactics.

"Disney's decision to pull its ABC signal underscored ACA's long-standing policy position that the federal retransmission consent regime is a badly broken system that permits signal pulling and flagrant price discrimination against smaller cable companies that consumers should not be forced to tolerate," Polka said.

In the letter to congressional lawmakers, ACA and its coalition partners noted that Disney's actions became national news, prompting many political leaders to speak out in defense of consumers.

"During the impasse between ABC and Cablevision, over 70 state legislators and a number of Members of Congress raised concerns about the impact retransmission consent-related service disruptions and threats of such disruptions are having on consumers," the letter said. "We respectfully urge you and other Members of Congress to carefully examine the circumstances that have resulted in the current imbalance in retransmission consent negotiations."


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