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ACA: FCC Should Study the Impact of Broadcasters’ Collusion On Local Competition


The American Cable Association is calling on the Federal Communications Commission to widen the scope of the 2010 quadrennial media ownership review by examining whether the pooling of retransmission consent rights by local TV stations has produced a range of harmful negative effects, such as a reduction in the quality and quantity of local programming in markets across the country.

"ACA believes the ability of one TV station to arrange cable carriage for another TV station within the same local market reduces competition among local TV stations and erodes the quality and quantity of the programming offered by these stations," ACA President and CEO Matthew M. Polka said.

In its July 12 filing, ACA told the Commission it must evaluate the effects of local station consolidation on negotiations for retransmission consent when considering whether to retain, modify or eliminate its local television station ownership limits.

ACA had demonstrated in the past that the competitive character of nearly 40% of the country's 210 local TV station markets has changed in a manner quite harmful to consumers and their pay-TV providers.

In some cases, TV station owners have elected to combine, creating formal duopolies; in other instances, they've decided to enter less regulated sharing agreements, such as Local Marketing Agreements (LMAs) or Shared Service Agreements (SSAs), which allow stations to aggregate their tangible assets and management teams to become quasi-duopolies by stealth and avoid a head-on collision with the FCC's TV station ownership rules.

"In understanding the impact of these arrangements, an important place to begin is with a thorough review of all markets where TV stations have resisted competition and instead opted to create duopolies or entered into sharing agreements," Polka added.

Also in its July 12 filing, ACA urged the Commission to refrain from further relaxation of its local television station ownership limits, particularly among the top four rated stations in markets with at least eight independently owned and operating stations, and to consider tightening the showing required to grant a waiver of these rules. Most importantly,ACA told the Commission it should consider prohibiting the transfer of retransmission consent rights through sharing arrangements and other means so as to preclude joint negotiation of retransmission consent rights.

ACA is also greatly concerned that by jointly negotiating retransmission consent, TV stations have deliberately attempted to increase their bargaining leverage over cable and satellite operators and force them to pay far more than fair prices for retransmission consent - costs that are ultimately borne by consumers.

In a filing with the FCC on July 7, ACA specifically requested that the FCC determine:

  • The present number of instances, and historical trends, of broadcasters negotiating retransmission consent on behalf of another station in the same Designated Market Area (DMA), including the number of instances involving two or more Big 4 broadcast networks;
  • The prevalence of joint retransmission consent negotiating arrangements through SSAs or LMAs; duopolies; and multicast duopolies (i.e., one station broadcasts one Big 4 network on its primary video stream and another Big 4 network on its multicast stream);
  • The impact of joint negotiations for retransmission consent among broadcasters in a single DMA on the quality and quantity of local programming offered in the market, including an analysis of the local programming offered by broadcasters both before and after entering into such arrangements; and
  • The impact of broadcasters negotiating retransmission consent on behalf of another station in the same DMA on the prices charged to multichannel video programming distributors (MVPDs) for retransmission consent rights.

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