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ACA Chairman Friedman Seeks End To Big Media Price Discrimination

American Cable Association Chairman Steve Friedman said that under his leadership, the trade group is firmly committed to preventing big media companies from using their market power to extract discriminatory content fees from the customers of small, independent cable providers.

"We have never said our members are not willing to pay a negotiated fair price in a fair marketplace, but we have always objected to our members' paying an unfair, discriminatory, non-cost-justified price to broadcasters, cable programmers or others, just because we're smaller," Friedman said. "It's time for this discrimination to stop."

If ACA is successful in communicating its goals to the public and government officials, Friedman added, consumers would be charged fairer prices and operators would have more capital to invest in broadband network upgrades that will improve Internet download speeds in rural markets where cost considerations run high as factors in making deployment decisions.

"ACA members deserve a fair, non-discriminatory price all of the time, every time, and that's what we are dedicating ourselves to achieving for every independent cable operator and for our customers, who ultimately bear the brunt of program pricing discrimination," Friedman said.

Friedman's comments came in an address to hundreds of ACA members gathered for the 5th Annual Independent Cable Show, an important business forum co-hosted and jointly organized by ACA and the National Cable Television Cooperative (NCTC), a Lenexa, Kansas-based group that purchases programming and equipment for U.S. cable operators. At today's annual ACA Members meeting, Friedman was re-elected to serve a new two-year term as ACA Chairman.

On specific challenges ahead, Friedman focused on the Comcast-NBC Universal transaction, saying "the biggest merger of our time" would force ACA members to pay much more for national cable networks, regional sports channels, and retransmission consent if regulators failed to impose meaningful conditions and remedies to address harms that will routinely cause disputes to flare up on a local, regional and national basis. Access to Comcast-NBCU online content is another important concern.

"When you put these two companies together, that's more clout than any one company deserves," Friedman said. "ACA has provided ample evidence in Washington, D.C., that whether it is cable programming, regional sports networks, retransmission consent or online programming, we as smaller companies and our customers will pay more for combined Comcast-NBCU programming, and their rates, terms and conditions will be even more discriminatory."

Elsewhere, Friedman said ACA has alerted Congress and the Federal Communications Commission about the effort by many local TV station owners to form "virtual duopolies" by entering into Local Marketing Agreements (LMAs) and Shared Services Agreements (SSAs), especially among the independently owned affiliates of the ABC, CBS, NBC and FOX broadcast networks.

These LMAs and SSAs among Big Four stations typically mean one station negotiates retransmission consent for both in a deliberate attempt to use their consolidation as leverage to force ACA members into overpaying for their signals. ACA members are also seeing retransmission consent fees rise sharply where Big Four stations have formally merged into duopolies.

"ACA members have reported that they are now paying to Big Four duopolies and virtual duopolies 30%, 133%, and 161% more than they are paying to separately owned or controlled broadcast affiliates for retransmission consent," Friedman said. "ACA has asked the FCC to investigate these retransmission consent abuses and to act in a rulemaking to reform retrans rules before there is further harm to consumers and broadcaster consolidation reaches a stage so advanced that it can't be reversed."

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