The American Cable Association is calling on the Federal Communications Commission to prevent the possibility of a massive TV signal blackout in the Topeka, Kansas, market very early next year by disallowing the local ABC affiliate from jointly negotiating retransmission consent with any other station in the market.
"Come the end of the year when carriage contracts are set to expire, several ACA members serving thousands of Topeka consumers could lose access to the ABC, NBC and FOX stations all at once, if the FCC permits these economically dominant stations to act as a triopoly in negotiating retransmission consent," ACA President and CEO Matthew M. Polka said. "With the loss of three Big Four stations an unacceptable business risk, ACA members would be forced to bow to the Topeka triopoly's `blackout or blackmail' strategy and would end up paying much higher fees for retransmission consent than if they had been able to negotiate with each station separately."
At issue is the sale of Topeka's ABC affiliate, KTKA, to PBC Broadcasting, a transaction that requires FCC approval and recognition that it would serve the public interest. In March, ACA asked the FCC either to deny the transaction or allow it to go through with the proviso that KTKA would be prohibited from teaming up with another Topeka station to negotiate retransmission consent with local pay-TV providers.
ACA is flagging this problematic transaction because Topeka's NBC and FOX affiliates are commonly owned by New Vision Television. New Vision has created virtual TV station duopolies with PBC in the Youngstown, Ohio, and Savannah, Georgia, markets. ACA is highly confident that following the sale of KTKA, PBC and New Vision have every intention of creating an unprecedented virtual triopoly to negotiate retransmission consent for three of the Topeka's Big Four stations.
ACA's confidence level only increased after PBC recently disclosed to the FCC that it already has a local marketing agreement (LMA) with KTKA's current owner, Free State Communications, and a shared services agreement with a New Vision company, suggesting that New Vision is already operating KTKA.
The loss of three Big Four stations in a flash would inflict severe economic harm on the 10 ACA members in the Topeka market, who combined provide service to about 30,000 Topeka households. Five small cable providers in Topeka filed declarations with the FCC in support of ACA's petition to deny or condition the KTKA sale. All five have a KTKA retransmission consent agreement that expires on Dec. 31, 2011, and all five would likely be the first ones to feel the sting of the newly fashioned PBC-New Vision triopoly.
"Who will pay the price for media consolidation run amok in Topeka? The cable consumer, of course," Polka said. "Three local TV stations regulated by the FCC and given free spectrum by the taxpayers should not be allowed to exercise monopoly power for the purpose of engaging in blatant price gouging of consumers."
ACA filed its original petition to deny or condition the KTKA sale on March 16. In a filing with the FCC on April 7, ACA said the agency should disregard PBC's argument that concerns with the KTKA sale must be set aside because the issue of joint negotiation of retransmission consent is already being considered in the FCC's retransmission consent rulemaking adopted 13 days before ACA filed its petition to deny or condition the KTKA sale.
ACA said PBC's argument is patently false in that the FCC imposed a program access condition on Comcast Corp.'s acquisition of Adelphia cable systems in 2006 while a parallel rulemaking was ongoing. ACA also pointed out that the FCC did a similar thing in 2008 to address the potential harm arising from the transfer of control of DIRECTV from News Corp. to Liberty Media.
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