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ACA's Polka Praises FCC For Warning TV Stations On Legality Of Sharing Deals

In a Nov. 29 statement, American Cable Association President and CEO Matthew M. Polka praised the Federal Communications Commission for warning TV station owners that Shared Services Agreements (SSAs), which often create de facto mergers without obtaining necessary FCC consent, could run afoul of the agency's TV station ownership rules.

"ACA is encouraged that the FCC recognized that the practices of broadcasters pursuant to SSAs can be at odds with the purpose and intent of the media ownership rules," Polka said. "For quite some time, ACA has pointed out that TV station owners are consolidating their operations both through legally binding agreements, like SSAs, and through informal arrangements, to gain unrivaled bargaining leverage over independent cable operators in retransmission consent negotiations," Polka said.

He added, "SSAs cause cable bills to go up and the quality of local TV programming, especially news, to go down. While these practices and others may mean more market power for TV stations in negotiations for broadcast carriage and advertising, they also mean station layoffs and less competition, localism and diversity for consumers."

Polka's comments came in response to an FCC Media Bureau decision about complaints regarding the legality of Raycom Media's control of three Honolulu, Hawaii, TV stations pursuant to an SSA with MCG Capital signed in August, 2009. The FCC's duopoly rule permits common ownership of two TV stations in the same market if eight full-power independent television stations (commercial and noncommercial) will remain post-merger. However, the duopoly rule does not permit mergers among the top four-ranked stations in a single market. Raycom controls Honolulu's CBS and NBC stations.

"ACA is pleased the FCC will take into account the duopoly rule issues the Raycom arrangement raises, and also consider within the context of individual licensing proceedings whether coordinated practices are consistent with the public interest," Polka said.

ACA will be encouraging its members to take detailed notes about their dealings with the station owners in markets where separately owned broadcast stations coordinate their retransmission consent negotiations.  To the extent these practices are not sufficiently prohibited in either the FCC's retransmission consent rulemaking or the 2010 quadrennial review proceeding, ACA and its members will not hesitate to raise concerns about these deals when the stations seek FCC approval to renew their licenses. 

"Sooner or later, the broadcasters will be held accountable for their fleecing of the American consumer," Polka said.

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