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ACA Lauds FCC's Review Of Broadcasters' Coordinated Retrans Negotiations

The American Cable Association commended the Federal Communications Commission for its Dec. 22 decision to examine coordinated retransmission consent bargaining practices by separately owned TV stations serving the same market, an issue ACA has been highlighting for a long time.

"ACA is very pleased that the FCC has sought comment on the impact of separately owned, same-market broadcasters who coordinate their action in the retransmission consent market.  In comments filed with the FCC, ACA has shown that coordinated negotiation of retransmission consent harms local competition and artificially increases retransmission consent fees, which consumers absorb in the form of higher rates," ACA President and CEO Matthew M. Polka said. "ACA commends the FCC for taking this important next step in the process, which we hope will lead to an outright prohibition of a practice that harms competition and consumers."

The decision on coordinated retransmission consent bargaining practices came in connection with the FCC's legally mandated quadrennial review of its media ownership rules, including the extent to which companies may own newspapers, television and radio stations in the same local market. The FCC is seeking public comment on proposed changes to its rules. ACA plans to participate by filing comments at the appropriate time.

ACA is encouraged by the FCC's decision to seek comment on coordinated retransmission consent between separately owned, same market broadcasters because TV station owners have been creating alliances and consolidating operations through legally binding agreements and through informal arrangements in order to gain insurmountable bargaining leverage over independent cable operators in broadcast carriage negotiations.  Although broadcasters' conduct has caused cable bills to go up, it has not led to an increase in the quality of local programming, especially news.

Broadcasters, however, continue to defend the practice, and urge the FCC to allow coordinated retransmission consent negotiation to continue unchecked.

"It is unfathomable that TV stations would not only admit that separately owned broadcasters in the same market collude in establishing retransmission consent pricing terms for cable and satellite TV operators, but would defend the practice as harmless.  Under any circumstance, there is simply no justification, legal or otherwise, for allowing TV station owners to engage in price fixing under the guise of resource ‘sharing agreements' that permit evasion of broadcast ownership limits, violate retransmission consent good faith rules, and defy antitrust statutes," Polka said.

Polka's comments came in response to Dec. 21 letter filed with the FCC by an entity called the Coalition of Smaller Market Television Stations.

Polka added that coordinated retransmission consent negotiations among separately owned broadcast stations in the same market lessen competition in local markets among broadcasters and lead to harmful hikes in retransmission consent fees that consumers eventually see in their cable and satellite TV bills. 

"In the interest of promoting competition and protecting consumers, the FCC needs to prohibit this practice before a grandfathering mentality sets in and exceptions become the rule," Polka said.

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