PITTSBURGH, June 14, 2013 - American Cable Association President and CEO Matthew M. Polka issued the following statement regarding Gannett Co.'s $2.2 billion TV station acquisition of Belo Corp.:
"The Gannett-Belo deal -- yet another example of the massive consolidation now happening in the TV station market -- will create a giant broadcasting unit with even greater ability to leverage outdated federal rules to bilk pay-TV providers and their customers through unseemly business practices, such as wide-scale signal blackouts just before NFL games, the World Series, the Oscars, and other marquee events.
"Gannett and Belo have admitted that they will structure their deal in part by relying on so-called "virtual duopolies" to skirt Federal Communications Commission rules that outright prohibit the ownership of more than one of the top-four rated stations in the same local market. This clear evasion of FCC rules is something ACA has identified in deals this year involving Nexstar Broadcasting Group, Inc. and Sinclair Broadcasting Group, Inc.
"Gannett and Belo said the deal will establish Gannett as the fourth-largest owner of major network affiliates, reaching nearly a third of all U.S. households. The deal will nearly double Gannett's current broadcast station portfolio, from 23 to 43 stations, and it will result in a virtual duopoly between two top four rated stations in St. Louis, according to published reports.
"ACA has shown that when there is a virtual duopoly, the broadcasters often coordinate their retransmission consent negotiations and engage in other practices that reduce competition. Despite the fact that available evidence shows that coordinating retransmission consent negotiations leads to higher retrans prices passed along to consumers, the FCC continues to permit broadcasters to collude in this manner.
"ACA believes it is time for the FCC to prohibit the coordination of retransmission consent in the pending media ownership review -- or else it will truly be "Look out, Belo" for those consumers soon to be victimized by Gannett's virtual duopoly."
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing about 850 smaller and medium-sized, independent cable companies who provide broadband services for more than 7 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit http://www.americancable.org/
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