New FCC Report Shows Retrans Costs Small Cable Systems 30% More Than Large Cable Systems
For Immediate Release
Contact: Ted Hearn
PITTSBURGH, June 3, 2019 – In written testimony submitted to a House Subcommittee, ACA Connects Vice Chairman Patricia Jo Boyers of Poplar Bluff, Missouri – where she owns a small, rural cable company with her husband – told lawmakers that the 1992 retransmission consent law is lining the pockets of TV stations while inflicting serious financial harm on small cable system subscribers. She said the law needs to be fixed fast before the wreckage seen during the past five years continues into the future, perhaps causing more cable companies to exit the traditional video business.
In her testimony, Mrs. Boyers voiced the frustration felt by 700 ACA Connects members who view retransmission consent as an archaic law that gives TV station owners excessive power in contract negotiations – leverage which the stations use to extract excessive fees that ACA Connects members need to add to consumers’ bills to stay in business.
Citing a study by the Federal Communications Commission, Mrs. Boyers said small video providers pay 30% more to TV stations than do large cable companies. Because smaller cable firms tend to have a rural profile, smaller cable providers’ higher retransmission consent payments are effectively subsidizing urban cable customers served by some of the largest cable operators in the country.
“If you were around the last time Congress considered satellite legislation,” said Mrs. Boyers, “you heard us talk about double-digit increases, blackouts, and forced carriage of junk channels. This still happens today. And it’s a far cry from what Congress expected when it created a special rule in reliance on NAB’s promises that prices wouldn’t go up and that any fees would stay with the local station. Recent changes in the marketplace, however, have made things far worse.”
Mrs. Boyers, who started her 3,000 subscriber company 27 years ago, became ACA Connects Vice Chairman in 2014. She is President and Vice Chairman of the Board of BOYCOM VISION. Mrs. Boyers and her husband Steve built their first system along the foothills of the Ozark Mountains using their own money. That meant taking out a second mortgage on their home and using the family cattle farm as collateral.
Congress made minor modifications to retransmission consent five years ago in the Satellite Television Extension and Localism Act Reauthorization Act of 2014 (STELAR), which is set to expire on Dec. 31, 2019. Tomorrow’s hearing before the Communications and Technology Subcommittee of the Committee on Energy and Commerce is expected to put a spotlight on retransmission consent and the need for further reforms as part of STELAR’s new five-year renewal.
Mrs. Boyers identified media consolidation as a major contributor to runaway retransmission consent costs. Broadcasters increasingly control multiple network affiliates within local markets, and broadcasters now control many more stations nationally. And broadcasters are acquiring regional sports networks to increase their overall leverage. Higher retransmission consent fees are causing small cable operators to shutter systems, raise consumer prices, and pull back from broadband deployment.
Although small cable operators have tried to employ market solutions, many large broadcasters choose not to deal with the National Cable Television Cooperative (NCTC), and that is not a violation of the good-faith rules. NCTC is a well-regarded buying group of small cable operators widely used by national cable programmers because of the cost efficiencies enjoyed by all parties to the negotiation.
In terms of legal changes, Mrs. Boyers gave her support for “Local Choice,” which would allow consumers to pick the stations to buy and watch, putting an end to blackouts. She also applauded Rep. Anna Eshoo’s (D-Calif.) Video CHOICE Act, and Rep. Steve Scalise’s (R-La.) Next Generation Television Marketplace Act.
“The important thing, however, is that Congress must take action to make things better for my customers and for millions of your constituents in rural areas throughout the country,” Mrs. Boyers said.
About the American Cable Association: Based in Pittsburgh, the American Cable Association is a trade organization representing more than 700 smaller and medium-sized, independent companies that provide broadband, phone and video services to nearly 8 million customers 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: https://www.americancable.org/