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ACA Cites Dramatic Rise in Broadcast’s Retrans Revenue

In the second quarter, broadcasters announced record-breaking retransmission consent revenue, which the American Cable Association Thursday claimed validates the concerns of small cable operators who have told Congress and federal regulators that the market is broken, causing consumer rates to increase.

In the second quarter, Sinclair Broadcasting reported a 27% increase in retransmission consent revenue to $18.7 million compared to the second quarter of 2007. Over the same period of time, Belo reported a 36% increase to $7.6 million; Hearst-Argyle Television a 26% increase to $6.8 million; and LIN TV a 97% increase to $6.7 million. Since 2005, broadcasters have increased revenues generated from retransmission consent by about 75%.

“The numbers are in, and once again cable customers lose as broadcasters squeeze every last penny out of operators—simply because outdated federal rules allow them to do so,” ACA president and CEO Matthew Polka said in a prepared statement. “With thousands of retransmission consent contracts set to expire in the coming months, we expect broadcasters to continue to exploit their government-enhanced market power, which will very likely raise prices for pay television customers across the country next year.”

The ACA charges that federal retransmission consent and network non-duplication rules give broadcasters unrestrained leverage to demand unfair rates, terms and conditions for retransmission consent, particularly from small and medium-sized operators. 

The ACA has filed comments with the Federal Communications Commission as part of its ongoing proposed rulemaking regarding revisions to the commission’s program access and retransmission consent rules, urging the commission to make moderate changes to existing rules and regulations.