ACA: FCC Needs Cost-Benefit Analysis of 39% Cap

The American Cable Association has told the FCC that whether or not to raise the 39% cap on a station group owner's national audience reach comes down to a simple calculus: Does the inevitable cost increase to MVPD subs outweigh the benefits of raising the cap. ACA's answer is a definite "no."

That came in comments (opens in new tab) on the FCC's inquiry into whether it should raise, lower or retain that cap.

ACA said that the FCC's cost-benefit analysis should be akin to an econometric analysis submitted by DISH regarding the proposed Sinclair-Tribune merger. It says broadcasters have the data and the FCC should make them produce it and the FCC's New Office of Economics and Analysis review it before the commission takes any action the cap.

Raising the cap could allow Sinclair to own more Tribune stations, something ACA and Dish don't want to see happen because it will boost their retrans muscle, as would raising the cap, it argues, with consumers paying the price.

Related: Newsmax: Raising 39% Cap Would Lower Boom on Local News

"Simply put, the more of an MVPD’s subscribers a broadcaster can reach, the more leverage it has in negotiations with that MVPD—and the more leverage a broadcaster has, the more harm it can do to the MVPD and its subscribers," said ACA. "A broadcaster with leverage can raise prices for MVPDs. MVPDs, in turn, pass along at least some of those increases to their subscribers."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.