Broadcasters: Channel, Network Bundling Is Pro-Competitive

Representatives of ABC, CBS and Fox met with FCC officials last week to push back on a cable operator argument that bundling TV stations with co-owned networks is unfair and a threat to program diversity.

In a series of meetings with commissioner staffers related to the FCC's current notice of inquiry on access to video distribution platforms and its ongoing review of the retransmission consent good faith negotiating standard, the execs said that as a matter of "competition law and marketplace reality," the FCC should reject that argument, which it called counterintuitive.

Cable ops want the FCC to deem bundling a de facto violation of good faith bargaining.

The broadcasters say bundling of channels and networks in such negotiations are instead pro-competitive and pro-consumer because it reduces transaction costs and allows for new and innovative services.

They pointed out that antitrust doctrine presumes bundling to be pro-competitive, as has the FCC in retrans.

By contrast, they argue that the other side has shown no empirical evidence that bundling causes harm to consumers or video competitors.

Broadcasters have been arguing that no changes to the good faith standard are warranted as part of the congressionally mandated review of the standard.

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.