The FCC's unanimous vote to ban coordinated retrans negotiations among the top four TV stations in a market was treated with cheers by their satellite, cable and telecom video competitors who must negotiate those agreements.
The American Cable Association, arguably the point-association on the issue along with the American Television Alliance (ATVA) of which it is a main member, was ecstatic, and said as much.
“ACA salutes Federal Communications Commission chairman Tom Wheeler for leading the effort to put teeth into the regulations that require broadcasters to negotiate retransmission consent with cable and satellite TV providers in good faith. Adoption of today’s order extracts from a broadcaster’s bite one of several practices that most obviously harm consumers and competition. ACA members are ecstatic that the FCC is finally banning coordinated retransmission consent negotiation between two separately owned, top-rated stations in the same market.
“In the end, ACA really can’t say it any better than Chairman Wheeler did in his March 6 post on the FCC blog: ‘Joint Retransmission Negotiations: Consumers Lose When Broadcasters Band Together,’ noting that retransmission consent fees shot up 8,600% from 2005 to 2012."
DirecTV, also a member of ATVA, added its two hands clapping.
“The FCC’s decision today is a win for consumers," it said. "By restricting broadcasters' ability to collude in retransmission consent negotiations, the FCC took an important first step to protect consumers from local channel blackouts and higher prices. DIRECTV appreciates the FCC’s efforts and hopes to work together for additional reform in the near future.”
DirecTV and other ATVA members would, among other things, like to see the FCC step in to end blackouts and mandate arbitration in impasses.
Even the Independent Telephone and Telecommunications Alliance (representing mid-sized telecom carriers), not a familiar name in retrans react stories, felt compelled to weigh in to celebrate the move.
“ITTA applauds the FCC’s efforts to reform the outdated retransmission consent rules," said ITTA President Genny Morelli. "We have long argued that the FCC has the legal authority to adopt reforms that would restore balance to the retransmission consent marketplace and we are pleased to see the Commission move forward on these important issues.
Strengthening the good faith negotiation standard by prohibiting joint negotiations among separately-owned, top-4 broadcast stations within a market will help level the playing field between broadcasters and video programming distributors (VPDs) and lead to reduced costs for consumers.
Not surprisingly, NAB was sitting on its hands. It did not slam the FCC, but simply pointed out why the decision was unnecessary.
"It's important to note that broadcasters have engaged in thousands of successful retransmission consent negotiations with pay TV providers over the years. Never has a local TV station been found by the FCC to have negotiated in bad faith."
"We would also note that broadcasters are not responsible for higher pay TV bills. Pay TV companies have been raising rates more than twice the rate of inflation for the last 20 years, according to Consumer Reports. The notion that a punitive crackdown on local TV stations will lead to lower cable rates is simply not credible."
Wheeler has billed the coordinated retrans prohibition as a way to limit cable bills, arguing that joint retrans leads to above market fees that then get passed on to the consumer.
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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.
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