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NAB: Consolidated Cable Needs No FCC Retrans Aid

The National Association of Broadcasters hammered MVPDs as a consolidated industry that has unprecedented market power and "significant leverage" over broadcasters in retrans negotiations.

That came in comments at the FCC on its review of the "totality of circumstances" test for determining whether those negotiations are conducted in good faith.

NAB said the FCC's proposed rulemaking would change the regime in favor of MVPDs while "virtually ignoring" the new video world order, dominated by 10 MVPDs that collectively "control" 94% of subs, with the top four controlling 79%.

NAB said any leverage broadcasters do have is not from market power, but from investing in quality content that consumers want.

The FCC's rulemaking proposal hinges on the conclusion that pay TV operators are no longer monopolists, says NAB, but the fact that there is now a "modicum" of competition has only allowed retrans to become relevant, it said, now that cable operators can't simply refuse to pay anything to broadcasters in return for reselling their signals.

"Put simply, the retransmission consent market has finally begun to work. It is therefore no surprise that pay TV companies have embarked upon a coordinated campaign before Congress and at the FCC to dismantle broadcasters’ retransmission consent rights."

NAB said most of the FCC's proposals have "little or nothing" to do with good faith bargaining, but are instead meant to tie broadcasters hands.

The FCC voted in September.

The item basically asks lots of questions rather than coming to any tentative conclusions about what should be included in totality of circumstances or be made per se violations, but the questions it asks dovetail with MVPD complaints/questions, including whether an MVPD demanding online distribution rights or a broadcaster denying them falls under the totality of circumstances test, whether bundling TV stations with affiliated programming or third party negotiations are bad faith, and a raft of other issues, mostly raised by cable and satellite operators seeking retrans reforms.

MVPDs in the American Television Alliance (ATVA) want the FCC to prevent broadcasters from restricting online access to their content during impasses, but NAB says that violates their legal rights as well as the copyright owners. "Usurping broadcasters’ rights by mandating the public performance of copyrighted material also could impact the ability of broadcasters to secure the necessary programming rights from content creators to stream broadcast signals over the Internet," NAB said.

"NAB understands why MVPDs yearn for the bygone days of old. Any business would prefer to be a monopolist and exercise control over its suppliers and customers," the trade group said. "The irony here is that MVPDs, of all companies, are the ones rushing to the government for help. Let that sink in for a moment. Multi-billion-dollar corporations that consistently plead with government to stay out of industry’s way, and that even oppose governmental efforts to promote competition, now urge the Commission to regulate their own competition into submission."

NAB said if the FCC really wanted to help consumers, consumers it says have been disadvantaged by MVPDs, it should update customer service standards. Key broadcaster criticisms of MVPDs include cable pricing, consolidation, and customer service complaints. It also added that getting rid of outdated media ownership rules that limit their competitiveness would be a help as well.

In its comments, ATVA said broadcasters still had the retrans power and were abusing it to the detriment of consumers.

"Once again, the NAB is trying to change the subject and distract policymakers and consumers in order to protect their monopolies," said ATVA spokesperson Trent Duffy of the NAB filing. "The fact is that there are at least 3 MVPDs in every market – and in many instances four providers – unlike the broadcast affiliates which operate as monopolies and hide behind government protections. The 12 million Americans who got blacked out and browbeaten by broadcasters for more money don’t think it’s working."  

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.