The gloves are definitely off, big time, in the battle between broadcasters and cable over the future of TV.
The rhetoric in the retransmission wars has been heating up on both sides, led by their respective stalking horses — the American Television Alliance for cable and TVFreedom for broadcasters — which trade barbs and slams: The ATA says broadcasters are extorting retrans windfalls that pummel subscribers and account for high prices, while TV Freedom says cable service is bad and prices are too high.
And broadcasters have not been feeling much love lately from the Federal Communications Commission, as chairman Tom Wheeler took aim at exclusivity rules, proposed prioritizing unlicensed spectrum over licensed broadcast spectrum, and tightened joint-sales agreement rules.
But the National Association of Broadcasters last week upped the ante, asking the commission to either deregulate broadcasting or put a moratorium on pay TV mergers, period, starting with the Charter-TWC deal.
The idea, said someone familiar with the NAB’s petition, was to “billboard the disparity” between multichannel video program distributor and broadcaster regulatory treatment when it came to ownership, rather than to read the FCC the riot act or necessarily block the deal.
If the FCC let broadcasters get bigger — by buying newspapers or owning more stations locally and nationally — the NAB would likely be OK with the deal since broadcasters would be in a better competitive position.
But the petition talked up the size of the deal and its impact on competition, and asked it to be put on hold. That would have been a harder stance for the NAB back when Comcast and NBCU were merging, given that it involved a major NAB member, but there is no similar yellow light in the merger of three cable/broadband players.
And NAB was ready to rumble last week. While broadcasters have their own mergers they have been asking the FCC to bless, they argue those are only attempts to try to achieve the economies of scale of their MVPD counterparts, attempts that will likely not succeed so long as the FCC continues to limit local ownership and cross-ownership opportunities.
They also argue that a combined Nexstar-Media General is minuscule compared to a Charter-Time Warner Cable-Bright House Networks combo.
In its petition to suspend the FCC’s vetting of the deal, the NAB did not confine itself to those parties alone, slamming what it signaled was open season for MVPD concentration while broadcasters continued to be under the thumb of FCC rules, which it called a disingenuous double standard.
One cable industry deal supporter who asked not to be identified wondered, given that broadcasters have their own mergers they want the FCC to approve, why the NAB seemed to be burning FCC bridges for little upside, particularly since the FCC was highly unlikely to act on what was, in essence, a billboard for the NAB’s disaffection with the agency’s regulatory policies.
A source familiar with the NAB’s thinking agreed that it was using the docket to make the point about disparate treatment more pointedly, but did not view it as aimed at the FCC specifically or even the Charter deal per se.
The source said the NAB saw the proceeding as a way to point out the “glaring” disparity in treatment and as more of a nudge to the FCC than a shot at it.
The shot was clearly at cable operators, which the NAB in the petition characterized as merging behemoths that dwarf broadcast groups and charge consumers “inexorably rising” prices.
But the petition also came at the FCC for its “asymmetric” approach to the respective markets, allowing multibillion dollar mergers on the MVPD side — AT&T-DirecTV, for example — while limiting the ad time one station can sell for another by making those joint-sales agreements an attributable ownership interest.
The NAB has sued the FCC over its move to limit JSAs, so the source said it would be odd not to comment on a big merger being vetted while the FCC continues to reign in broadcast ownership. The NAB is also trying to get the FCC not only to finish its overdue 2014 quadrennial review, but to do so by deregulating broadcasting.
Then there is the retransmission proceeding, which could wind up helping MVPDs if the FCC takes aim at retrans impasses.
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