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Telcos Dial Into the Call for Retrans Reform — Loudly

WASHINGTON — The Federal Communications Commission has asked pay TV industry players for comment on the state of video competition to help shape its next annual report to Congress.

“Testy” comes to mind after reviewing some of the responses from major players — notably telco video providers — who used the docket to sock it to the current retransmission-consent rules.

The heated debate over retrans reforms has a new battleground in the FCC’s just-opened and congressionally mandated review of what constitutes “good-faith” bargaining between television stations and the pay TV providers that carry them. But the video competition report hosted its own round of punches between multichannel video programming distributors (MVPDs) and broadcasters.

MVPDs — particularly telco video providers — were lining up to take aim at retransmisson consent.

In sync were telco AT&T and its new merger partner, satellite-TV firm DirecTV. They told the FCC that “exploding” retrans fees will inevitably mean higher prices, which will mean lower demand and reduced subscriber choice, an equation meant to trouble the FCC in its push for lower prices and more choice. They came armed with numbers — retrans fees rose 8,600% between 2005 and 2012, and there have been 450 blackouts in the past five years.

Telco Verizon Communications also hit on the price and blackout points and on fixing the broken retrans system.

The American Cable Association presented the FCC with some sobering figures to make its point that the state of the video competition marketplace is not so hot for its smaller, independent cable constitutents, who face big programming price tags.

In its comments on the FCC’s next video competition report to Congress, the ACA said that some 91 small cable systems shut down last year, according to figures from the National Cable Television Cooperative.

The good news is, that was down from the two previous years. The bad news is that all told, 353 systems have shuttered over that time, and 1,169 have closed since 2008.

ACA conceded there are more factors to those shutdowns than programming costs, but said increases in the price of content — including the price of bundled channels in retrans deals — remain one of the primary culprits. It wants the FCC to make that point in its report to Congress.

The National Association of Broadcasters warned the FCC against “bending retransmission-consent rules in pay TV providers’ favor,” but MVPDs talked about the broken retrans system that needed mending ASAP.

The NAB also said the FCC should not scrap broadcast- content exclusivity rules, but that horse appeared to have left the barn already, with an order on the commissioners’ desks that would eliminate them, circulated and supported by FCC chairman Tom.