Broadcasters Skirting Current Rules – FCC Should Step Up Enforcement, Tighten What’s on the Books

WASHINGTON D.C.  March 5, 2012   Consensus is emerging amongst American Television Alliance (ATVA) members on key steps the FCC should take to enhance and enforce existing media ownership regulations to prevent broadcasters from exploiting these rules to harm consumers.   ATVA is a diverse coalition of pay-TV providers of all sizes, consumer groups and independent programmers.   In comments that will be filed today in the docket, individual ATVA members share these general views:

The FCC should prohibit separately owned broadcast stations in the same market from coordinating their retransmission consent negotiations and tighten scrutiny of broadcaster sharing agreements

Sharing agreements and other informal arrangements are enabling broadcasters to coordinate their retransmission consent negotiations and reducing local news available to viewers.  By exploiting loopholes in current rules to transfer control of stations without FCC approval, broadcasters have created “virtual duopolies” in more than 50 markets.  Under many of these legally binding agreements and other arrangements, multiple stations can collude on retransmission consent negotiations. This unbridled market power has clearly impacted the skyrocketing increases in retransmission fees.   The sharing agreements often extend to consolidation of news operations.  As a result, viewers are seeing a dramatic decrease in original and diverse local news and public affairs programming.  

Growing network interference in retransmission consent negotiations undermines localism

Broadcast networks have increasingly interfered in retransmission consent negotiations of non-owned affiliates and as one network CEO put it, “Given the dynamic of the broadcast business and the relationship with affiliates, we feel it’s not only within our right but that we will get more cash from [affiliates’] retransmission consent deals.”   Last year, SNL Kagan estimated that total reverse retransmission revenue would double “from just nearly $500 million in 2012 to over $1 billion by 2014.”  This network grab of retrans revenue is reducing the resources meant to support local programming.  The FCC should review the growing practice, which may be a de facto transfer of control that requires government approval.

Ban stations from affiliating with multiple networks in a single market

As the FCC noted in its NPRM, more and more stations are affiliating with two or more Big Four networks.  The FCC found 68 instances of this practice and in at least 26 cases, more than one station in a market is carrying programming from multiple networks. 

This growing trend puts even more power in the hands of broadcasters when it comes to retransmission consent negotiations – they can and have threatened to black out more than one network in a single market.   The FCC should limit the ability of station owners to form dual affiliations with networks and subject the deals to review and approval.

The American Television Alliance (ATVA) brings together an unprecedented coalition of consumer groups, cable, satellite, telephone companies, and independent programmers to raise awareness about the risk viewers face as broadcasters increasingly threaten service disruptions that would deny viewers access to the programs they and their families enjoy.

 Visit our website:  American Television Alliance