WOW! Sinclair Broadcasting Says Reverse Retrans to Networks Hurting Localism

In a filing with the FCC today against the Comcast-Time Warner Cable merger, Sinclair Broadcasting Group cited increases in “reverse retransmission consent”—Payments that broadcast networks (CBS, NBC, ABC or FOX) require local broadcast stations to pay them in exchange for national programming (like Big Brother, The Biggest Loser, Scandal and American Idol)–as a harm to localism. The filing states:

“The impact of these increases on a broadcaster is that it must either increase retransmission consent fees, or, if it fails to do so, then decrease budgets for news and original programming or otherwise reduce investment or costs. Reverse retransmission fees could continue to rise, to a level that would make it impractical for broadcasters to invest in and produce new programming, which could affect their future business prospects.”

This is a surprising stance for the country’s largest TV group, which owns over 160 stations across the nation. Many of Sinclair’s stations are part of duopolies and shared service agreements, both of which provide more leverage for retransmission fee negotiations and hurt localism.

Sinclair is finally coming clean and confirming what we already know: the retransmission consent system is spiraling out of control and harming consumers.

Retransmission consent was sold to Congress as a tool to cultivate localism and help local broadcast stations. Now local stations are being gobbled up by TV groups (like Sinclair) and money flows back to the national networks (CBS, NBC, ABC AND FOX) instead of local programs. As Sinclair notes in the filing, “reverse retransmission consent fees are projected to have increased 144%, and over the next 5 years (2014-2019) they are projected to increase by 149%.”  Only half of stations show local news, and most of it is syndicated content – about as local as Pizza Hut.

Also in a surprising change of heart, Sinclair’s filing states that the FCC should step in to “establish conditions that would require Comcast (and TWC) to provide retransmission consent agreements, at terns no less advantageous (to independent stations), than the terms Comcast/NBCU provides to its own O&Os.” This is quite the flip-flop from broadcasters’ usual stance that retransmission consent is, and should remain, part of a free market.

Sinclair’s claims today shows retransmission consent is a “national network issue.” By updating the rules, we can shift the focus back to localism. Through proposals like “local choice”, we could see community-based programming and news thrive. That would be a win for everyone.

Consumers deserve better than more broken promises from broadcasters.  Let’s fix this system and move TV into the 21st Century.

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