ACA: Proof Local Broadcasters Collude On Retrans Fees?

The American Cable Association (ACA) says it has “new evidence” showing that competing broadcasters are teaming to lessen competition in local markets by  coordinating retransmission consent negotiations. As such, the group is asking the Federal Communications Commission (FCC) “to tighten its local TV station ownership limits to better achieve the FCC’s public interest goal of promoting competition in local media markets.”

“Upon review of ACA’s latest findings, the FCC will recognize what hundreds of smaller cable operators are observing in their local markets, which is that broadcasters are moving aggressively to consolidate at the local level. Instead of competing against each other, these broadcasters are colluding,” says ACA President and CEO Matthew M. Polka. “At a minimum, ACA is urging the FCC to conclude that coordinated negotiations among two separately owned, Big Four broadcasters in a market violate the intent of the agency’s duopoly rules and should be prohibited in the public interest under the multiple ownership rules.”

According to the ACA, “Of the 62 pairs of multiple Big 4 affiliates in the same Designated Market Area (DMA) that are known to operate under some sort of sharing agreement, its members confirmed that 46 of these pairs in 41 markets conducted retransmission consent negotiations using a single representative. When ACA last surveyed its members in 2010, it identified 36 pairs in 33 markets. Therefore, in the 24 months since ACA last reported to the FCC, the number of known instances of this form of broadcaster collusion at the local level has jumped by 28 percent.”

The ACA included these findings in comments filed March 5 in connection with the FCC’s quadrennial review of its media ownership rules mandated by Congress. As the group explained in its comments, “The coordination of retransmission consent under the template advanced by broadcasters serves to lessen competition in local broadcast markets evidenced by their ability to drive up the distribution cost of broadcast signals to a greater extent possible than if they were negotiating separately.”

In addition, the filing described practices that the FCC should deem attributable under its TV station ownership rules, including:

• Delegation of the responsibility to negotiate or approve retransmission consent agreements by one broadcaster to another separately owned broadcaster in the same DMA;
• Delegation of the responsibility to negotiate or approve retransmission consent agreements by two separately owned broadcasters in the same DMA to a common third party;
• Any informal or formal agreement pursuant to which one broadcaster would enter into a retransmission consent agreement with an MVPD contingent upon whether another separately owned broadcaster in the same market is able to negotiate a satisfactory retransmission consent agreement with the same MVPD; and
• Any discussions or exchanges of information between separately owned broadcasters in the same DMA or their representatives regarding the terms of existing retransmission consent agreements, or the status of negotiations over future retransmission consent agreements.
 
ACA also asked the commissiom to "refuse to grandfather existing agreements or practices between broadcasters, holding that all existing agreements should be terminated, and to communicate to broadcasters engaged in any practices that facilitate the coordination of retransmission consent not done pursuant to an agreement to cease and desist immediately."