PITTSBURGH, November 19, 2009 - The American Cable Association today called on the Federal Communications Commission to open a proceeding to examine local marketing agreements (LMAs) used by broadcasters to attain even more bargaining power over small, independent cable operators in negotiations for signal carriage through retransmission consent.
LMAs enable one broadcaster to negotiate retransmission consent on behalf of two or more broadcasters within the same local market, despite FCC duopoly rules that generally prohibit common ownership of two TV stations in the same local market to protect consumers and advertisers from anti-competitive conduct by broadcasters.
"ACA believes the FCC should determine whether LMAs are skirting national policy intended to promote local broadcast competition," ACA President and CEO Matthew M. Polka said. "LMAs set the price for retransmission consent for one broadcaster and its direct horizontal competitor, leading to higher retransmission consent costs for consumers."
ACA's request for an LMA proceeding came in FCC comments (attached) filed in support of Mediacom Communications Corp.'s retransmission consent complaint against Sinclair Broadcast Group, Inc. In the proceeding, Mediacom has asked the FCC to prevent the broadcaster from withholding its signal from cable operators, an unfair, heavy-handed tactic that victimizes consumers and should be outlawed.
"We hope the FCC takes this opportunity to fix a broken retransmission consent process that permits a broadcaster like Sinclair to pull its signals from cable systems while a retransmission consent complaint is being reviewed by the FCC, inflicting harm on consumers who expect uninterrupted access to local news, weather and time-sensitive information such as school closings, traffic delays and missing-child alerts," Polka said.
In its comments, ACA urged the FCC to permit cable operators to carry local broadcast signals while retransmission consent complaints are pending before the agency.
Preservation of the status quo in such circumstances is necessary, ACA asserted, because ACA members (half of whom serve 1,000 subscribers or fewer) would suffer unacceptable subscriber loss to satellite TV providers that continued to provide all broadcast programming in the local market while the FCC was adjudicating a retransmission consent dispute. Under the current regime, small cable operators who have been wronged have no viable option other than to accept broadcasters' proposed terms and conditions, however unreasonable, because waiting out the complaint process while not carrying a broadcast affiliate is always the greater of the two evils.
"ACA has long advocated for retransmission consent reform because of the vulnerability of ACA members and their customers in retransmission consent negotiations due to a lack of market power," Polka said. "As the FCC noted when News Corp. took effective control of DirecTV, small and medium-sized cable operators are particularly vulnerable to the withdrawal of `must have' programming."
# # #
About the American Cable Association
Based in Pittsburgh, the American Cable Association is a trade organization representing more than 900 smaller and medium-sized, independent cable companies who provide broadband services for more than 7 million cable subscribers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA's members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit http://www.americancable.org/
Please use the information below to get in touch with the American Cable Association.