WASHINGTON -- The National Association of Broadcasters, along with the affiliate associations for ABC, CBS, FOX and NBC, filed joint comments today with the Federal Communications Commission urging the agency to deny a recent cable-backed petition seeking to give pay-TV providers increased leverage during retransmission consent negotiations. Retransmission consent, established as part of the 1992 Cable Act, is the market-based negotiation process in which a pay-TV provider and a local television station reach a carriage agreement for the TV station signal.
The reform sought by cable providers (also known as multichannel video programming distributors or MVPDs) is "an attempt to tilt the retransmission negotiating process in favor of MVPDs and against local television stations," the broadcast groups told the FCC today. "Without the ability to negotiate for fair retransmission consent compensation, local stations would have fewer financial resources with which to compete with MVPDs in the acquisition of quality programming, ultimately relegating the free, over-the-air television service to a non-competitive programming service."
CABLE RATES AREN'T IMPACTED
The local broadcast groups countered cable claims that retransmission consent fees result in higher cable rates, and pointed to recent comments made by the chief operating officer for Cablevision who noted that retransmission consent will not affect the company's overall cost structure.
"Retransmission consent fees paid to broadcast stations in 2008 constituted a mere 2.7% of MVPD programming costs and less than 1% (.71%) of the average $99 per month paid by subscribers to MVPDs for television service," today's filing explained. "It cannot be seriously maintained that retransmission consent fees have led to higher cable rates."
BROADCASTERS DEAL IN GOOD FAITH, IMPASSES ARE RARE
The broadcasters' comments noted that the Commission has never found that a broadcast station has failed to negotiate in good faith or has otherwise abused the agency's retransmission consent rules -- neither of which, unfortunately, can be said for MVPDs. Impasses are exceedingly rare, today's filing explained, affecting "only one-one hundredth of one percent (0.01%) of annual television viewing hours."
"Consumers are far more likely to lose television service as a result of an electricity or cable system outage than from an impasse in retransmission consent negotiations."
ARBITRATION COSTS WOULD 'BLEED' SMALL STATIONS
Arbitration would "result in a battle between dueling economists and lawyers that will, frankly, bleed the economic resources that small local stations could ill afford--and resources that all local stations could better use to invest in high-quality programming and public service stewardship," today's filing explained.
Noting comments by Time Warner Cable CEO Glenn Britt, today's broadcast filing pointed out that the company itself has expressly rejected the concept of arbitration in other cable programming disputes, stating that it would force higher retail rates on cable customers.
The broadcast groups also explained that the mere pendency of this proceeding has created an incentive for MVPDs to "game" the negotiating process in the hope that the Commission will enact the cable-backed "reforms."
"The sooner the Commission denies the Petition, the sooner Petitioners will get back to the negotiating table with local stations and conclude all pending retransmission consent negotiations."
The entire joint filing can be viewed and downloaded in PDF format here.
About NAB
The National Association of Broadcasters is the premier advocacy association for America's broadcasters. NAB advances radio and television interests in legislative, regulatory and public affairs. Through advocacy, education and innovation, NAB enables broadcasters to best serve their communities, strengthen their businesses and seize new opportunities in the digital age. Learn more at www.nab.org.