ATVA Opposes Apollo Station Purchases

American Television Alliance has filed comments at the FCC opposing Apollo Global Management’s proposed station purchases — first of Northwest Broadcasting, and second of Cox Broadcasting.

ATVA is objecting to proposed buys that include a top-four quadropoly and two top-four duopolies. The group says the deals would “impede competition and diversity and raise prices for consumers.” And, it adds, the FCC should require the applicants to file a full public-interest statement addressing all the harms and benefits of the proposed transaction. “The public should then be given an opportunity to comment on the applicants’ public-interest filing. The FCC then will have a full opportunity to weigh the public-interest harms against the benefits of one broadcaster owning all four of the top-four stations in market.”

Northwest is a relatively small station group that maintains a top-four quadropoly in Mississippi and top-four duopolies in Eureka, Calif., and Yuma, Ariz. ATVA says that “as a result of this monopoly over network programming in Mississippi and its two other top-fop four duopolies, Northwest now charges among the highest retransmission consent rates in the country, despite being a relatively small broadcaster that would otherwise be unable to command such high rates. Northwest also insists on including particularly aggressive “after-acquired station clauses” in its contracts with MVPDs.”

Apollo Global Management is a New York-based private equity firm. ATVA claims “the proposed transaction is designed to extend Northwest’s high retransmission consent rates to other broadcast stations — Cox in this proceeding. If the Federal Communications Commission approves this proposed transaction, Apollo will purchase Northwest and then purchase Cox. Because of after-acquired-station clauses in Northwest’s contracts, this will cause Cox’s rates to “reset” to Northwest’s higher rates for MVPDs carrying both sets of stations. These price increases appear to be the main purpose of the transaction and why Apollo asked the FCC to approve its Northwest acquisition before its Cox acquisition.”

ATVA argues that allowing Northwest to transfer its duopolies and quadropoly to others — and to use them as vehicles to raise consumer prices — would harm the public. ATVA says “the Application fails to address these issues entirely. It does not even acknowledge Northwest’s top-four quadropoly in Greenville, Miss., or its top-four duopoly in Eureka, Calif. Nor does it explain why it would be in the public interest to transfer control of its quadropoly and this duopoly when doing so would ratify a broadcast monopoly in Mississippi and duopolies in several other markets.

“The commission,” ATVA adds, “should require the applicants to file a full public-interest statement addressing all the harms and benefits of the proposed transaction. The public should then be given an opportunity to comment on the Applicants’ public-interest filing. The commission then will have a full opportunity to weigh the public-interest harms against the benefits of one broadcaster owning all four of the top-four stations in market.”

The group concluded: “As ATVA has explained many times before, top-four duopolies, triopolies, and quadropolies raise prices for consumers.The reason is straightforward. If a broadcaster can threaten to black out the programming of two or more of the four top-rated networks at the same time, it has more ability to generate the anger of consumers, who have the ability to drop their MVPD provider in favor of a competitor who still has this top programming available. Rather than risk losing customers, MVPDs will often accept higher prices and less favorable terms. The result: the duopoly, triopoly, or quadropoly broadcaster can command higher prices than those without such combinations — and broadcasters with multiple such combinations can command the highest prices of all. And ultimately, the customers of MVPDs end up paying “monopoly rents” for their favorite programming.”