In his call for a GAO study, the Senate Commerce Committee Chairman says joint sales and shared services agreements that allow a broadcast group to operate multiple stations in markets where the FCC rules say it may own just one might "artificially serve to inflate retransmission consent rates ... and drive up subscription fees for pay television consumers."
Rockefeller Calls For Probe of JSAs, SSAs
Senate Commerce Committee Chairman Jay Rockefeller (D-W.Va.) has called on the General Accounting Office to study the impact that joint sales and shared services agreements may be having on the “broadcast landscape” and on consumers.
“There appears to be increased use of SSAs by televisions stations …,” the senator writes in a May 13 letter to GAO Comptroller General Gene Dodaro.
“Some stakeholders have voiced concerns that SSAs have become a tool that broadcast ownership groups use to skirt the FCC’s existing ownership rules to the detriment of consumers. These groups suggests that SSAs, along with other formal and informal business arrangements between stations in a market … give one station effective control over the operations and business activities of another station in the same market without assuming formal ownership or control of the stations license.
“If fact, some groups contend that … [the] arrangements serve to artificially inflate retransmission consent rates in a local market, and as a result, drive up subscription fees for pay television consumers.”
On the other hand, the letter says, others believe SSAs are beneficial to broadcasting and consumers. “They argue that leveraging operational efficiencies can allow stations to devote more resources to newsgathering or local TV program production.”
The American Cable Association, one of the groups that has been complaining that the SSAs drive up retrans rates, praised Rockefeller for ordering the study.
BRAND CONNECTIONS
“ACA looks forward to providing the GAO with evidence we have been collecting for several years showing that Big Four TV stations that are separately owned are coordinating their retransmission consent negotiations in at least 20% of local TV markets,” said ACA President Matthew Polka in a prepared statement. “ACA has documented 48 instances in 43 different markets where Big Four [affiliates] have opted to collude on retransmission consent in an effort to deny consumers competitively determined rates.
“We are optimistic that in response to Sen. Rockefeller’s request, the GAO will validate ACA’s claims that broadcast stations are engaging in widespread anti-competitive coordination designed to extract excessive retransmission consent compensation from pay-TV providers as compared to broadcasters that negotiate individually.”
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