The American Television Alliance tells the FCC that Gray Television shouldn’t be allowed to buy KDLT because it already owns KSFY in the South Dakota market and duopoly ownership of two top-four affiliates would give Gray too much retrans negotiating power.
In a potentially precedent-setting proceeding, the American Television Alliance is challenging Gray Television’s request at the FCC for permission to own two top four-rated stations in Sioux Falls, S.D. (DMA 110), citing concerns that the combination would inflate retransmission consent fees and lead to higher cable and satellite prices for consumers.
The challenged was triggered by Gray’s seeking approval for its $32 million purchase of NBC affiliate KDLT in Sioux Falls, a market where it already owns ABC affiliate KSFY.
Such combinations between top-four stations like KDLT and KSFY are prohibited by the FCC ownership rules, but the FCC last fall said it would consider what amounts to waivers upon a showing that that the benefits of the combinations would outweigh the harms.
The case is among the first the test how far the FCC will go in granting top-four duopolies.
The ATA, a coalition of cable and satellite companies dedicated to limiting broadcasters’ ability to negotiate for retrans fees, argues in its filing that Gray failed to address what impact the deal would have on retrans fees that put upward pressure on consumer fees as required by the FCC.
“Accordingly,” ATA says, “the commission should require … [Gray] to show (1) that the transaction will not result in higher retransmission consent fees (because of specific characteristics of the market or because of conditions placed on the transaction); or (2) that the benefits of the transaction outweigh the harms to consumers caused by increased retransmission prices.”