In support of Mediacom in its dispute with Sinclair Broadcast Group, the cable group to investigate joint operation of TV stations in markets that give the stations more leverage in retrans negotiations with cable systems.
The American Cable Association today called on the FCC to open a proceeding to examine local marketing agreements (LMAs) used by broadcasters to, in its words, “attain even more bargaining power over small, independent cable operators in negotiations for signal carriage through retransmission consent.”
ACA said 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,” said ACA President-CEO Matthew M. Polka. “LMAs set the price for retransmission consent for one broadcaster and its direct horizontal competitor, leading to higher retransmission consent costs for consumers,” he added.
ACA’s request for an LMA proceeding came in FCC comments filed in support of Mediacom Communications Corp.’s retransmission consent complaint against Sinclair Broadcast Group. In the proceeding, Mediacom has asked the FCC to prevent the broadcaster from withholding its signal from cable operators.
“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, ACA said, “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.”