The NAB urges the FCC to examine whether consumers and advertisers are harmed by the joint advertising sales of pay TV providers.
NAB to FCC: Review Pay TV Ad Practices
Calling the advertising practices of pay TV “collusive,” the NAB Wednesday urged the FCC to explore whether joint advertising sales of pay TV providers hurt consumers and advertisers.
“We believe that collusion in the pay-TV advertising business deserves better oversight from the FCC,” says NAB President & CEO Gardon Smith. “This deeply troubling practice would appear to allow the largest pay-TV companies in the country to game the advertising sales market and set above-market ad rates for local and national businesses.”
The NAB’s comments were included in a filing submitted to the FCC, which, according to the NAB, includes documents showing collusive television advertising selling arrangements by pay TV’s largest players. The “interconnect” advertising activities by cable, satellite and telephone companies allow companies like Time Warner Cable, DirecTV, DISH, Verizon and AT&T to jointly commission one person to sell TV advertising across multiple pay-TV platforms, the NAB says.
The NCTA, however, calls the NAB’s actions “a misguided attack.”
“NAB’s latest attack is an unfortunate and desperate attempt to divert attention from examination of discrete broadcast ownership issues,” says NCTA President & CEO Michael Powell. “This collateral attack on pay TV providers should be seen for what it is – a transparent stunt to muddy the waters and confuse the issue.”
The NAB’s request for the review comes as the FCC is reviewing joint sales agreements”of free and local TV stations.
“Heavily regulated local broadcasters in smaller markets are being scrutinized by the FCC for a practice that involves one local TV station selling ads for another local TV station,” Smith says. “Yet the heavily consolidated pay-TV industry, unshackled by any ownership rules, is free to engage in this most collusive of advertising sales practice on a massive scale in multiple markets.”
Using a company called NCC Media (formerly known as National Cable Communications), multiple pay-TV providers in a given market hire a single sales employee to sell local and national advertising that later appears on the local cable system, on satellite TV companies DirecTV and DISH, and on telephone video providers such as Verizon FIOS and AT&T U-Verse, according to the NAB.
NCC’s brochure “The Essential Guide” to interconnects describes how the top pay-TV providers jointly sell advertising. “Interconnects make it easy to plan and buy cable in local markets. With only one buy, one commercial and one invoice, an advertiser can reach an entire market full of cable homes with one call. …NCC is your single-source connection to all interconnects, and all cable homes, throughout the U.S.,” it says. “Leading cable operators have significantly expanded local market ad penetration, by incorporating DirecTV, Verizon FIOS, and AT&T U-Verse subscriber homes into their offerings.”