The current round of station consolidation has produced six more Big Four affiliate duopolies and one Big Four triopoly (Syracuse, N.Y.) that give broadcasters undue leverage in retrans negotiations with cable operators and ultimately drive up cable subscriber fees, says the American Cable Association.
ACA Raises New Alarms About Duopolies
The American Cable Association yesterday renewed its call for the FCC to bar broadcasters from operating two Big Four network affiliates in a market, warning that such virtual duopolies are proliferating.
ACA, which represent small cable operation, has been arguing that the arrangements — shared services agreements and joint sales agreements — give broadcasters undue leverage in retransmission consent negotiations with cable operators and other multichannel video program distributors (MVPDs) and drive up cable subscriber fees.
“ACA member companies have attested to the fact that when two non-commonly owned Big Four stations in a single market coordinate their retransmission consent negotiations,” the ACA says in its most recent filing, “what little bargaining power MVPDs have to secure retransmission consent at fair market value is materially reduced.”
In its current review of its media ownership rules, the FCC is considering banning SSAs and JSAs that broadcasters use to circumvent the local ownership rule banning outright ownership of more than one station in small markets and more than one Big Four affiliate in markets of any size.
The ACA previously counted 48 Big Four virtual duopolies in 43 markets.
And, according to the new filing, the recent round of station consolidation led by Nexstar Broadcasting and Sinclair Broadcast Group has yielded six new Big Four duopolies and one Big Four triopoly:
BRAND CONNECTIONS
- Nexstar — KMISS (Fox) and KTAL (NBC) in Shreveport, La.
- Nexstar — KPEJ (Fox) and KMID (ABC) in Midland-Odessa, Texas
- Nexstar — WFFF (Fox) and WVNY (ABC) in Burlington, Vt.-Plattsburgh, N.Y.
- Nexstar — KARK (NBC) and KLRT (Fox) in Little Rock-Pine Bluff, Ark.
- Nexstar — KSEE (NBC) and KGPE (CBS) in Fresno, Calif.
- Sinclair — WEYI (NBC) and WSMH (Fox) in Flint-Saginaw-Bay City, Mich.
- Sinclair — WSTM (CBS), WTVH (CBS) and WSYT (Fox) in Syracuse, N.Y.
“A diverse group of parties, including small and large cable operators, direct broadcast satellite providers, unions and public interest groups, have previously raised concerns about the competitive harms that occur when separately owned, same market broadcast television licensees enter into arrangements whereby they coordinate their activities, particularly related to retransmission consent negotiations and combining their news operations,” the filing says.
Comments (17)
Maria Black says:
June 4, 2013 at 9:10 am
Weird, stations want to be paid for their content, much like cable companies want to charge consumers for ESPN. Turnabout is fair play, Cable. Capitalism is at work, you’ll just have to suck it up and deal.
solange attwood says:
June 4, 2013 at 1:06 pm
Then why did we need retrans rules back in 1992? Broadcasters who felt they were disadvantaged by then existing regs should have just sucked it up and dealt with it, right? I was there, SalesGrrll, but I bet you weren’t.. If you’d open up your mind a bit wider you might someday become a SalesWmyn.
Manuel Morales says:
June 4, 2013 at 4:29 pm
The retrans rules came about to prevent unauthorized conversion of stations intellectual property. Cable Co’s were stealing it. Now they can’t. Pretty simple.
Mark Annas says:
June 4, 2013 at 10:01 am
SalesGirl – big problem is that the cable companies pass the cost onto their customers, who are dropping their cable as a “luxury” they can live without…..so “sucking it up” really is “it sucks for the viewer”.
Clayton Mowry says:
June 4, 2013 at 10:41 am
Cable has no issue force feeding consumers dozens of cable channels that the majority of homes WOULD NOT opt for otherwise. If you took 2/3 of the channel list away and left the broadcast nets few would complain. After years of inflating the monthly bill with price escalating bundles before retrans payments were a reality. Now the ACA is the white night consumer protection group?. What hypocrisy
Manuel Morales says:
June 4, 2013 at 10:59 am
Simple option for cable companies- refuse the demands of Broadcasters and operate a cable system without broadcast channels. Let the consumers take down broadcast signals with an old hanger. Free market.
Ellen Samrock says:
June 4, 2013 at 4:37 pm
Right. The main draw for viewers are the big four networks. Take those off of cable and satellite and they dry up like minnows in the hot sun. They know it, the networks know it.
Clayton Mowry says:
June 4, 2013 at 11:05 am
Great point. Guys like Matthew Polka and ACA can keep grousing about “fair market values”, but none are brave enough to market their service without the broadcast nets. If you told people they would have to get their Big 4 off of the air, many consumers could not justify the cable bill for what is left. In that scenario paying a dollar for one of the program streams that keep their subscribers seems like a bargain.
Sandy Hinkle says:
June 4, 2013 at 11:39 am
I have read the comments of commonsenseTV and Sammy. First, cable companies aren’t force-feeding customers dozens of channels. The companies that own your big broadcasting networks (ABC, CBS, FOX, NBC) are the ones doing the force-feeding. Second, it’s so ironic to hear broadcasters say that cable companies should cut the broadcast cord and let consumers get broadcast TV “free over-the-air.” Are you really advocating for the loss of ALL that retrans revenue you are raking in now? And do you really want consumers to get TV “free over-the-air?” It seems like you all in the broadcast industry want nothing to do with free over-the-air carriage, except give it lip service, while collecting all of your retrans dough. Third, it is so further ironic to hear broadcasters promote free over-the-air television, when your networks and your trade association representatives are doing all they can to stop new technologies that would provide TV to consumers free over-the-air. Let’s face it, broadcasters don’t care about free over-the-air television. All you care about is retrans money. Just admit it. Your networks admitted this when they said if AEREO wins they will take their networks and make them cable channels so that they could continue to receive the same revenue they are receiving today through retrans. Fact of the matter is it won’t matter anyway, because consumers are already on the move to get their broadcast and video content elsewhere online. So, your retrans gravy train is doomed anyway. Matt-ACA
solange attwood says:
June 4, 2013 at 1:09 pm
Amen Brother!
Manuel Morales says:
June 4, 2013 at 2:55 pm
Ahh, Matt Polka shows up. The man who googles his own name all day. When will his little trade group show him the door? He’s been hoodwinking his members for years. His policies and actions are more self serving than group serving. I’m still shocked he’s around to take a pay check. He reminds me of the guy with a “kick me” sign on his back. The butt of all the cable attorneys jokes- yet he has no clue.
Ellen Samrock says:
June 4, 2013 at 4:10 pm
I have never heard full power stations or networks advocate cutting the cord or inform viewers as to how they can get free over-the-air TV (except when there is a retrans dispute such as occurred in NYC a couple of years ago). This is one reason why there is so much ignorance on the part of consumers about FOTA TV.
alicia farmer says:
June 4, 2013 at 1:58 pm
Pigs get slaughtered. Consumers have had enough of this crap.
kendra campbell says:
June 4, 2013 at 2:24 pm
TV is an increasingly broken system. Mediocre programming. Commercial glut. Way too expensive. No a la carte choices. Four families on my street have cut the cord in the past five months.
Sandy Hinkle says:
June 4, 2013 at 3:51 pm
Thanks, Sammy, for your comments. I always try to keep my comments focused on the issues and not personal attacks, but that’s ok. I can take it. You know who and where I am. As to the issues themselves, I have never received a credible response from the broadcast industry about the questions I raised. Do you really endorse cord-cutting and all that would mean to you? Do you understand that if a consumer cuts the cord and gets broadcast TV “free, over-the-air” that you get nothing in return? No retrans? And even if a consumer cuts the cord from cable to watch more programming online, do you understand who is going to provide them with the broadband they desperately want? It’s not the broadcast industry! I’m happy to engage in the debate because I, our Board and our Members feel strongly about the retrans and programming issues, and we think outdated rules and regulations should be updated. But what we’ve NEVER said is that we want to eliminate the current retrans rules or that we don’t want to pay anything for retrans. Actually, given how much broadcast affiliates and networks have said they rely on retrans revenue, you would think that broadcasters would treat cable operators a little bit better and more like partners together. But that has never happened, at least for our members, except in the very earliest days of retrans when local broadcast general managers worked things out with local cable system managers. I’ve been in the cable industry since 1986, no doubt — clueless me — with many people laughing at me and looking to fool me with the “kick me” signs. Oh well, par for the course, and part of the territory, I guess. But in that time I don’t think I have EVER heard one broadcaster say thank you to the cable industry for carrying local stations FAR beyond where you could ever reach over the air on your own. I wonder how much that has meant to you in increased advertising reach and dollars over the year. So, you can criticize me if you want. No sweat. But at the end of the day, we will keep fighting, and even long after my “hoodwinking” days are over and I am shown the door. Probably the nicest thing a broadcaster once said to us is, “You ACA guys may be small, but you’re very annoying!” If so, guilty as charged. But it will always be about the issues. It’s not personal. Have a good day, and I look forward to debating you again soon. PS — I don’t google my name all that much, but if you do, there’s a great page for Matt’s Polka Party. Looks like a lot of fun! MMP
Manuel Morales says:
June 4, 2013 at 4:10 pm
See Matt, you energy is focused in the wrong place. Instead of arguing over pennies you should be fighting for dollars. You spend too much time and too much money (of your members) trying to make the retrans regime even more artificial. You do so by filing brief and brief with an entity that has clearly stated that they don’t have the authority to reform it (which means they have bigger fish to fry). That’s a waste of time and money but most importantly a breach of your duty to your members. Turn your focus towards ala carte programming. All I want to see if a Cable Guy tell broadcasters to pound sand. All cable, no broadcast. Those pesky retrans fees will be gone overnight. Why don’t you tell your members to do that?
Sandy Hinkle says:
June 4, 2013 at 5:17 pm
Sammy, trust me, even though I said we’re not arguing that retrans should be free, that doesn’t mean our members like it. And they are the ones, rightfully so, who are telling us to get the laws and the regulations updated. Current retrans and related regs go back to 1992 and even back into the 1960s. So, the fight for modernization of current broadcast carriage laws and regulations will continue. Regarding your point about a la carte programming and more programming choice for consumers, I actually agree with you, and I think this fight is brewing. Sen. McCain took a lot of flak for his bill, but he’s speaking for consumers as you can see from comments in this very string above. We’ve fought for more choice as well going back to 2008, asking the FCC to address wholesale cable programming and allow cable operators to sell programming on tiers their customers want or a la carte. The broadcast networks that own the programming busted a gut to maintain their freedom to force the sale of their bundled programming as part of a take-it-or-leave deal. But I don’t believe their grip will hold forever, because consumer won’t stand for it. All cable-telco-DBS video providers are in competition with each other and no one wants to be without programming a competitor has. And that’s one reason why the bundle keeps getting bigger — the broadcast networks know how to leverage and keep expanding it. It won’t be long, however, when the price of such programming causes video providers to say enough is enough, and we might soon see that day you are predicting when cable operators tell broadcasters and networks to pound sand. Can’t some soon enough!