The cable association urges the FCC not to act on raising the 39% ownership cap before knowing how much such an action could increase cable rates. ACA wants the commission to consult with the new Office of Economics and Analytics and seek an econometric analysis
ACA To FCC: Hold Off On Relaxing 39% Cap
The American Cable Association said Monday the FCC should not permit greater TV station consolidation before conferring with its newly created Office of Economics and Analytics to examine the costs and benefits of such consolidation, including the extent to which such action would increase cable bills.
“ACA has repeatedly observed that broadcast consolidation increases a broadcaster’s leverage in retransmission consent negotiations, leading to higher rates paid by pay-TV subscribers and other harms to the public. Both economic theory and the best empirical evidence available to the FCC suggest that increasing the national cap beyond its current level will harm pay-TV subscribers,” ACA President-CEO Matthew M. Polka said.
ACA set forth its views in a filing Monday in connection with the FCC’s review of whether to allow a single entity to own enough TV stations sufficient to reach more than 39% of TV households nationally. By relaxing the rule, the FCC would allow TV stations to gain even more bargaining leverage than they already possess. This would allow them to impose more harmful signal blackouts on cable operators and demand excessive increases in retransmission consent fees, which inevitably find their way into consumers’ monthly bills.
ACA urged the FCC to consult with the new Office of Economics and Analytics and seek an econometric analysis based at least in part on Sinclair-Tribune merger analyses. It argued that such an analysis is necessary for the FCC to understand the benefits and harms of relaxing the cap.
Moreover, broadcasters seeking to relax the national cap possess the data necessary for such an analysis and the FCC should require them to produce it.
The data necessary to conduct such analyses (meaning retransmission consent agreements) are held by both broadcasters and MVPDs. Historically, broadcasters have gone to great lengths to keep this data secret. Yet the responsibility for providing this data to the Economics Office should fall upon broadcasters, in all fairness, subject to appropriate confidentiality protections.
“If broadcasters seek to change the FCC’s rules to their benefit, they should provide the data to support their request,” Polka said.