NAB To FCC: ACA Wrong On Retrans

The NAB struck back at cable operators that have been pressing the FCC to lessen broadcasters’ leverage in retransmission consent negotiations.

In comments filed with the FCC yesterday, the broadcast trade group challenged the operators’ contention that broadcasters representing multiple stations through ownership or contractual arrangements had undue leverage.

A study commissioned by the American Cable Association supporting the contention is badly flawed, it argued. “ACA should stop distorting the record,” it said. And even if it were true that representing multiple stations aided broadcasters, NAB added, it doesn’t follow that resulting increased retrans fees are responsible for rising cable bills.

“In light of cable’s long record of increasing subscriber fees well beyond the rate of inflation — which pre-dates by many years the emergence of cash compensation for operators’ retransmission of broadcast signals — operators are more accurately characterized as pocketbook protectors, not  consumer protectors.”

The NAB cited SNL Kagan research that found that retrans fees amount to only 2.7% of the operators’ video revenue.

Government intervention to reduce retrans fees would serve to only fatten cable profits, the NAB said. Without cable rate regulation, “there is no assurance that any savings would be passed on to consumers.”

Congress’s reasons for granting broadcasters retrans rights are as valid today as they were in 1992, the NAB said.

“Local broadcast signals remain the most watched signals on cable systems. Cable operators continue to charge their subscribers to receive these signals, profiting handsomely from the value broadcasters create. It would still be unfair and anticompetitive to allow cable operators to do this without the permission of local stations.”