WASHINGTON—ACA Connects is worried about the transformation of broadcast TV from something local to something more corporate, which it says is evident in the rising retransmission consent fees, which saw a nearly 20% increase in 2019.
A recent meeting with a representative from FCC Commissioner Nathan Simington’s office with ACA Connect’s Ross Lieberman and outside counsel Michael Nilsson, detailed in an ex parte filing, discussed how growing consolidation is impacting the broadcast industry, i.e., local stations are now often dealing with corporate representatives, which could raise numerous policy issues.
One such issue is the rising retransmission consent fees. Citing a FCC report, ACA Connects points out that cable operators paid more than $5.5 billion dollars in retransmission fees in 2019, up 19.2% from the previous year. ACA Connects says that it has heard from broadcasters that the demand for high and increasing fee prices continued in 2020, which it claims is backed up by analyst reports.
With these increases, there is a disparity between small cable operators and large ones, ACA Connects notes. Per the FCC report, small cable operators paid $178.13 per subscriber, per year in retransmission fees. Large cable operators, meanwhile, paid on average $124.67 per subscriber, a 43% difference. “And according to the FCC, the disparity between small and large cable systems is only getting larger,” ACA Connects wrote.
In addition, these increased fees and disputes over them have led to an increased number of TV blackouts. Per ACA Connects, 2019 saw 219 instances of broadcasters blacking out their signal. In 2020, there were a reported 342 blackouts.
“In other words, on nearly 350 occasions last year, cable and satellite subscribers who had one nothing wrong lost access to local news and network programming, just so the largest broadcasters could serve their bottom line,” wrote ACA Connects.
However, ACA Connects did note two positive developments regarding retransmission fees. The first was the implementation of the Television Viewer Protection Act of 2019. This law requires large TV station ownership groups to negotiate retrans in good faith with buying groups like the National Cable Television Cooperative. ACA Connects members said that NCTC helped conclude retransmission deals with many large broadcast groups covered by TVPA.
Also, ACA Connects praised that the FCC is beginning to enforce good-faith negotiation rules, including a nearly $10 million fine against Sinclair Broadcast Group stations and $48 million in fines against Sinclair itself.
Other suggestions made during the meeting to address concerns of broadcast consolidation and retransmission consent included a national ownership cap, local ownership rules, “the totality of circumstances” test for good faith negotiations, ATSC 3.0 or the proceeding seeking to define MVPDs.
The complete ex parte filing is available through the FCC website.
