NAB Girds for Retrans and Ownership Battles

Broadcast lobby has a full plate with the escalation of retransmission and media ownership contention.
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WASHINGTON: The National Association of Broadcasters has a full plate with the escalation of retransmission and media ownership contention. The NAB this week filed a petition with the Third Circuit Court of Appeals blasting FCC ownership rules. It also filed comments with the FCC urging it to reject a cable TV drive to regulate retransmission consent.

“Congress’s decision to enact the retransmission consent requirement for MVPDs is grounded in fundamental notions of equity and fair competition,” the NAB said in its retrans filing with the FCC. “With the realization that by 1992, cable systems were no longer merely retransmitting local television stations’ signals, but were competing head-to-head with those stations for programming, advertising dollars, and viewers, Congress concluded that--just as no broadcast station could retransmit or resell the signal of another broadcast station without its consent--a cable system should no longer be permitted to do so.”

The NAB was joined by CBS, Fox, NBC and ABC on the filing. CBS and Fox rejoined the NAB last week after having split the sheet several years ago. All four networks left at one time or another. ABC came back in 2005, and NBC returned in 2007.

FCC staff members who attended Cable Show 2010 last week in Los Angeles indicated the commission’s reluctance to step into a retrans battle, according to the Los Angeles Times. Retransmission is the broadcast alternative to electing must-carry, which requires a cable operator to provide all local broadcast signals on its systems. The U.S. Supreme Court on Monday reaffirmed must-carry, denying a challenge by Cablevision.

Broadcasters who elect must-carry typically are not in a position to negotiate conditions. Those who are, elect retransmission consent. Such conditions used to be limited to expanded carriage and fee structures for sister cable networks. Then, as cable and satellite providers started charging extra for high-definition programming--including broadcast signals--broadcasters went after a piece of that in the form of monthly retransmission fees. The negotiations over retransmission fees have grown increasingly more intense over the last decade, sometimes to the point of stations briefly being pulled from cable systems.

Cable operators repeatedly blast broadcasters for what they say are “discriminatory” fees that they must pass on to consumers.

“FCC intervention is essential to shield consumers from a broadcast industry bent on abusing its market power to gouge consumers served by small cable operators in hometown America,” said Matt Polka, president and CEO of the American Cable Association, the lobby representing smaller cable operators. “If the FCC’s effort yields the kind of level playing field we hope to see, it will take pressure off retail cable rates while freeing up capital vitally needed to accelerate broadband deployment in rural communities in every state.”

The NAB in turn says the characterization by multichannel video providers is disingenuous.

“The data simply do not support the claim that increases in MVPD rates are caused by rising programming costs in general, or rising retransmission fees in particular,” the NAB said of a study it submitted to the FCC May 6. “To the contrary, programming costs are rising slower than MVPD revenues, slower than other components of MVPD costs, and slower than MVPD profits, while retransmissions fees make up a small fraction of programming costs, and an even smaller percentage of MVPD revenues.”

The chest-beating is bringing broadcasters together. Around 90 TV and radio stations have joined the NAB in recent weeks, in addition to the two major networks. The latest addition is Max Media of Virginia Beach, Va., which owns and/or operates 44 TV and radio stations in Puerto Rico and the United States.

Other radio and television station groups to recently join NAB include Communications Corp. of America of Lafayette, La.; Boswell Broadcasting of Kosciusko, Miss.; Brothers Broadcasting of Rensselaer, Ind.; Eagle’s Nest Inc. of Roanoke, Ala.; KSBJ Educational of Humble, Texas; Living Faith Broadcasting of Abingdon, Va.; Neuhoff Communications of Jupiter, Fla.; and White Knight Broadcasting of Lafayette, La. --Deborah D. McAdams